ISBN-10:
0393338959
ISBN-13:
9780393338959
Pub. Date:
10/04/2010
Publisher:
Norton, W. W. & Company, Inc.
Freefall: America, Free Markets, and the Sinking of the World Economy

Freefall: America, Free Markets, and the Sinking of the World Economy

by Joseph E. Stiglitz

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Product Details

ISBN-13: 9780393338959
Publisher: Norton, W. W. & Company, Inc.
Publication date: 10/04/2010
Edition description: Reprint
Pages: 480
Sales rank: 794,155
Product dimensions: 8.54(w) x 11.28(h) x 1.17(d)

About the Author

Joseph E. Stiglitz is a Nobel Prize–winning economist and the best-selling author of The Great Divide, Rewriting the Rules of the American Economy, The Price of Inequality, Freefall: America, Free Markets, and the Sinking of the World Economy, and Globalization and Its Discontents. He is a columnist for the New York Times and Project Syndicate and has written for Vanity Fair, Politico, The Atlantic, and Harper’s. He teaches at Columbia University and lives in New York City.

Table of Contents

Preface xi

Acknowledgments xxvii

Chapter 1 The Making of a Crisis 1

Chapter 2 Freefall and Its Aftermath 27

Chapter 3 A Flawed Response 58

Chapter 4 The Mortgage Scam 77

Chapter 5 The Great American Robbery 109

Chapter 6 Avarice Triumphs over Prudence 147

Chapter 7 A New Capitalist Order 184

Chapter 8 From Global Recovery to Global Prosperity 210

Chapter 9 Reforming Economics 238

Chapter 10 Toward a New Society 275

Afterword 299

Notes 345

Index 417

What People are Saying About This

From the Publisher

"A useful and timely book.... It is a powerful indictment of Wall Street, the United States financial sector and the Federal Reserve Board." —-The New York Times

