‘Crashed: How a Decade of Financial Crises Changed the World’ by Adam Tooze

Adam Tooze exactingly retraces of the 2008 financial crisis from its beginnings in Clinton era deregulation and the creation of the Eurozone without a ‘Federal Reserve’ through to the reverberations with the rise of far-right parties in Europe, Brexit, Trump and Chinese currency squabbles. The issue is that this had already been done, by the man in the picture below, in his books “Adults in the Room’, ‘The Global Minotaur’, and ‘Explaining the Economy to My Daughter’.

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And not only that, Yanis Varoufakis put his head on the block by attempting to negotiate loan forgiveness for the Greeks in the midst of a stark humanitarian crisis, enraging the entire EU establishment. Reading Tooze’s book is similar to reading the research notes of Varoufakis’ book prior to the weaving of Shakespearean and Greek tragedy elements that are so important to overall narrative. Adam is the blow by blow commentator while Yanis, having been an observer and a participant, writes the sober, descriptive post-match analysis.

We know all of the elements – removing Glass-Steagall enables banks to be both commercial and investment focused creating major conflicts and risks, a major credit bubble, Europeans crying foul at an American mortgage crisis only to discover that their entire banking system is exposed, no criminal convictions, public backlash and then the rise of xenophobic parties.

Tooze adds the dimension of how much the American Republican party seemed to want the US banking system, and subsequently the global banking system, to collapse with their reticence to aid the response and recovery efforts. Additionally, none of the left leaning governments who propped up the system during the crisis saw any recognition of their work and have even suffered for their work. But that is largely it for Tooze’s book. The rest has been covered by Varoufakis with greater clarity and better illustration of the basic human failures that underpin our financial crises.

My bankruptcy professor said that only two emotions drive investors ‘fear and greed’. Tooze pieces together the crisis without a deep look at how the financial and political structures require and amplify ‘fear and greed’. With that omission, the book feels more eye witness report than insightful commentary.

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