Crisis Economics

June 21, 2010
Roubini (Bailouts or Bail-ins), a professor of economics at NYU, was greeted with skepticism when he warned a 2006 meeting of the IMF that a deep recession was imminent. Along with economics historian Mihm, (A Nation of Counterfeiters) Roubini provides an in-depth analysis of the role of crises in capitalist economies from a historical perspective. With thumbnail sketches of nineteenth and twentieth century economic thought from Smith, Keynes, and others, they provide a context for understanding financial markets and the ways in which bankers and politicians relate to them. The authors also offer a theoretical context for understanding the current economic crisis and for using it as "an object lesson... , prevent them, weather them, and clean up after them." Dismissing the "quaint beliefs" that markets are "self-regulating," they take issue with the simplistic populist assumption that the present crisis was caused by greed or something "as inconsequential as subprime mortgages." They blame Alan Greenspan's refusal to use the power of the Fed to dampen unbridled speculation, choosing instead to pump "vast quantities of easy money into the economy and it there for too long." This will be a useful guide for readers attempting to get a handle on the present crisis.

In 2006, only a few people predicted the collapse of the housing bubble that would lead to economic crisis, and Nouriel Roubini was one of them. L.J. Ganser is the perfect voice for Roubini's message as he is at home with the alphabet soup of acronyms and jargon that permeate today's financial world. Roubini, a professor of economics, and Mihm, an economics historian, offer their take on the boom-and-bust patterns of economic crises, using historical analysis to put the recent financial crisis into perspective. Ganser delivers a steady, spirited reading, though his tone at times strays from that of a narrator to that of a news anchor, which is a distraction. However, his clear enunciation and distinct separation between ideas guide the listener through this complex text. E.N. (c) AudioFile 2010, Portland, Maine