Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

For Geithner and his cohorts it was clear that swift and decisive action paid dividends. Compared with the disastrous performance of the European economy, the United States was set back on track.5 The leadership of American finance renewed itself. Even when viewed narrowly in accounting terms, many of the Treasury and Fed support programs made a profit for the American taxpayer.6 The benefits of preventing a second Great Depression were vast. By contrast with the European experience it is not hard to see how this self-congratulatory American narrative gained purchase. But its economic merits are not so obvious as its proponents presume. And it offered no comfort to the advocates of laissez-faire. Gone were the days when economic policy was about shrinking the state to set free the spontaneous order of market liberty. No longer did wisdom lie in devising predictable rules to curtail the arbitrary discretion of policy makers. Economic policy modeled on warfare was a matter of will, vigilance, tactical nous and firepower. And despite the populist appeal of the military rhetoric, there was a political price to pay.7 The crisis fighting of 2008–2009 scrambled American politics.