I've just finished reading Joseph Stigliz' review of the 2008 financial crash. In his book Freefall, he sets out the context of the financial institutions that were responsible for the downturn and the massive harm to the global ecomony. He gives a critical review of the appraisal and encouragement systems within banks and investment companies that gave their leaders disproportionate bonuses and salary relative to the work that they did.
Stigliz goes on to give a detailed critique of the actions of both the American government and the banks before and during the crisis. He talks about the current down turn whilst contrasting and comparing with past recessions and the Great Depression. This is a useful vehicle for explaining how the banks became so intertwined and how governments became so reliant on banks for growth. The book also touches on the rarely mentioned taboo of insider trading and it's role in the financial crunch.
What is most heartening about the book is that it isn't simply a critique of the governments' failure in safeguarding the taxpayer during a market crash. It also gives potential paths forward for government to follow in the future so it gives hope to the reader. The best part about this is that the solutions to our problem http://www.blogger.com/img/blank.gifaren't plucked out of thin air, they're tried and tested learnings from recessions and bubble bursts from over the past century. This relevance gives the reader confidence that Stigliz has done his homework, giving a thorough treatment of the matter.
In summary, it's a fantastic read. It's exciting and not packed with obscure jargon so you don't need an economics degree to understand what's going on. I will say however, some parts move so quickly (unexpected in a review of financial history) that going back and reading again is a must so that all the information can be assimilated. The book is available on Amazon :
