A Failure of Capitalism: The Crisis of '08 and the Descent Into Depression (Google eBook)

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Harvard University Press, May 1, 2009 - Business & Economics - 368 pages
21 Reviews

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 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 fuelled 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. Read Richard Posner's blog, and his latest article in The Atlantic.

  

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Review: A Failure of Capitalism: The Crisis of '08 and the Descent Into Depression

User Review  - Greg Neely - Goodreads

Like this. Judge can write. Read full review

Review: A Failure of Capitalism: The Crisis of '08 and the Descent Into Depression

User Review  - Jennavier - Goodreads

This isn't so much of a DNF as it is a not right now. I just do not have enough brain power to spare for Failure right now. It's an exhaustive study written by a federal judge. Intense and dry, but probably worth it. When I am in a place where I can read smart again I'll pick it back up:) Read full review

Contents

The Depression and Its Proximate Causes
1
The Crisis in Banking
41
The Underlying Causes
75
Why a Depression Was Not Anticipated
117
The Government Responds
148
A Silver Lining?
220
What We Are Learning about Capitalism and Government
234
The Economics Profession Asleep at the Switch
252
Apportioning Blame
269
The Way Forward
288
The Future of Conservatism
304
Conclusion
315
Further Headings
333
Index
337
Copyright

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About the author (2009)

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 .

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