The new New Deal

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The new New Deal

For over a decade the triumph of the Anglo-American model of capitalism seemed assured: but no longer. So what happened to the Washington Consensus, and what new ideology might replace it?

A YOUNG ENTREPRENEUR builds up an energy empire that takes the US market by storm. He creates an impossibly complex financial pyramid made up of hundreds of subsidiaries, on most of whose boards he sits. He deftly juggles stock between these subsidiaries, making his company the toast of the stock exchange, until the market crashes, his investors lose millions, and he sinks in a matter of weeks from national hero to figure of hate. He becomes a symbol of greed and larceny and prompts the US president to promise to winkle out corporate crooks like him and clean up the economy. He goes into self-imposed exile. Sounds familiar? But it's not Enron's Andy Fastow: it's Samuel Insull (pictured right), one-time CFO to Thomas Edison and the archetypal bad capitalist of the 1929 crash.

Insull built up what ultimately became known as the Commonwealth Edison Company into one of the world's biggest corporations. After the crash, he became the figure who more than anyone inspired Franklin D Roosevelt's New Deal, with Roosevelt, not unlike George W Bush, promising to "get the Insulls".

Insull's fall marked the end of a long period of laissez-faire capitalism and the beginning of 30 years of regulation, government intervention and Keynesian mixed-economy strategies.

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