Regular price: $19.95
Buy Now with 1 Credit
Buy Now for $19.95
Economic research and discussion for the rest of us. Analysis of data supports theory explaining how excessive debt produces recession due to spending multipliers. Consumer spending drives 60%of GDP in USA, when leveraged debt is called in through margin calls or foreclosures then spending drops. Bailing out the banks is exalted the wrong solution.
Author presents a reasonable outline of Shared Risk lending that could alternate the present student loan crisis and fairly mitigate future crises.
Must reading for every concerned citizen.
The idea of banks and investors sharing the risks with borrowers when macro or system wide events take place was really interesting and novel to me. In theory at least this could be a good way to soften the crash for the people that need it the most when a crisis comes. The problem is, however, that investors would need to make these decisions prior to crisis and I think it would be hard to sway them in normal conditions.
The narration needs a bit of getting used to.
...and a large part of the increase in wealth inequality, and the mechanism of asset price bubbles and a whole lot more. I have read far more than is healthy about debt and the sub-prime crisis, but this book is something new. Wonderfully simple illustrations of economic phenomena - watch out for how debt allows 'optimists' to set the clearing price in a market. Mian and Sufi also have a brilliant knack for mining existing economic data to retroactively create natural experiments to tease out cause and effect. A bit like Freakonomics. Did the availability of mortgages cause the rise in house prices, or did rising house prices cause an increase in borrowing?
The book has a strong moral message and provides concrete proposals to move towards a safer and fairer economic model, with a better spread of risk. I really cringe when I think of the (UK) 'Help to Borrow' scheme in the context of this book. If you follow the arguments of this book, the 'Help to Buy' policy - encouraging poorer people to take on more housing debt - is utterly poisonous.
Some provisos : you have to be pretty good at auditing to enjoy this as an audiobook - I have ordered the hard copy for a second read. You also have to be pretty interested in the economic history of the US 2002-20012, there is detail and rigour here.
Narration. 'Leveraged Lorses,' as in Horses; still you get used to that. The narration is ANGRY, which I find tiring. Appropriate, but you can be angry and slightly laid back and ironic, rather than bitter and sarcastic for seven hours.
2 of 2 people found this review helpful