A Failure of Capitalism: The Crisis of '08 and the Descent into Depression
by Richard A. Posner
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From the Publisher: The financial and economic crisis that began in 2008 is the most alarming of our lifetime because of the warp-speed at which it is occurring. How could it have happened, especially after all that we've learned from the Great Depression? Why wasn't it anticipated so that remedial steps could be taken to avoid or mitigate it? What can be done to reverse a slide into a full-blown depression? Why have the responses to date of the government and the economics profession show more been so lackluster? Richard Posner presents a concise and non-technical examination of this mother of all financial disasters and of the, as yet, stumbling efforts to cope with it. No previous acquaintance on the part of the reader with macroeconomics or the theory of finance is presupposed. This is a book for intelligent generalists that will interest specialists as well. Among the facts and causes Posner identifies are: excess savings flowing in from Asia and the reckless lowering of interest rates by the Federal Reserve Board; the relation between executive compensation, short-term profit goals, and risky lending; the housing bubble fueled by low interest rates, aggressive mortgage marketing, and loose regulations; the low savings rate of American people; and the highly leveraged balance sheets of large financial institutions. Posner analyzes the two basic remedial approaches to the crisis, which correspond to the two theories of the cause of the Great Depression: the monetarist-that the Federal Reserve Board allowed the money supply to shrink, thus failing to prevent a disastrous deflation-and the Keynesian-that the depression was the product of a credit binge in the 1920's, a stock-market crash, and the ensuing downward spiral in economic activity. Posner concludes that the pendulum swung too far and that our financial markets need to be more heavily regulated. show lessTags
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Member Reviews
A clear, informed explanation of what's happening in this recession. A ground-up lesson on deflation, liquidity, deficit spending, banking, and finance. As in his other books, the policy diagnoses and recommendations are fresh, and the style is spare and plainspoken.
(I have one small complaint regarding tone, however. In one passage he deploys--without irony--the dated cliche "politically incorrect" to describe his policy prescriptions. He probably does not realize what a right-wing shibboleth this has become for younger, blog-savvy generations.)
(I have one small complaint regarding tone, however. In one passage he deploys--without irony--the dated cliche "politically incorrect" to describe his policy prescriptions. He probably does not realize what a right-wing shibboleth this has become for younger, blog-savvy generations.)
What is amazing is that now in the 2012 election the issues in this book , writtein in the 2008 election are just as fresh. Foreclosures, the deficit, banks too big to fail....a truly terrific small book describint what happened to the US 5 years ago. What is really great is that Posner has a blog following this subject that he correctly perceived had only just begun
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Economics for the layperson
33 works; 9 members
Author Information
45+ Works 2,791 Members
Richard A. Posner is Circuit Judge, the United States Court of Appeals for the Seventh Circuit, and a senior lecturer at the University of Chicago Law School
Common Knowledge
- Important events
- Financial Crisis of 2008
Classifications
- Genres
- Economics, Nonfiction, Business, General Nonfiction, History
- DDC/MDS
- 330.973 — Social sciences Economics Economics Economic geography and history North America United States
- LCC
- HB3722 .P67 — Social sciences Economic theory. Demography Economic theory. Demography Business cycles. Economic fluctuations
- BISAC
Statistics
- Members
- 184
- Popularity
- 177,005
- Reviews
- 2
- Rating
- (3.94)
- Languages
- English, Italian
- Media
- Paper, Ebook
- ISBNs
- 3
- ASINs
- 1
