For some reason I remember Lehman Day (September 15, 2008) pretty well. I was reading the New York Times online in between teaching classes when the news popped up on the screen. It isn’t that I’m particularly interested in business news although I make an effort to keep up with international economics for my classes. But that day stayed with me because I remember feeling completely bewildered by what was happening. To me it was obvious that all heck was going to break loose, but it didn’t seem to be obvious to our political leaders. After 8 years of fundamentally disagreeing with most of our leadership’s policies, it seemed like this was the outgoing middle finger to America.
Once the great recession started I wished someone would or could just sit down and explain everything. Trying to decipher the news at that time (and wade through the partisan BS) was impossible. You could get bits and pieces, but no solid explanations were readily available. In this chronicle of the events leading up to and after the crash of 2008, Blinder has tried to fill that gap and he does a fabulous job. While a basic understanding of economics and finance is helpful, he defines complex terms and presents difficult information in a clear way. And I mean that when I say clear. He is almost conversational in tone, but it doesn’t sound condescending. Only one or two chapters were a bit tough to get through (the one on spreads was a bit brutal), but the rest honestly reads like a thriller. Except it is scarier because you know this is all real and your next door neighbor did lose his house and job and you lost your retirement funds.
I also really appreciated this book because it corrects much of the collective amnesia that infects this country. Things like:
- The government gave a away cash to the banks! (WRONG: The government made loans and investments.)
- The government lost all of that taxpayer money through TARP (WRONG: the government made a profit.)
- TARP and the stimulus were the same thing (WRONG WRONG WRONG)
- This all happened on President Obama’s watch (…….wtf?!)
Not that anyone will remember this tomorrow …
But not to give you the wrong impression. He stays away from partisan politics and focuses on what both sides did wrong. When he writes that President Obama’s biggest issue was not staying on message and communicating plans effectively, I couldn’t agree more. Unfortunately the President has allowed others to frame the issues (typically framed in lies–see above) and thereby set the agenda. It is frustrating to watch, but maybe, just maybe Michelle will have given him this book for Christmas and he will take heed. One can hope.
And if not we will have all forgotten it in another 8 years.