Copyright American Library Association, used with permission.
This work by the former chair of the Federal Reserve is disappointing. This reviewer is struck by Greenspan's questionable economic analysis and disappointed by his apparent return to his Ayn Randian origins. How else can one explain Greenspan's exposition that since national saving must equal investment (true by definition ex post), and since investment drives economic growth (no argument there), then progress can come only by supporting those who contribute most to national saving? Since the upper-income classes save the most, Greenspan implies that taxes on the affluent should be eased at the expense of reducing the consumption of the less wealthy. Greenspan simultaneously argues for reducing the scope of government, especially in entitlements--think various programs to support the poor. Greenspan does support some government interventions, such as actions taken to avert a global financial meltdown in 2008, but offers no guidance as to when such involvement is appropriate. His call for introducing behavioral assumptions into forecasting, which appears to be the book's aim, is hardly novel and provides no real road map for improving economic forecasting. Readers would be far better served by reading the revised 2008 edition of Greenspan's The Age of Turbulence. Recommended only because of the author's prominence. Summing Up: Recommended. Public, academic, and professional collections. J. Prager New York University
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In his new book, Greenspan (former Federal Reserve chair, 1987-2006; The Age of Turbulence) expresses dismay at not predicting the 2008 recession and offers suggestions for improving economic forecasting and revising government financial interventions and regulations to prevent future economic chaos. In the realm of predictions, he devotes a chapter to the field of behavioral economics, which finds foreseeable patterns to humans' economic irrationality. As a conservative, Greenspan decries government expenditures on companies deemed "too big to fail," seeing their rescue as a slippery slope to favoritism and state ownership. Likewise, he portrays Social Security and other benefit programs as encouraging dependency on government, discouraging appropriate levels of domestic savings, and redistributing wealth from capital investment to consumption. However, he does come to see that some regulation is required, suggesting that banks be held to below the "too big to fail" size, or that they be obliged to maintain adequate capital buffers. Although Greenspan occasionally does not cite his exact source, most of his arguments are illustrated with exhibits, charts, and data tables, many of which appear in appendixes to keep the text readable. Verdict This book will attract readers because of the author, but it covers little new ground for those familiar with conservative perspectives.-Heidi Senior, Univ. of Portland Lib., OR (c) Copyright 2014. Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.
From Booklist, Copyright © American Library Association. Used with permission.
Greenspan, Federal Reserve Bank chairman from 1987 to 2006, investigates the financial crisis of 2008 with a focus on economic forecasting, and he sets out to understand how we got it wrong and what we can learn from our mistakes. The author determines there is something more systematic about the way people behave irrationally, especially during economic crises, and this behavior can be measured and incorporated into economic forecasting and setting economic policy. Greenspan's considerations include behavioral imperatives (fear, optimism, etc.) and their role in rational economic behavior and market outcomes; bubbles and their differences; and the roots of the crisis in securitized U.S. subprime mortgages. He identifies too big to fail as the most problematic trend from the recent financial debacle and strongly supports modern industrial capitalism, although he notes its inherent creative destruction in a system of winners and losers that imposes hardship on workers who lose jobs and homes. This challenging, thought-provoking book sheds an important perspective on events that triggered possibly the greatest financial crisis ever.--Whaley, Mary Copyright 2010 Booklist