After the Music Stopped
Alan S. Blinder is the Gordon S. Rentschler Memorial Professor of Economics and Public Affairs at Princeton University and the vice chairman of the Promontory Interfinancial Network.
Many excellent publications on the financial crisis were early drafts of history, written to meet the demand for rapid comprehension. Alan S. Blinder, esteemed Princeton professor, Wall Street Journal columnist, and former vice chairman of the Federal Reserve Board, waited, taking the time to understand the crisis and think his way through to a truly comprehensive and coherent narrative of how the worst economic crisis in postwar American history occurred, what the government did to combat it, and what we can do from here, wading through its wreckage as we still are.
Blinder describes how, beginning in 2007, the United States' financial sector, which had grown much too complicated for its own good, and far too unregulated for the public good, met a perfect storm. The much-discussed housing bubble popped, but the accompanying implosion of what Blinder refers to as the "bond bubble" was larger and more damaging. Some regard the financial business as a sideshow with no connection to the real economy where the jobs, factories, and stores are. But finance is more like the economic body's circulatory system: if the blood stops flowing, the body goes into cardiac arrest. When America's financial structure collapsed, the consequences were not just severe, but also widespread. It took the crisis for the world to realize how deeply interconnected and fragile the global financial system is. According to some commentators, enormous global factors were the primary causes of the crisis. Blinder disagrees, claiming that the problem began in the United States and spread internationally as sophisticated, opaque, and overpriced investment products were exported to a hungry world, nearly poisoning it.
The second section of the story describes how American and worldwide government involvement saved the world from utter collapse. Many of the operations of the United States government, particularly the Federal Reserve, were previously unthinkable. And they worked to an amazing and certainly misunderstood extent. The worst did not occur. Blinder provides clear-eyed solutions to the remaining problems, even if some of the options ahead are as controversial as they are inescapable. After the Music Stopped is an important piece of history that we cannot afford to overlook, since history reminds us that it will happen again.
Author: Alan S. Blinder
Link to buy: https://www.amazon.com/gp/product/014312448X
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