We replicate Rogoff (2010a and2010b) and find that coding errors, selective exclusion of available data, and unconventional weighting of summary statistics lead to serious errors that inaccurately represent the relationship between public debt and GDP growth among 20 advanced economies in the post-war period. Our finding is that when properly calculated, the average real GDP growth rate for countries carrying a public-debt-to-GDP ratio of over 90 percent is actually 2.2 percent, not −0.1 percent as published in Reinhart and Rogoff. That is, contrary to RR, average GDP growth at public debt/GDP ratios over 90 percent is not dramatically different than when debt/GDP ratios are lower.We also show how the relationship between public debt and GDP growth varies significantly by time period and country. Overall, the evidence we review contradicts Reinhart and Rogoff's claim to have identified an important stylized fact, that public debt loads greater than 90 percent of GDP consistently reduce GDP growth.

Chapter 8 uses original research and media accounts to examine how the neoliberal project diffuses into public and private institutions through networks of education, employment, and influence. Power structure theory is used to trace networks, identify central nodes of power, and shed light on the branches and conduits. Departures from private activity for government service and vice versa suggest self interest and class interest contributing to private uses of public interests. In other cases the revolving door represents captured minds rather than wallets. An updated analysis of Portugal which tracked the revolving door for every single member of government in Portugal's contemporary Second Republic is presented. A study of public decision makers in twelve countries between 1975 and 2015 examines how career trajectories have accommodated deregulation, liberalization, and the transformation of center-left parties into leading advocates of neoliberal policy.

Chapter 9 traces a history of bubbles and financial scandals from the Dutch tulip mania of the seventeenth century to frauds associated with European colonization of the Americas to financial misdeeds of the twentieth and twenty-first centuries. Dirty finance is everywhere. Sometimes it is the source of the funds: the world’s most reputable banks have handled funds from highly disreputable sources. In other cases, clean wealth goes through dirty handling. Offshore finance shelters the great family fortunes, at the edge of legality. High frequency trading blurs the line between quick wits and market manipulation. Cartels of traders enrich themselves at the expense of clients. The rating agencies rate complex securities as sound with minimal investigation. In the Libor scandal, the biggest banks conspired to mislead the world about inter-bank lending. A description of the instruments, transactions, and the mechanisms of manipulation and fraud is provided.

Chapter 12 provides a look at China, which has not been included in our analysis of largely developed economies. Chinese growth has been extraordinary with stunning effects, largely improvements, although pollution has worsened for a substantial share of the world's lower-income population. The Chinese model may well be unique, a complicated mix of socialist structures, state ownership of some large enterprises and much of finance, dirigiste state-led and state-financed development of the private sector, and some outright privatization at both the small and grand scale. But China faces the challenge of financialization that has some commonalities with financialization in the rest of the world yet with some uniquely Chinese features. There have been some precursors of financial trouble and ambiguity about the state as the final guarantor of private debt. Some of the key players and episodes as Chinese capitalism enters its financialized stage are profiled.

This chapter begins with a micro-history of the Great Crash of 2007–8. It describes the instruments, transactions, size, and growth of the shadow banking system in the years before the crash. Heralded with widespread affirmation by public decision makers and intellectuals, the new financial architecture received only occasional criticism from within. The chapter describes the construction of the financial system—both the history of its development and how the networks and connections looked on the eve of the crisis. Despite the dangerous warning signs offered by a series of regional crises on the periphery, advocates plowed ahead with certainty that the market could not be wrong. When the crash came, many experts broke briefly with orthodoxy, but most have returned rapidly to their faith in financial markets. A more technical appendix, “The Realm of Shadow Finance: How and How Much” details the shadow banking system.