American economist and Princeton University professor Alan S. Blinder describes the perfect storm of circumstances that came together to create the first significant economic downturn of the twenty-first century in his nonfiction book After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead (2013). The New York Times bestseller After the Music Stopped was also named one of the top ten books of 2013 by Michiko Kakutani of the New York Times Book Review.
Introduction
Book name - After the Music Stopped
Author name - Alan S. Blinder
Language - English
Based On- Financial Crisis 2008
Genre - Finance, Business, Non-fiction, Economics
Synopsis - Non-Spoiler Alert!
Blinder explains how a perfect storm hit the American financial sector in 2007, which had become both too sophisticated for its own good and too uncontrolled for the general welfare. The harm caused by the collapse of America's financial system turned out to be both extensive and deep. The world only realised how profoundly linked and unstable the global financial system is after the crisis, much to its horror.
The second section of the narrative details how international and American government involvement prevented a complete collapse. Many of the steps taken by the American government, especially the Federal Reserve, were previously unthinkable. And they were successful—to an astounding and undoubtedly misunderstood level. The worst did not come to pass. Even while some of the decisions we must make in the future are as contentious as they are inevitable, Blinder offers clear-eyed solutions to the challenges now at hand. We cannot afford to overlook the significance of After the Music Stopped because, as history shows us, it will happen again.
About the Author,
American economist Alan Stuart Blinder is vice chairman of The Observatory Group and the Gordon S. Rentschler Memorial Professor of Economics and Public Affairs at Princeton University. In 1990, he established the Griswold Center for Economic Policy Studies at Princeton. He has worked with the National Bureau of Economic Research as a Research Associate since 1978.
Additionally, he is a vice chairman and co-founder of Promontory Interfinancial Network, LLC. According to IDEAS/RePEc, he is "considered one of the great economic minds of his generation" and is among the most prominent economists in the world.
From January 1993 to June 1994, Blinder was a member of President Bill Clinton's Council of Economic Advisors. From June 1994 to January 1996, he served as Vice Chairman of the Board of Governors of the Federal Reserve System.
Personal Verdict
Blinder has made every effort to write an accurate, thorough assessment of the issue. That is unquestionably the book's strongest section. He begins by listing seven crash-related causes. The majority of tales focus on one or two, yet he provides us with a lengthy list:
Housing and debt bubbles, leverage, lack of regulation, particularly with regard to shadow banking, dishonest lending practises, complexity, rating agency incentive structures, compensation-related motivations, and Other People's Money are just a few of the issues that need to be addressed.
As you can see, he keeps things straightforward and strictly within the purview of money. Here, you won't find rants about global imbalances, savings gluts, or inequality.
He only admits that the foreclosure crisis should have been handled more effectively by referring to it as a "train accident" and calling it so. Having talked extensively about moral hazard, he does not say whether he believes we are currently in the midst of another moral hazard-related train accident or whether we are doing fine. He claims at the beginning of his book that letting Lehman go was what sparked the entire catastrophe, but he never brings up the subject again to clarify whether he believes this to be true or whether it was just a rhetorical flourish.
The accessibility of this text is crucial. Everything is explained by the author in simple terms. I believe you could understand everything without being an expert.
Bottom Line
Anyone who wants to comprehend the "why" and the "how" of the crisis, recession, and response should read Blinder's book, which is on the short list of essential readings.
My ratings for the Book are 5/5.
You may buy this book from Amazon, After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead
Written by - Melita Pinto
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