A year ago for Christmas I received a Kindle eReader (thank you Tammy!) and it has greatly accelerated my consumption of books. One of the subjects that I dove (continued to dive) into was the causes of the financial collapse. The conditions that contributed to our undoing, how we get out of our ongoing mess and the steps that should be taken to prevent a repeat are vitally important to our future as well as to our children and their children.
I have written about this myself since 2008 (see here and here for instance) and have read a number of books on the subject (see my Whodunit list down to the right on this page under Learning From History) that I thought covered fairly well the breadth of the subject and helped me refine my understanding. However I was humbled last night by a blog post on The Baseline Scenario that linked to Reading About the Financial Crisis: A 21-Book Review by Andrew Lo, a truly epic undertaking that is well worth reading on its own.
The causes are multiple and complex but I believe there are a few fundamental changes (or unchanges) that will prevent repeats. If you read only one of these books I’d read two: “This Time Is Different” by Reinhart & Rogoff and “Too Big To Fail” by Sorkin (you can pick them up by clicking the link on the list to the right). The first will give you the history of 800 years of financial collapses, always engendered by ‘This time is different’ thinking and the second will give you a very broad understanding of how ‘This time is different’ played out most recently.