By Ian Kumekawa

A year ago, well into the economic downturn, Senator Richard Durbin (D-IL) noted that the financial sector remained the most powerful lobby in Washington. “Frankly,” Durbin said, “they own the place.”

This sentiment, though perhaps a bit wrought in its articulation, remains viscerally unsettling. It cuts Americans to the very quick. It comes as no surprise, then, that 13 Bankers by Simon Johnson, an MIT professor, and James Kwak, a former McKinsey consultant, is a particularly difficult book to read.

In page after page, the authors matter-of-factly recite the various abuses, stupidities, and manipulations committed by high finance over the past three decades. Much of the book is a chronicle of the banking industry’s transformation from a “boring” yet safely regulated facilitator of national growth to an “exciting” field characterized by confidence (read: arrogance), in which “the rebranding of technology as innovation provided a blanket justification to any new financial products.”

The really stinging indictments are reserved for the government and for economic regulators in particular. The book rakes people like Alan Greenspan, Larry Summers, Tim Geithner, and Ben Bernanke over the coals – (rightfully) holding them responsible for the orgy of deregulation they oversaw.  Johnson and Kwak forcefully reject the Efficient Market Hypothesis – the laissez-faire theory used by regulators in the Clinton and Bush years that fundamentally justified the massive deregulation of the financial industry.  Based on the carnage left in the wake of the recession, they argue, there no longer exists a plausible argument for non-regulated banking.

But in reference to the government, 13 Bankers does more than just point out that the government stood by and let the banking industry inflate itself to bursting point; it details to what degree the financial industry controls Washington. The book’s title makes it sound rather conspiratorial, and though it does not suggest that there is a cabal of bankers that secretly is governing America, it does assert – quite strongly, in fact – that Wall Street has too much sway in the corridors of power. Senator Durbin’s statement, then, is not far off.

It is profoundly troubling that the securities lobby is the top donor for many elected officials (including liberal Democrats such as Representative Barney Frank), and equally concerning how many bankers –  including former Treasury Secretary Henry Paulson – go on to hold positions of power in Washington.

Yet the real source of power for Wall Street is derived from cultural perception – a good that was not purchased with cash outright. Up until the recent crisis, economic theory as articulated by a significant number of serious economists at serious academic institutions (think Larry Summers at Harvard), held that it was preferable to deregulate. This type of support, combined with boom times, allowed the banking industry to grow in scope and in confidence, a confidence that was shared by America.

In their effort to give agency specifically to Wall Street giants, Johnson and Kwak underplay the profound role that academic economics played in legitimizing downright stupid decisions.

Still, 13 Bankers is the kind of book that should incite readers to action. It’s the sort of book that should get readers to, in the words of Network’s Howard Beale “go to the window, open it, stick [their] heads out and yell: ‘I’m as mad as Hell, and I’m not going to take this anymore.’” For, according to 13 Bankers, Americans, just like Beale, are being stifled by a strict, hierarchical corporate culture.

Ultimately, Johnson and Kwak see Wall Street as a terribly powerful oligopoly consisting of overly large entities. For them, “the right solution is obvious: do not allow financial institutions to be too big to fail; break up the ones that are.” This would, it is true, better approximate the Jeffersonian small-firm values that the authors seem to embrace.

Yet theirs is an extreme course of action – one that will almost certainly n be put into practice. The federal government has embraced other means of constraining the banks, means that show some promise. Last week, the Securities and Exchange Commission filed suit against Goldman Sachs – a move that has garnered a great deal of excitement among those who seek national financial reform. Additionally, a financial bill is in the works that would severely regulate derivative trading. And though this is a far cry from dismembering the big banks, it is also a rejection of bailout culture – a statement that banks may no longer be the government’s favored child.