Four years after the last financial crisis came to a head, it remains an open question whether the US economy is safe from a repeat. The answer depends on another question: What caused the crisis in the first place?
Fault for the crash lies, according to various popular theories, with some combination of over-leveraged banks, a culture of greed on Wall Street, the collapse of mortgage-backed securities, and financial institutions that are too big to fail. But according to Yale University economist Gary Gorton, all of these explanations are wrong, and regulators have done nothing to address the underlying cause of the meltdown.
Comments
"The problem behind the financial crisis was not what we think, says Gary Gorton." Well perhaps, that's because the mainstream media refuses the actual financial news. And this article STILL says nothing about the role of Ben Berbanke and the FED, so it is a dishonest article...If people read the WSJ and the Financial Times, they would know everything about the financial crises. ..But the Globe (and this writer) STILL doesn't want you to know.
I just read the book. The author has plenty to say about Bernake.
I've been fascinated by the financial crisis and have read a few books and lots of articles on the subject from many points of view. This book looks at the history of financial crisises in the U.S.. It's intersting stuff and Gorton's conclusions about our current affairs are much more nuanced than much of the ideologically slanted writing that I've read. I'm glad to have read the book. Gorton is convincing and I do recommend the book to anyone interested in the subject.