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A review by michaelacabus
Caída libre by Joseph E. Stiglitz
5.0
We need books that make forceful motions for change; that push us past the malaise and stagnation that often envelopes our society.
Stiglitz's searing critique of the financial sector, and its responsibility for the cycle of recessions that have become characteristic of the US economy, is much needed.
Needed because 'recession' is a word that may spark fear (or morbid fascination, given the myriad economic articles with titles like "75% of economists predict this is when the next recession hits", making recession predicting akin to dentists recommending toothpaste) largely because it's causes are not so understood. I was in this camp who did not understand, too, and it's forgivable to be, given the huge effort by financial institutions (aided by the Republican and Democratic presidencies during the 2008 recession) to mask their responsibility. It even got a bit literary: don't call it "corporate welfare", for instance, when banks are bailed out...call it, "stimulus", something positive.
To many liberals, the name Obama may come as a surprise in its inclusion, but, as Steglitz points out, Obama, for all the hope and change he talked about, largely left the recovery efforts in the hands of the same people who presided over it, merely "rearranging the deck chairs". The result was a near absolute catering to the financial institutions that caused the crisis, and a hypocritical austerity applied to home owners who were taken advantage of by these institutions predatory lending practices.
This is refreshing, particularly as the narrative of individualism drove the narrative that foreclosures represented personal failings on the part of those who experienced them. It's not radical to think that that financial institutions have a moral obligation to society, but it does seem a foreign concept; faith in free markets was eroding, Stiglitz points out, and in our current time, we still see its effects. It doesn't take a huge leap to conclude that lack of faith in institutions during the recession, the witnessing of huge amounts of money going to financial firms and little to citizens, could be the seed for being disenchanted with political systems writ large, fueling a desire for something (or someone) who proclaimed to be outside the system.
That is the wrong lesson, according the Stiglitz; instead of abandoning the idea of market capitalism, we should be looking for ways to intermix socialist ideas. He makes the wise case that if we can somehow manage corporate welfare, we can manage social welfare, and the latter will give us more innovation, allow people to take more risks, and improve the economy more.
In many ways, this book is about than the 2008 recession; it is about a way to define a future society. Economics drives so much of what a society it, what it values; and to really prevent recessions is really about redefining what we value, to use moments of crisis to redefine society in an age of automation, climate change, and globalization.
This book is required reading to be a fully informed citizen; it is a counter narrative than what many financial institutions want out there, which means it is doing the work a good book should, being a bit dangerous in an effort to change the world.
A+
Stiglitz's searing critique of the financial sector, and its responsibility for the cycle of recessions that have become characteristic of the US economy, is much needed.
Needed because 'recession' is a word that may spark fear (or morbid fascination, given the myriad economic articles with titles like "75% of economists predict this is when the next recession hits", making recession predicting akin to dentists recommending toothpaste) largely because it's causes are not so understood. I was in this camp who did not understand, too, and it's forgivable to be, given the huge effort by financial institutions (aided by the Republican and Democratic presidencies during the 2008 recession) to mask their responsibility. It even got a bit literary: don't call it "corporate welfare", for instance, when banks are bailed out...call it, "stimulus", something positive.
To many liberals, the name Obama may come as a surprise in its inclusion, but, as Steglitz points out, Obama, for all the hope and change he talked about, largely left the recovery efforts in the hands of the same people who presided over it, merely "rearranging the deck chairs". The result was a near absolute catering to the financial institutions that caused the crisis, and a hypocritical austerity applied to home owners who were taken advantage of by these institutions predatory lending practices.
This is refreshing, particularly as the narrative of individualism drove the narrative that foreclosures represented personal failings on the part of those who experienced them. It's not radical to think that that financial institutions have a moral obligation to society, but it does seem a foreign concept; faith in free markets was eroding, Stiglitz points out, and in our current time, we still see its effects. It doesn't take a huge leap to conclude that lack of faith in institutions during the recession, the witnessing of huge amounts of money going to financial firms and little to citizens, could be the seed for being disenchanted with political systems writ large, fueling a desire for something (or someone) who proclaimed to be outside the system.
That is the wrong lesson, according the Stiglitz; instead of abandoning the idea of market capitalism, we should be looking for ways to intermix socialist ideas. He makes the wise case that if we can somehow manage corporate welfare, we can manage social welfare, and the latter will give us more innovation, allow people to take more risks, and improve the economy more.
In many ways, this book is about than the 2008 recession; it is about a way to define a future society. Economics drives so much of what a society it, what it values; and to really prevent recessions is really about redefining what we value, to use moments of crisis to redefine society in an age of automation, climate change, and globalization.
This book is required reading to be a fully informed citizen; it is a counter narrative than what many financial institutions want out there, which means it is doing the work a good book should, being a bit dangerous in an effort to change the world.
A+