In Freefall, Joseph E. Stiglitz, the Nobel Prize-winning economist describes the flawed theories and misguided policies that brought about the meltdown of 2008.
After examining the causes of the Great Recession of 2008, and looking at the government response, Stiglitz lays out suggestions for how America might use this “near-death experience”.
Insights:
1. The American economy is a debt-financed consumption binge supported by a housing bubble.
2. The too-big-to-fail banks will be allowed to continue much as before, over-the-counter derivatives that cost taxpayers so much will continue almost unabated, and finance executives will continue to receive outsized bonuses.
3. There are limitations to “market fundamentalism” - the notion that unfettered markets, all by themselves, can ensure economic prosperity and growth.
5. The failures in our financial system are emblematic of broader failures in our economic system, and the failures of our economic system reflect deeper problems in our society” — including growing inequities of wealth, a lack of accountability on the part of business and political leaders, and an emphasis on short-term gains as opposed to long-term benefits.
6. A “redistribution of income” and more progressive taxation might help stabilize the economy and calls for a new global reserve system.
[From the Great Books Series. Also see The Success Manual - Encyclopedia of Advice, which contains summaries of 100+ Most useful books.]
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