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Showing reviews 1-5 of 27
 In the poop September 9, 2010
Mr. N. Foale (Devon, UK)
Shocking. The extent of the greed of our financial masters has left us all in the mire. Its certainly not clear to me that either government, the financial sector, or "the Man who is no longer on the Clapham Omnibus due to service cuts" properly understand the points made by this book.
So I fear, very much fear, that we're still deep in peril. Indeed we may well need an even worse crisis before we gain the political will to curtail the money fixated, so-called Anglo-Saxon, economic model we have built and lived through over the past 3 decades.
Permit me to speak like a quant for a moment. My algorithmic model indicates that we need 50% of the populace to actually read and absorb the lessons of this book. Said 50% must then continually batter the other 50% over the head with it, preferably using the hardback version, until they too have read the book. Only then might we come to our senses, pull together as a society, and move beyond our recent ignoble and insane financial history.
See also: The Black Swan: The Impact of the Highly Improbable, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets, and Reckoning with Risk: Learning to Live with Uncertainty.
"It's such a fine line between stupid and clever." September 9, 2010
takingadayoff (Las Vegas, Nevada)
Opening with the line from Spinal Tap, "It's such a fine line between stupid and clever," novelist John Lanchester explains what happened with the derivatives, credit swaps, subprime mortgages, all of it. It's important stuff, but if you are interested at all, you've already read the newspaper and magazine accounts and you have a general, if not specific, idea of what happened and why. As a professional storyteller, Lanchester makes a confusing and infuriating tale clearer, but sadly no less infuriating.
In addition to making exotic financial instruments somewhat more understandable, Lanchester has some intriguing theories. For instance, he thinks that the fall of communism allowed capitalism to spiral out of control. Before 1989, we in the West were so concerned with showing how superior and desirable capitalism was compared to socialism, that we allowed our governments to rein in capitalism so that there were not too many outrageously rich people and not too many desperately poor people. Once communism was no longer a serious threat, we were free to take the restraints off capitalism, resulting in the outrageous disparity of super-rich and working poor.
Lanchester also thinks that the same theory applies to why the West is no longer condemning torture or assassination. It's not as if we hadn't been using torture and assassination all along, but at least we were careful to feign outrage when we were caught at it and we made a show of signing international treaties condemning it. Now we waterboard openly and admit that we have a list of assassination targets. "Kill or capture" is our way of "bringing the enemy to justice" and it's not by chance that "kill" is always stated as the first option.
It had seemed to me that the moment when nations started ditching any pretensions to human rights could be dated to when George W. Bush said "You're with us or you're with the enemy," but Lanchester's theory makes more sense.
Lanchester also adds his voice to those advocating for children to learn about economics in school. This seems obvious, especially in countries where we tell ourselves that capitalism and democracy go hand in hand. Shouldn't our children learn more about it and about economics in general, considering how important it is in our everyday lives, our politics, our future?
Lanchester, having explained and discussed the credit crunch and how it came about, leaves us with little hope that it won't happen again. He compares it to a non-lethal heart attack, which we can learn from and take steps to reduce our risk of having another. But it seems more likely that we'll celebrate our near miss with a bottle of whiskey, a big steak, and a couple of cigars. What could go wrong?
 The Twist in the Tale! June 30, 2010
Chuck E (UK)
22 out of 23 found this review helpful
John Lanchester takes on the litany of insanity that constitutes orthodox economic theory - the myth of the rational market, the unhinged reliance on such slippery concepts as Value at Risk, the alphabet soup of MBSs, CDOs and CDSs and the conflicts of interest that were justified by the term `free market' (which seems to have become synonymous with `anarchy'). The major players are paraded for ritual humiliation - from the investment banks, to the ratings agencies, the `regulators' and government - all in thrall to a deeply flawed theoretical construct that served their own interests. The neoliberal ideal is ridiculed and exposed as the ideological construct that lay behind the rhetoric. Alan Greenspan is given special pride of place as the high priest of the Randian religion of self-interest.
