I have read a mountain
of economics books that purport to explain the great econopocalypse in which we find ourselves, but none can hold a candle to John Lanchester's Whoops! Why Everyone Owes Everyone and No One Can Pay
, a British book that explains the macro- and microeconomic phenomena with a novelist's sense of plot and clarity (Lanchester being a novelist) that nevertheless refuses to sacrifice accuracy for accessibility.
Lanchester explains the econopocalypse thus: a climate (the fall of the Soviet Union and the triumphal do-no-wrong belief in unfettered capitalism that ensued), a problem (using derivatives to expand risk, rather than limit it, which led to reckless lending in the housing market), a mistake (bankers assuming that they had laid off the risk using complex derivatives) and a failure (regulators refusing to look the financial gift-horse in the mouth). This provides an excellent framework for explaining the ways in which history, greed, and hubris conspired to create the worst financial crisis in memory.
What's more, Lanchester is funny, and he has a gift for making you revisit your assumptions about the world (your house is a highly leveraged asset that appreciates at the same rate as the overall economy, is difficult to liquidate, and if you manage it, you need to buy another house that has appreciated right alongside of it or find yourself homeless). He even manages to make Alan Greenspan and Maggie Thatcher funny, which is really saying something.
Alas, Lanchester is also a downer. At the risk of giving away the ending, he concludes with a compelling argument that the UK economy is likely to be roadkill for a very long time as a result of the financialization of the economy and the capture of the regulators who were supposed to keep an eye on it (he's also bearish on the US economy). Yeah, it's depressing. It's also probably true. And at least he made me laugh while he broke me the news.
Whoops! Why Everyone Owes Everyone and No One Can Pay
CNN Money has found multiple whistleblowers from Wells Fargo who were willing to go on the record and report that they were fired in retaliation for coming forward to report the massive fraud in which Wells Fargo employees opened up 2,000,000 fake accounts in their customers’ names, raiding their real accounts to open them, then […]
Netsweeper is a litigious cyberarms dealer that threatened to sue the University of Toronto’s Citizen Lab when its researchers outed the company for its work in helping Yemen’s despotic regime censor the internet; later, the company dropped its lawsuit.
Part of the economic argument for free trade deals is that they benefit workers by producing cheaper goods — even if you lose your manufacturing job, you can buy stuff a lot cheaper with the next job you get.
Evan Kimbrell, founder of the digital agency Sprintkick, recently released a series of online courses that feature some of the best advice we’ve come across. These courses are well worth your time, and will save you from making many typical mistakes down the line if you ever want to start your own business.With this Business […]
Handy is the most convenient solution we’ve found for booking a house cleaning at the last minute, and they do a really great job. It’s as easy as heading to the site, selecting a date and time that works for you and the number of rooms in your home. We’ve even scheduled emergency cleanings as soon as the following day. […]
With all the new amazing games and consoles out there, we still can’t help but have a soft spot for old school staples. From Super Mario to Mortal Kombat, classic games just never get old. Which is why we’re so excited to relive the nostalgia with our newest deal in the Boing Boing Shop: The Complete SNES […]