In 1997, though, such arguments were pretty close to unheard of. Which is what makes Doug Henwood’s book Wall Street, published that year, such an amazing document. Along with explaining in clear if caustic terms how financial markets work, the book prefigures almost every criticism of the financial system that’s been levied since the crisis of 2008. An overleveraged housing market?Check. A link between financial sector growth and income inequality? Check. A natural tendency toward instability in financial markets? Check.

I don’t want to paint Henwood, who edits a newsletter called the Left Business Observer, hosts aweekly radio show, and knows more about economic indicators than anyone has a right to, as some kind of Nostradamus. In Wall Street he doesn’t so much make predictions as expose, in his crotchety, almost absurdly erudite way, the inconsistencies and contradictions in conventional views of how the financial world is supposed to work. (more…)