And then ... just as the laissez-faire creed is lying prostrate on the canvas, after a pasting that makes Rocky Balboa's injuries look superficial, it's allowed to haul itself up on the count of nine and land a sucker punch direct to the chin of Lanchester's argument. It's as if the Donald Sutherland character in Invasion of the Bodysnatchers, who has been on your side all through the film suddenly turns and points the finger directly at you, screeching the high pitched whine of There Is No Alternative. It's as if Superman has turned out to be the bastard offspring of Lex Luther; as if Gary Cooper decides to throw his badge in the dust and hop on the noon train - Lanchester simply ditches his opposition and joins the enemy.
OK, so the bankers are wearing the black hats, but it's you townsfolk that are complicit. You may not have been eligible for social housing, you may have been living with your parents, you may have been prey to the enticements of Kirsty and Phil, you may have believed all (or almost all) of the `expert' opinion telling you that the problems of running modern economies had been solved, but you still made the CHOICE to take out a mortgage. Your wages may have stagnated, but you still listened to the siren bankers calling you to credit card island. Politicians may have been relaxed about the 'filthy rich', newspaper columnists may have been (almost) universally trumpeting the Murdoch mantra, even the BBC may have been co-opted on pain of a licence review - but YOU took the bait.
Then, having apparently slain the dragon of `free markets', Lanchester ends by accepting that orthodox (i.e. neoliberal) solutions are the only game in town. Slashing the public sector, laying off doctors, nurses, teachers and policemen. He doesn't explain how excising these jobs at a time when aggregate demand is already heading off a cliff will lead to anything other than a classic deflationary death spiral. It's as if aliens have wiped the views of Keynes - whom he quotes glowingly throughout - and Krugman from his memory banks. He perpetuates the canard that the public and private sectors are set in opposition, rather than symbiosis. He doesn't say why putting nurses and teachers on the dole will improve the prospects of private sector workers. Nurses and teachers buy cars and houses, furniture and TVs, restaurant meals and groceries - if they stop spending while the private sector remains in the land of the living dead, how does this help the economy in a downturn? How does halting the building of hospitals, schools and roads help laid off construction workers? Yes, borrowing will have to be reined in but, as in 1937, 'Grant us chastity and continence, only not yet.' Of course, Keynes would argue that a synchronised retrenchment of the kind Lanchester accepts as inevitable is the last thing the world economy needs - but by this time he's been airbrushed out of history as cackhandedly as Trotsky in a group shot of the Politburo.
This kind of argument is more insidious than the overt propaganda we get from right-wing economists because, while it parades all the obvious inconsistencies inherent in their economic models, it ends with the same message: THERE IS NO ALTERNATIVE to the dismantling of welfare and open warfare on public services. If I was a Friedmanite I would be smiling in smug satisfaction.
 An enjoyable tubthumping rant May 30, 2010
Stefan43 (Brussels, Belgium)
1 out of 1 found this review helpful
This is not a neutral calm dispassionate detailed account of the financial crisis. Lanchester is not an economist, and seems to hold the profession in contempt. The book is a bit general and short on detail in places, and contains some silly mistakes (fortunately the UK deficit is not over £160 billion - that would be truly scary - it is the national debt). Rather this book is a polemical rant against banks, which were taken over by mathematicians but totally failed to calculate risk correctly, politicians and regulators who stood by and watched it happen, and also the public, which lapped up the easy credit. Anger drips off every page. Lanchester is an adoring admirer of the Western liberal social-democratic democraties, and considers that everything went wrong when the fall of the Berlin wall led to a 20-year-long victory party of unbridled capitalism. The last chapter is the best, and can be read as a stand-alone: Lanchester's conclusion is quite simply that the Anglo-Saxon brand of capitalism has failed. But an underlying theme is also that our current western standard of living is economically (and environmentally) unsustainable, and that we cannot determine our society on the basis of economics alone, which takes as its premiss that people constantly want more of everything.
A good read but.... May 27, 2010
Tony Alto (UK)
1 out of 1 found this review helpful
I purchased this book after reading a review of it in a magazine. In depth and done with a light touch was the essence of the review. I certainly found the book readable and a fascinating insight into the appalling issues surrounding the current economic climate of the UK and the World.
However, it is a bit dense in terms of content and presentation with few paragraphs breaking up the content. I did find it neccessary to keep a scrap pad nearby to use to work through the examples quoted.
Given the immense complexity of the financial sectopr I found this book fascinating and for a relative layperson in this area a worthwhile read, if you have an interest in the topic. I finished the book 'a sadder but wiser man!!'
Showing reviews 1-5 of 27
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