I am reading through a stack of new books about the Crash of 2008 and the lessons to be learned from it and I’m having a bad case of déjà vu.
Lessons of History
Back in the early 1990s everyone was writing books about America’s fall from power (Japan was kicking out butt — remember?). Paul Kennedy’s The Rise and Fall of the Great Powers was a best seller, proving that people would pay good money to read hundreds of pages of European history if they thought there was a chance it would help them understand why their paychecks weren’t keeping up with inflation.
Many others contributed to the discussion. I even wrote a book, Mountains of Debt, that attracted some attention.
Looking back I now recognize that we all approached the problem in pretty much the same way. We retold a section of history (recent history in some cases, ancient history in others), including and omitting facts and events in order to advance our particular viewpoint.
Why History Works
It got pretty tiresome after a while visiting and revisiting the same potholed patch of road, but it worked. History is really the study of change and the historical approach is the most useful one in transitional times. Now for example.
I’ve copied a couple of posts from my book review website to start a series on the Crash of 2008. I’ll add more in the coming weeks. Each book tells the same story in a different way, making a different point. Hopefully this will help you decide which books you want to read.
You’ll find my account of the Crash of 2008 in two chapters of Globaloney 2.0. Chapter 2 “Financial Globaloney: Safe as Houses” identifies several principles of “Financial Globaloney” that I argue helped blow up the bubble and contributed to bust.
Then, in Chapter 3 “The Crash of 2008 and the Global Market Myth” I tell the story of the crash in terms of the seven stages of financial crises, stressing the importance of Financial Globaloney.
I think my argument makes sense, but then I’m the author. I’ll be interested to see what people have to say when Globaloney 2.0 is published later this year.
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September 22, 2009 at 1:46 am
David Hill
If you studied the history that tells us Paul Krugman is an idiot in saying we need bigger stimulus and that powerful banking committee members [now riding to the rescue] prevented proper oversight and regulation of housing contracts – even bundled same into bad paper that spun out of control I’m with ya’.