Firefighting: The Financial Crisis and Its Lessons (英语) 平装 – 2019年4月16日
“A primer on why the crisis was possible (and why, even so, almost nobody saw it coming); a ticktock on how the crisis and the financial rescue unfolded; and a very scary warning about the future.” —Paul Krugman, New York Times
“I'm glad I didn't have to do the job that these three ‘fire chiefs’ did. I learned much from this book I had not previously known. Its cautions for the future should be required reading for all policy makers.” —Warren Buffett
“A clear, concise account illustrating why financial fires must be anticipated if they’re to be controlled.” —Kirkus
“All kinds of readers will find [Firefighting] a readable summary of the crisis, but its paramount value comes from the authors’ explanations and defenses of their whatever-it-takes actions and assessment of current financial system risks.” —Library Journal, starred review
Ben Bernanke, currently a Distinguished Senior Fellow at the Brookings Institution, was the chairman of the Federal Reserve from 2006 to 2014. Timothy F. Geithner is currently President of Warburg Pincus and was the 75th Secretary of the Treasury for President Obama's first term. He is the author of Stress Test: Reflections on Financial Crises. Hank Paulson is the founder and chairman of the Paulson Institute, and served as the 74th Secretary of the Treasury under President Bush. He is the author of On the Brink and Dealing with China.
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Very unfortunately, the book provides very little in terms of analytic depth relating to why what happened did happen. The whole of this can be summed up in a single paragraph in the conclusion, on page 112. That is as follows:
“…the basic problems were too much risky leverage, too much runnable short-term financing, and the migration of too much risk to shadow banks where regulation was negligible and the Fed’s emergency safety net was inaccessible. There were also too many major firms that were too big and interconnected to fail without threatening the stability of the system, and the explosion of opaque mortgage-backed derivatives had turned the health of the of the housing market into a potential vector for panic. Meanwhile, America’s regulatory bureaucracy was fragmented and outdated, with no one responsible for monitoring and addressing systemic risks”.
All this was very obvious even 1-2 years after the crisis, never mind an entire decade after the event. And this is the great failure of the book. It does not take advantage of practically any of the very extensive research and literature that has covered the topic over the past some 8 years. Many of the little discussed, but important, factors that caused the crisis are not even mentioned, never mind seriously examined. For example, that much of the reserves of the insurance companies insuring many financial instruments were based on assets that were not solid in many cases (i.e., not much more solid than what they were intended to insure, such as CDOs being used as the basis of backing CDOs). That the ratings agencies did a very poor (and biased) job at rating sub-AAA rated instruments as AAA. In the late 1970s only a tiny share of private sector debt was rated as AAA by the ratings agencies. By the time of the crisis that had ballooned to a significant portion of debt. That the accounting firms and government regulators responsible for auditing and monitoring housing debt, especially sub-prime housing, were doing a very poor job at (i.e. witness the relatively large proportion of NINJA [and other fraudlent] loans in the mortgage market at the time). Etc., Etc., Etc. There has been extensive empirical research on these topics since the author’s three books were originally published yet this is utterly ignored in this book.
Naturally, considering the fact that the coverage of “why” is weak, it inevitably follows that the policy recommendations made by the three authors is also quite weak (and self-evident even some 8 or so years ago, never mind today). Also weak, in that it is so self-evident, are the author’s analysis of the economy in terms of its ability to fend off a future similar crisis. The authors point out that the currently prevailing low interest rates, high government debt and the results of the previous decade’s high level of “quantitative easing” have greatly reduced the ammunition available to fight any future crisis. This, however, is not exactly a revelation even to someone who has only had one or two macroeconomics classes. Plus they also leave unmentioned, as a factor further weakening the economy's ability to bounce back from any blows, the extremely important facts that there has been little debt deleveraging since the crisis and private sector debt (in particular corporate) is near its 2007-2008 levels.
In short, this book is really of value only to laymen who have not really read much on the topic. It would be of value to those who have not read any of the three previous books on the subject. However, even for that audience, there are other books that do a much better job at analyzing and discussing the crisis that were published 1-3 years after the crisis (i.e,., at around the same time as Paulson, Bernanky and Geithner's original books were published). Examples include Alan Blinder's "After the Music Stopped", Robini's "Crisis Economics" (one of the first major post-crisis books on the subject), Bethany McCLean's "All the Devils are here" (A book that John Authers, former editor-and-chief of the Financial Times, described as the best one volume book on the crises yet published) and John Auther's "The Fearful Rise of Markets: Global Bubbles, Synchronized Meltdowns, and How To Prevent Them in the Future". Also good are Schiller's "Irrational Exhuberance" and Reinhart and Rogoff's "This Time Is Different: Eight Centuries of Financial Folly". Even though the last two are not specifically about the 2008 crisis the lessons they contain relating to the historical causes of previous bubbles are extremely relevant. What is really needed, today, is a set of the above books updated to take into account all the research and literature produced over the past some eight years since they were published.
For the knowledgeable on macroeconomics and finance "Firefighting" would be of very little value, especially and shamefully in that it does not incorporate barely anything that has happened, in 8 years, since the publication of the authors’ three previous books. For that audience this book would rate as a one or, at most, two-star book.