A reader asked, what are the best books that can help us understand how we got into this economic mess — and maybe how we can get out. Here’s my short list (and as part of getting out of the Great Recession, I urge you to buy them at your local bookshop):
In Fed We Trust: Ben Bernanke’s War on the Great Panic, by David Wessel. This is a fascinating account of the decisions made by the Fed chairman, then New York Fed President Tim Geithner and then Treasury Secretary Hank Paulson during the worst of the fall of 2008. Bernanke’s biggest goal was to avoid the mistakes of the Depression-era Federal Reserve. In doing so, however, did he undermine democracy?
Freefall: America, Free Markets and the Sinking of the World Economy, by Joseph Stiglitz. The Nobel laureate economist looks at the roots of the collapse in market failure, perverse incentives, ideological blindness and careless deregulation. None of these problems have been corrected by the Obama administration.
13 Bankers: The Wall Street Takeover and the Next Meltdown, by Simon Johnson and James Kwak. Wowie, zowie — this is not a boring book by economists, although the authors are of that profession. It’s especially helpful in understanding how the biggest banks have gained decisive political leverage in Washington and are steering policies highly dangerous for the rest of the economy.
Crisis Economics: A Crash Course in the Future of Finance, by Nouriel Roubini. The author, of course, is one of the few major economists to call the crash well ahead and it made him a celebrity. This book examines past economic crisis as well as the roots of our current unpleasantness, with an eye for the policies that can help us avoid the worst kinds of crashes.
Chasing Goldman Sachs: How the Masters of the Universe Melted Wall Street Down…And Why They’ll Take Us to the Brink Again, by Suzanne McGee. This is another essential read on a root cause of the collapse that remains ticking. In this case, it looks at the investment bank that led Wall Street’s transformation into a risky casino with the world economy as betting chips.
Freedom From Fear: The American People in Depression and War, 1929-1945, by David M. Kennedy. This magnificent retelling of the Depression years, Herbert Hoover and the New Deal is thrilling history, as well as an important, timely and even-handed look at the critical years that gave birth to prosperous and stable mid-century America.
The Long Energency, by James Howard Kunstler. In The Geography of Nowhere, Kunstler offered the most trenchant analysis of the downside of American suburbia and car culture. This 2006 book, published at the height of the boom, looks at how the misallocation of resources into sprawl (and its financing), global competition for more scarce energy resources and climate change will make a future for which few Americans are prepared even now. Essential reading for optimists who worry and other realists.
Today’s Econ Haiku:
Now the second half
Rally’s gone, can we hold on
Change comes in quarters