This book was a bit too scholarly and dry for my taste. There are lots of tables and data included and the authors definitely did their research! I personally like anecdotes from history more than simply numbers, although I do understand the importance of good collections of data. The authors take a look at the past 800 years of financial data and various crisis that have occurred and compare it to the present. Essentially, they come to the conclusion that, not surprisingly, right before a crisis many people come to believe that this time is different. They won't make the same mistakes as people in the past, etc. The last few chapters which is section III of the book read easier and present a pretty good overview of the current crisis that is unfolding. From Amazon.com:
The authors use copious amounts of data . . . to make the compelling case that any well-informed person should have seen the Great Recession coming. The essence of their book is that while financial crises come in different varieties, they are not mysteriously born of undersea earthquakes, but frequently occurring events that can be spotted and even controlled if politicians and regulators know what to look for.
(Devin Leonard New York Times )
Reinhart and Rogoff have compiled an impressive database, which covers eight centuries of government debt defaults from around the world. They have also collected statistics on inflation rates from every country where information is available and on banking crises and international capital flows over the past couple of centuries. This lengthy historical study gives what they call a 'panoramic view' of the unending cycle of boom and bust, showing how claims that 'this time is different' are invariably proven wrong. . . . This Time Is Different doesn't simply explain what went wrong in our most recent crisis. This book also provides a roadmap of how things are likely to pan out in the years to come. . . . This Time Is Different is an important addition to the literature of financial history.
(Edward Chancellor Wall Street Journal )
Professor Rogoff and his longtime collaborator Carmen Reinhart . . . know more about the history of financial crises than anyone alive. The pair have just published their broad survey of financial crises, This Time is Different. In an era when most 'analysts' rely on maybe 30 or 40 years' worth of financial history--and then only that of the U.S.--the authors' knowledge of financial crises and government bond defaults going back to the Spanish empire and before offers a richer perspective.
(Brett Arends Wall Street Journal )
Buy: This Time Is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart and Kenneth Rogoff
I don't think it's that simple. Looking backwards at events is very different from predicting events. Even today we could reverse course if our politicians had the guts. So while I agree we are facing an economic disaster of biblical proportions I don't agree that recent history is prophetic.
ReplyDeleteIt's important to know the reasons things happen otherwise we would make the same mistakes again. Our problem is our politicians have been buying votes with tax revenues and in the process created an enormous welfare class. Now everyone on the dole, including government employees, don't want the gravy train to end. It is political suicide for any politician to try to rein in or end the gravy train. There is no other choice now but to watch this train run off the tracks taking our country with it.