The New York Times
The Crisis of Capitalist Democracyby Richard A. Posner
Judge Posner continues to react to the current economic crisis and reflect upon the impact on our views and reliance on capitalism. Posner helps non-technical readers understand business-cycle and financial economics, and financial and governmental institutions, practices, and transactions, while maintaining a neutrality impossible for persons professionally committed to one theory or another.
The New York Times
This book is the most rigorous, detailed examination of the subject of origins we have so far.
The prolific federal judge and University of Chicago economist argues that competitive forces inspire financiers to take irrational gamblesespecially when they're betting other people's money. We cannot trust them to put the common good ahead of profits, says Posner. As a result, government must step in to limit the risks bankers take and, occasionally, repair the damage they inflict. Posner, who less than a year ago began his dissection of the crisis of 2008 with A Failure of Capitalism, has enormous credibility when he casts a skeptical eye on Wall Street. As an influential free-market thinker, he helped shape the antiregulatory ideology that inspired so much public policy since 1980...Posner offers solid suggestions for change. He echoes those, including former Fed Chairman Paul Volcker, who would reestablish the Glass-Steagall Act's separation of commercial banking from proprietary trading and other forms of high-risk finance. That would insulate the financing of small and midsized businesses from the gales of Wall Street. He also urges eliminating the semi-official status of the big three bond-rating agencies, paring back their conflicts of interest, and beefing up the beleaguered corps of civil servants who staff federal regulatory agencies. Good ideas, all. In his final pages, though, the author can't muster much confidence that America will overcome its splintered politics, the "quasi-bribery" of campaign money, or the bipartisan myth that we can thrive indefinitely on low taxes and profligate public spending. Posner may have shaken off old shibbolethsand hurray for thatbut at present he sees no reason to expect that courage or fresh thinking will prevail.
Posner presents well-argued suggestions for change and offers fresh thinking about the business cycle, building on Keynes's theories.
My advice is: Read it. While his book is not exactly beach reading, Posner is a fine writer with a real talent for making complex economic and financial matters clear to the average reader. If you're a little vague on exactly what a credit-default swap is or why deflation can be a bigger problem than inflation, The Crisis of Capitalist Democracy is just the ticket...Altogether, The Crisis of Capitalist Democracy is the best thing I've read on the origins and development of the "Great Recession."
John Steele Gordon
The best volume I have read specifically about the financial crisis and its implications is Richard Posner's The Crisis of Capitalist Democracy...Posner's book contains a formidable-looking chart of supply and demand curves, but do not be misled: this is a clear and brilliant exposition of the greatest economic news story for generations.
[A] compelling read...Notable for [its] high seriousness and sophistication...Posner unreels any number of sharp insights about shareholders, regulation and economists.
- Harvard University Press
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- 436 KB
Meet the Author
Richard A. Posner is Circuit Judge, the United States Court of Appeals for the Seventh Circuit, and a senior lecturer at the University of Chicago Law School.
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