Books to Get You Thinking
September 2010 marks the second anniversary of the tumultuous financial crisis of 2008 the undercurrents of which had been brewing since early 2007. It was a time of intense financial upheaval, a time when financial giants like Lehman Brothers and Wachovia crumbled, and AIG the country’s largest insurer of Banks was on the verge of collapse. The shock waves have reverberated to all corners of the world and in the past two years the dynamics of the global economic system have been rewritten. This month’s picks analyze the events that led to this catastrophic financial collapse and point to what directions the future will likely hold for the world economy.
On the Brink: Inside the Race to Stop the Collapse of the Global Financial System by Henry Paulson
The former chairman of Goldman Sachs and U.S. Treasury Secretary, Henry Paulson’s gripping memoir of the financial crisis takes the reader to the fascinating drama that was unfolding behind the scenes in September2008 to avert what could have been, if left unchecked, an unprecedented global financial catastrophe. Readers get a firsthand account of the fast paced political and financial maneuvering that took place in the race against time to try and put a stop to the impending collapse of the US financial system. Not only does the book provide a detailed perspective on the many players entangled in the drama but it does so with a minimal use of financial jargon making the account very readable for those unfamiliar with the subject. Coming from someone with a lifetime of experience working in the financial industry, the author’s plea for implementing changes to the financial system that would help avert a similar crisis in the future holds particular credence.
Crisis Economics: Crash Course in the Future of Finance by Nouriel Roubini and Stephen Mihm
Nouriel Roubini, a Professor at the New York University’s Stern School of Business shot into prominence when he accurately predicted the impending financial crisis well ahead of time. In this book he teams up with Stephen Mehm who has written extensively on historical and economic issues for the Boston Globe and the New York Times magazine. The basic premise of the book is that financial and economic crisis in an economic system is a cyclical phenomenon that is in large measure both predictable and avoidable through the judicious use of appropriate financial regulatory measures and policy directions. The analysis is supported by a rigorous analytical study of economic history that spans different countries across time and places the current financial crisis in its context. The book is a brilliant analysis of the structural origins of the current crisis and the inherent contradictions built into the global financial system. The final chapters outline a framework of a stable and transparent financial system that would help avert an economic crisis like the one that currently grips us.
Freefall: America, Free Markets and the Sinking of the World Economy by Joseph Stiglitz
Nobel Prize winning author and Columbia University Professor, Joseph Stiglitz presents a lucid, detailed analysis that explores the roots of the current economic crisis. Tracing the economic history over the past few decades Stiglitz identifies several key elements that have played into setting up a financial system that is inherently volatile. The size of the financial institutions, unregulated financial trading, lack of transparencies and the indiscriminate use of new sophisticated financial instruments built upon risk laden investments contributed to an overleveraged debt structure that culminated in the tumult and chaos since 2007. Stiglitz draws attention to the underlying dynamics of pursuing short term profits instead of long term benefits, and the unsustainable levels of consumption propped up by overpriced housing prices as the underlying reasons for an unstable US economy. The author’s blueprint for a future stable economic system rests on a well laid out system of economic controls that would regulate the financial industry and prevent the kind of excesses that occurred in the recent past.
On the Brink: Inside the Race to Stop the Collapse of the Global Financial System by Henry PaulsonThe former chairman of Goldman Sachs and U.S. Treasury Secretary, Henry Paulson’s gripping memoir of the financial crisis takes the reader to the fascinating drama that was unfolding behind the scenes in September2008 to avert what could have been, if left unchecked, an unprecedented global financial catastrophe. Readers get a firsthand account of the fast paced political and financial maneuvering that took place in the race against time to try and put a stop to the impending collapse of the US financial system. Not only does the book provide a detailed perspective on the many players entangled in the drama but it does so with a minimal use of financial jargon making the account very readable for those unfamiliar with the subject. Coming from someone with a lifetime of experience working in the financial industry, the author’s plea for implementing changes to the financial system that would help avert a similar crisis in the future holds particular credence.
Crisis Economics: Crash Course in the Future of Finance by Nouriel Roubini and Stephen MihmNouriel Roubini, a Professor at the New York University’s Stern School of Business shot into prominence when he accurately predicted the impending financial crisis well ahead of time. In this book he teams up with Stephen Mehm who has written extensively on historical and economic issues for the Boston Globe and the New York Times magazine. The basic premise of the book is that financial and economic crisis in an economic system is a cyclical phenomenon that is in large measure both predictable and avoidable through the judicious use of appropriate financial regulatory measures and policy directions. The analysis is supported by a rigorous analytical study of economic history that spans different countries across time and places the current financial crisis in its context. The book is a brilliant analysis of the structural origins of the current crisis and the inherent contradictions built into the global financial system. The final chapters outline a framework of a stable and transparent financial system that would help avert an economic crisis like the one that currently grips us.
Freefall: America, Free Markets and the Sinking of the World Economy by Joseph StiglitzNobel Prize winning author and Columbia University Professor, Joseph Stiglitz presents a lucid, detailed analysis that explores the roots of the current economic crisis. Tracing the economic history over the past few decades Stiglitz identifies several key elements that have played into setting up a financial system that is inherently volatile. The size of the financial institutions, unregulated financial trading, lack of transparencies and the indiscriminate use of new sophisticated financial instruments built upon risk laden investments contributed to an overleveraged debt structure that culminated in the tumult and chaos since 2007. Stiglitz draws attention to the underlying dynamics of pursuing short term profits instead of long term benefits, and the unsustainable levels of consumption propped up by overpriced housing prices as the underlying reasons for an unstable US economy. The author’s blueprint for a future stable economic system rests on a well laid out system of economic controls that would regulate the financial industry and prevent the kind of excesses that occurred in the recent past.
-Nita Mathur
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