Hall of Mirrors

Hall of Mirrors

The Great Depression, the Great Recession, and the Uses-and Misuses-of History

Book - 2015
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"A brilliantly conceived dual-track account of the two greatest economic crises of the last century and their consequences"-- Provided by publisher.
"There have been two global financial crises in the past century: the Great Depression of the 1930s and the Great Recession that began in 2008. Both featured loose credit, precarious real estate and stock market bubbles, suspicious banking practices, an inflexible monetary system, and global imbalances; both had devastating economic consequences. In both cases, people in the prosperous decade preceding the crash believed they were living in a post-volatility economy, one that had tamed the cycle of boom and bust. When the global financial system began to totter in 2008, policymakers were able to draw on the lessons of the Great Depression in order to prevent a repeat, but their response was still inadequate to prevent massive economic turmoil on a global scale. In Hall of Mirrors, renowned economist Barry Eichengreen provides the first book-length analysis of the two crises and their aftermaths. Weaving together the narratives of the 30s and recent years, he shows how fear of another Depression greatly informed the policy response after the Lehman Brothers collapse, with both positive and negative results. On the positive side, institutions took the opposite paths that they had during the Depression; government increased spending and cut taxes, and central banks reduced interest rates, flooded the market with liquidity, and coordinated international cooperation. This in large part prevented the bank failures, 25% unemployment rate, and other disasters that characterized the Great Depression. But they all too often hewed too closely and too literally to the lessons of the Depression, seeing it as a mirror rather than focusing on the core differences. Moreover, in their haste to differentiate themselves from their forbears, today's policymakers neglected the constructive but ultimately futile steps that the Federal Reserve took in the 1930s. While the rapidly constructed policies of late 2008 did succeed in staving off catastrophe in the years after, policymakers, institutions, and society as a whole were too eager to get back to normal, even when that meant stunting the recovery via harsh austerity policies and eschewing necessary long-term reforms. The result was a grindingly slow recovery in the US and a devastating recession in Europe. Hall of Mirrors is not only a monumental work of economic history, but an essential exploration of how we avoided making only some of the same mistakes twice--and why our partial remedy makes us highly susceptible to making other, equally important mistakes yet again"-- Provided by publisher.
Publisher: New York, NY : Oxford University Press, [2015]
ISBN: 9780199392001
Characteristics: vi, 512 pages ; 25 cm


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Dec 08, 2015

"Those who cannot remember the past are condemned to repeat it," said George Santayana - and this book provides ample evidence that there were warning signs that a meltdown was going to happen in 2008 (in fact it started the previous year), signs which drew parallels to the easy credit and crazy monetary policies of the 1920s. The fact the contagion spread to both sides of the Atlantic in both instances isn't just proof that money never sleeps but there are idiots on both sides of the pond who play fast and loose - with our money, and with devastating consequences. The sad thing is that another financial calamity will happen, and it won't take another eighty years.

Jun 06, 2015

Double your knowledge, double your fun, read about two depressions rolled into one.
Seriously, Eichengreen's parallel accounts of the Great Depression and the Great Recession illuminate both to great effect (pun intended). As a bonus, from time to time he lightens the proceedings by throwing in some acerbic comments. This is a good book for those who have followed the Great Recession and have some knowledge of the Great Depression. Highly condensed, it's probably not best as an introduction. What I especially liked was that the author keeps it moving. He provided enough detail to keep me interested (I hate rehashes). but avoided getting bogged down. I found it well written, if a trifle dense. It leans toward journal/newpaper style rather than academic. NO GRAPHS.


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