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Freefall 3.5 out of 5 based on 0 ratings. 40 reviews.
Anonymous More than 1 year ago
This header sentence captures the book's message for me. I read slowly because I found it hard to deal with sadness and anger at what my boomer action has helped to perpetrate. I do not include my parent's generation in this mess. Joseph Stiglitz presents a thoughtful refreshing message for those willing to reflect and, possibly, change course. The book may be dismissed as LIBERAL pandering by flippant conservatives, (there are good conservative thinkers out there by the way). They might point to weak minded socialist-oriented thinking. Idea: think about educating yourself about socialism and then speak. Their basic plan is to simply move on - pick ourselves up by the bootstraps and, with help from above, do just what we have been doing because it's the BEST way to prevail and because free markets with minimal regulation correct themselves! Why listen to anyone else? Done! Ah, remember there were those who suggested the world was round! Alternative: Ask yourselves why B companies, established with the intent of combining growth and profit with a compassionate hand to environmental and world citizen support are prospering and maybe change course. If you don't know about these companies - read about them! As a late 60's 3rd world traveling hippie teenager turned MBA work grinder and top "spin" producing executive, I have been both involved in the corporate, (BANKING!), world and I have also traveled throughout third world countries, both as the child of an immigrated WWII European father and as an adult. I have perspective and I'm a right leaning Centrist politically. Read this book with the headline phrase in mind and think about the last 40 years - especially if you have lived through all of it. I've lived and worked both sides of the equation. I've done everything a good capitalist might do but no longer question why I'm disengaged with my surroundings and work. I'm relieved to see a few others in this chaos have a voice to speak publicly about this latest "Emperor's New Clothes" wardrobe. I'm changing clothes because they no longer fit. Many of us have no time and take no time to do anything but drop exhausted from debt slavery and TV-PC world - not really listening to what the rest of the world has to say. We comfort ourselves with individual coping strategies. It's going to be OKAY. We just always assume that we have the ultimate answers - akin to the elder, controlling, aged, but not wiser, Grandfather at the head of the table gesturing and stabbing the air with dictums while everyone else rolls their eyes and moves on - no longer respecting this individual's presence or experience mainly because Grandpa doesn't listen to anyone and simply demands what he has always believed and won't change. What might we think if he would, instead, listen and ask questions - or, change places with someone else at the table and become the wise elder mentor? I'm looking for a mentor ... and this author has caught my eye and my respect. Well, it's time for some of us to get a grip. I believe that, as a nation, we too, believe that we are TOO BIG TO FAIL. We still talk too much and dictate too much - time to start observing and and taking stock. Think about it.
Fortunatus More than 1 year ago
Joseph Stiglitz's description of our current economic system (i.e., Wall Street machinations) as 'ersatz capitalism' is spot on. Wall Street-style capitalism is far removed from the capitalism of Adam Smith's 'invisible hand.' The near demise of America's manufacturing industry and deterioration of the United States infrastructure (e.g., bridges, roads, electrical grid, etc.) are illustrations of how 'ersatz capitalism' is causing the United States to become a second rate power a la Great Britain. We ignore Stiglitz's apropos call for a new economic system at the risk of our own economic peril.
willyvan More than 1 year ago
In this brilliant book, the noted American economist Joseph Stiglitz explores why the crisis happened. Across the world, the crisis destroyed 50 million jobs and thrust 200 million people down into extreme poverty. From December 2007 to October 2009 the US economy lost 8 million jobs and unemployment rose to 10.2 per cent. Only 58.5 per cent of the working age population was in work. 2.3 million Americans lost their homes in 2008 alone. Bank executives' contracts were sacred; workers' wage contracts were negotiable - down. Stiglitz has a chapter called The Great American Robbery. The top 50 hedge and private equity fund managers got an average $588 million each in 2007. Nine US banks, which made record losses of $100 billion, got $175 billion public money, and promptly paid out a record $33 billion in bonuses. As the Chair of one of the House of Representatives' Committees said, "the banks run the place . they give three times more money than the next biggest group." Stiglitz notes that the UK's partial privatisation of pensions shifted 40 per cent of their value out of the pensions and into financiers' fees. The US government, like the British, has lent money to the banks at very low interest rates. Stiglitz asks, "Why not use the government's ability to borrow at a low interest rate to provide less expensive credit to homeowners under stress?" Banks that are 'too big to fail' gain from this access to cheaper capital because lenders know that taxpayers will pick up the losses. So these banks grow at the expense of their smaller rivals. Public money went to the big banks, which didn't lend to small and medium businesses, but kept the money for themselves, in bonuses and dividends. Early in 2009, Hank Paulson, Secretary of the Treasury, ex-Goldman Sachs, gave AIG $180 billion, which then gave Goldman Sachs $13 billion. By contrast, US aid to Africa in 2008 was $6.5 billion. In the USA, financial firms back the student loans programme, a Public-Private Partnership in which the taxpayer bears the risk and private firms get the gains. The US government issues the loans, so there is no risk of non-payment, but the lenders still charge interest rates as if there were such a risk. Thus the US government gave the private sector $80 billion of taxpayers' money over the last ten years, because using private firms cost that much more than if the government had lent the money itself. Stiglitz shows that markets are not efficient and self-correcting; they do not allocate resources efficiently, especially not to innovation; and they redistribute wealth (from the poor to the rich), they do not create it. He points out that "Tax cuts encourage consumption, when the government should be promoting investment." The US government has embraced finance capital, so there is "a predictable outcome - future crises; undue risk-taking at the public expense, no matter what the promise of a new regulatory regime; and greater inefficiency."
ExiledNewYorker More than 1 year ago
This is a must read. The Nobel Economist dissects the economic collapse in a concise, accessible way and then critiques the government response. He prescribes better fixes and long term strategies to create a more stable, less capricious economic system. He also addresses the failures of his own profession and, indeed, its complicity in the false sense of security that enabled the financial fraud to continue so long.
San_Jose_Guy More than 1 year ago
Stiglitz exoplains most of what went wrong and names names.
Anonymous More than 1 year ago
Anonymous More than 1 year ago
I've read 4 "crisis of 2008" books now and with each lesson, a little more clarity about how these markets will fail us has been predominant. Nothing will get better and the world will not work together to create a eutopian civilization...we're on our own. Don't trust any financial institution or governmental agency...we're all screwed. From the hometown credit union, the family pediatrician, the middle school science teacher to the state legislatures, the federal senators, and foreign diplomats....everyone is out for themselves and we're all screwed.
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