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Η επόμενη οικονομική καταστροφή: Γιατί επέρχεται και πώς θα την αποφύγουμε
Ο σύγχρονος δημόσιος διάλογος σχετικά με τις οικονομικές κρίσεις συνήθως επικεντρώνεται στο ρόλο του δημόσιου χρέους και στο ρόλο που παίζουν στην οικονομική ανάπτυξη οι χρηματοδοτούμενες από το χρέος δημόσιες δαπάνες. Αυτό το διαφωτιστικό και προκλητικό βιβλίο αποδεικνύει ότι εκείνο που περιορίζει την ανάπτυξη και πυροδοτεί οικονομικές τραγωδίες, όπως η χρηματοπιστωτική κρίση του 2008, είναι η ταχύρρυθμη επέκταση του ιδιωτικού και όχι του δημόσιου χρέους.
Ο Richard Vague, εμπειρογνώμων του τραπεζικού κλάδου ο ίδιος, βασιζόμενος στα ευρήματα μιας ομάδας οικονομολόγων, υποστηρίζει ότι η Μεγάλη Ύφεση της δεκαετίας του 1930, η οικονομική κατάρρευση της προηγούμενης δεκαετίας, και πολλές άλλες οικονομικές καθιζήσεις σε διάφορες περιοχές του πλανήτη ακολούθησαν πάντα μια απότομη άνοδο του ιδιωτικά διακρατούμενου χρέους. Ο Vague παρουσιάζει έναν αλγόριθμο για την πρόγνωση των κρίσεων και υποστηρίζει ότι η Κίνα ενδέχεται να γνωρίσει σύντομα μια καταστροφή. Δεδομένου δε ότι τα επίπεδα του αμερικανικού χρέους δεν έχουν μειωθεί σημαντικά από το 2008, θεωρεί ότι η οικονομική ανάπτυξη στις ΗΠΑ θα καρκινοβατεί εφόσον οι τράπεζες δεν υιοθετούν μια πολιτική αναδιάρθρωσης του χρέους.
Κάθε ενημερωμένος πολίτης, ιδιαίτερα αυτός που ενδιαφέρεται για την οικονομική πολιτική και ιστορία, θα θελήσει να αναμετρηθεί με τα δυσάρεστα επιχειρήματα και αποδεικτικά στοιχεία του Vague.
Ο Richard Vague, εμπειρογνώμων του τραπεζικού κλάδου ο ίδιος, βασιζόμενος στα ευρήματα μιας ομάδας οικονομολόγων, υποστηρίζει ότι η Μεγάλη Ύφεση της δεκαετίας του 1930, η οικονομική κατάρρευση της προηγούμενης δεκαετίας, και πολλές άλλες οικονομικές καθιζήσεις σε διάφορες περιοχές του πλανήτη ακολούθησαν πάντα μια απότομη άνοδο του ιδιωτικά διακρατούμενου χρέους. Ο Vague παρουσιάζει έναν αλγόριθμο για την πρόγνωση των κρίσεων και υποστηρίζει ότι η Κίνα ενδέχεται να γνωρίσει σύντομα μια καταστροφή. Δεδομένου δε ότι τα επίπεδα του αμερικανικού χρέους δεν έχουν μειωθεί σημαντικά από το 2008, θεωρεί ότι η οικονομική ανάπτυξη στις ΗΠΑ θα καρκινοβατεί εφόσον οι τράπεζες δεν υιοθετούν μια πολιτική αναδιάρθρωσης του χρέους.
Κάθε ενημερωμένος πολίτης, ιδιαίτερα αυτός που ενδιαφέρεται για την οικονομική πολιτική και ιστορία, θα θελήσει να αναμετρηθεί με τα δυσάρεστα επιχειρήματα και αποδεικτικά στοιχεία του Vague.
128 pages, Paperback
First published July 1, 2014
8 people are currently reading
113 people want to read
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Displaying 1 - 6 of 6 reviews
September 15, 2014
The author eschews all conspiracy theories in explaining what causes economic disasters such as the burst of the housing bubble in 2008. He shows that rapid expansion in private debt, on top of an already high private debt load, leads to a loss of equity and buying power that make it very difficult for both consumers and businesses to engage in economic activity.
He notes that the government's approach has been to prop up the lenders in such a crisis, when it would make more sense to prop up the borrowers. Instead of purchasing bad debts from banks, he would have the government dissolve the consumer's debt. As an example, if someone owed $100,000 on a home that drops in value to $80,000 he would have the bank lower the debt to 75% of the current value, or $60,000. The government would work with the lender to amortize the $40,000 loss over, say, 30 years to reduce the shock to the system.
When total private debt grows by over 18% in five years, on top of total private debt of 150% of GDP, the probability of an economic crisis approaches 100%, and an intervention becomes necessary.
