Joseph's Reviews > Lost Decades: The Making of America's Debt Crisis and the Long Recovery

Lost Decades by Menzie David Chinn
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M_50x66
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Jul 16, 12


I agree with the cover blurbs saying this book may be the best single explanation of our recent financial crisis. The authors do a great job explaining the complex financial products that led to the interrelatedness of the global fiscal implosion. The authors believe government intervention was necessary to stem the global contagion and also call out the lack of effective government regulation which essentials allows the financial system to privative profits and socialize losses. Less blame is put on consumers who were leveraged nearly as much as large banks when taking into account what percentage of their incomes would be needed to pay off their mortgage, but are correct when they argue that there was no incentive to do due diligence when these mortgages were being packaged into financial products where the bank originating the mortgage would not be holding it on its books. Any replay of a crisis makes the explanation offered by commentators sober and filled with common sense which allows individuals to reflect on opportunities where things could have been different. Its too bad we continue to make the same mistakes over and over again.
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