My main disappointment in the book us that it did not stress the necessity of discouraging such high levels of private debt in the first place. My biggest surprise is that the author does not blame public debt for such economic disasters. The data shows that he is probably correct in this deduction.
The book is very short, under 100 pages. I highly encourage all to read it!
He notes that the government's approach has been to prop up the lenders in such a crisis, when it would make more sense to prop up the borrowers. Instead of purchasing bad debts from banks, he would have the government dissolve the consumer's debt. As an example, if someone owed $100,000 on a home that drops in value to $80,000 he would have the bank lower the debt to 75% of the current value, or $60,000. The government would work with the lender to amortize the $40,000 loss over, say, 30 years to reduce the shock to the system.
When total private debt grows by over 18% in five years, on top of total private debt of 150% of GDP, the probability of an economic crisis approaches 100%, and an intervention becomes necessary.
My main disappointment in the book us that it did not stress the necessity of discouraging such high levels of private debt in the first place. My biggest surprise is that the author does not blame public debt for such economic disasters. The data shows that he is probably correct in this deduction.
The book is very short, under 100 pages. I highly encourage all to read it!
July 31, 2014
A short and easy-breezy read, this book makes a single point: private debt is to blame for financial busts. High levels and high growth rates of private borrowing are almost always part of the boom that ends badly. The book drives this point home repeatedly, using a lot of data and charts. Other economists have made this point before, but it bears repeating.
The books policy recommendations make sense within the context of a heavily state-regulated financial system.
The books policy recommendations make sense within the context of a heavily state-regulated financial system.
August 1, 2020
Published during the great recession, reading this short book was a curiosity, to see how well the author predicted the "next economic disaster" which he clearly missed pretty spectacularly. Though, I couldn't blame him, as virtually no one coming from the field of finance or economics would have likely predicted a pandemic to be the next major economic event.
Instead, the author's focus is on the connection between the % of private debt to GDP and an onset of a recession 'shortly thereafter". His policy prescriptions are mostly focused on controlling the elevated rise of private debt, by requiring larger reserve requirements etc.. He also dedicates some time to China and it's policies, and identifies several key issues, including an overcapacity in infrastructure (and also discusses the under-capacities of the United States). He warns that China may face sustained shorter growth rates, if those structural issues were not addressed.
In retrospect, we see overcapacity motivated the "Belt and Road Initiative" (BRI), which despite some major hiccups, has helped China smooth out their in-balance, while their economy converted into a more service/consumer oriented economy. Though China did eventually experience sub 10% YoY %Change in GDP growth, the cause of those were probably different from what the author predicted, which focused mostly on the "empty" cities/buildings that were being reported on frequently in the western press in that era.
His prescriptions in the US may also end up being fruitless, since the advent of FinTech/alternative currency/digital trading platforms/digital-money transfer etc. a few years after the post-recession 2010 era, I imagine private debt is increasing beyond the traditional organs of US banking.
The brevity of this book makes it mostly a historical artifact. Get it if you are interested in the thinking of the era, besides that, there are better books that deal with the great recession or financial crisis in general. Not recommended
Instead, the author's focus is on the connection between the % of private debt to GDP and an onset of a recession 'shortly thereafter". His policy prescriptions are mostly focused on controlling the elevated rise of private debt, by requiring larger reserve requirements etc.. He also dedicates some time to China and it's policies, and identifies several key issues, including an overcapacity in infrastructure (and also discusses the under-capacities of the United States). He warns that China may face sustained shorter growth rates, if those structural issues were not addressed.
In retrospect, we see overcapacity motivated the "Belt and Road Initiative" (BRI), which despite some major hiccups, has helped China smooth out their in-balance, while their economy converted into a more service/consumer oriented economy. Though China did eventually experience sub 10% YoY %Change in GDP growth, the cause of those were probably different from what the author predicted, which focused mostly on the "empty" cities/buildings that were being reported on frequently in the western press in that era.
His prescriptions in the US may also end up being fruitless, since the advent of FinTech/alternative currency/digital trading platforms/digital-money transfer etc. a few years after the post-recession 2010 era, I imagine private debt is increasing beyond the traditional organs of US banking.
The brevity of this book makes it mostly a historical artifact. Get it if you are interested in the thinking of the era, besides that, there are better books that deal with the great recession or financial crisis in general. Not recommended
May 20, 2021
Interesting book. Makes a strong case for seemingly impending doom but I believe the proposed solution is too idealistic.
January 13, 2015
The author points out a situation that is too often overlooked, but when it comes to the political realities of who finances campaigns, support and lobby those in office, I don't see much changing. Our representatives showed their colors in their demands for the first budget deal of 2015.
September 24, 2014
In a relatively brief book Richard Vague has identified how to predict financial crises, explain why they happen and offered a way forward to avoid such calamities as we saw in 2008 in the future.
Displaying 1 - 6 of 6 reviews