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After the Music Stopped.

The Financial Crisis, the Response, and the Work Ahead

By Alan S. Blinder

One of America's foremost economists, Princeton University Professor Alan S. Blinder, previously served as Vice Chairman of the Federal Reserve Board and as a member of President Clinton's Council of Economic Advisers. He contributes regularly to the Wall Street Journal.

THE TOPIC: Greed and laissez-faire policies fueled the recent U.S. economic crisis, contends Blinder. For nearly a decade, slipshod lending practices encouraged consumers to buy houses they couldn't afford, and banks reaped dazzling profits by repackaging those loans into lucrative securities. In 2007, a perfect storm of mortgage defaults, misleading credit ratings on mortgage-backed investments, and executive compensation structures that rewarded investment firm employees for taking big risks threatened to bring down the financial services industry. Alarmed by the federal government's initially insufficient response, individual investors aggravated the situation further by withdrawing their money from Wall Street en masse. Through massive (if somewhat belated) federal bailouts and stimulus packages, Blinder argues, the government narrowly averted another Great Depression, and, he reasons, increased regulation should safeguard the economy in the future.

Penguin Press. 496 pages. $29.95. ISBN: 9781594205309

Cleveland Plain Dealer ****

"Alan S. Blinder's book, After the Music Stopped, helps make sense of [the] financial collapse. ... [It] is a prodigiously detailed yet generally accessible investigation of the roots of the meltdown, its multiple and continuing reverberations in the United States and globally, and the short-term fixes and long-term remedies required to treat, and then heal, the patient." EARL PIKE

Los Angeles Times ****

"In After the Music Stopped, Blinder runs into the same problem the government faced when trying to explain what was going on in the panicky days of 2008: the financial system has become so complicated and technical that it takes a whole lot of work to understand exactly how we got into this mess. ... Of course, the simpler parts of Blinder's book are useful for anyone who wants to sound reasonably intelligent about the crisis." ALANA SEMUELS

USA Today ****

"Blinder is no defender of his economist colleagues or other former and current insiders who caused so much damage--or, at minimum, failed to see the collapse on the horizon. He writes clearly--as well as lots of journalists. That combination makes the book a worthy addition to the literature." STEVE WEINBERG

Wall Street Journal ****

"It is one of the best books yet about the financial crisis. ... Unfortunately, [Blinder] ... makes judgments on controversial issues that he does not see as (or concede to be) controversial. He also minimizes the role of the government in creating the crisis, omitting important facts that contradict his argument." DAVID R. HENDERSON

Washington Post ***

"While After the Music Stopped serves a useful purpose of synthesizing that earlier reporting into an accessible narrative, [Blinder] doesn't break much new ground. ... My biggest complaint, however, is that Blinder fails to place the credit bubble in the context of the massive global-trade imbalances of the past two decades." STEVEN PEARLSTEIN

CRITICAL SUMMARY

Hailed as "one of the best books yet about the financial crisis" (Wall Street Journal), After the Music Stopped sweeps aside myth and misunderstanding to present a shrewd, richly detailed, and accessible account of the events leading up to and the aftermath of the economic collapse. Reviewers applauded Blinder's assured prose, storytelling skills, and clear, comprehensible explanations of complex concepts. However, a few of them, admittedly influenced by their own political views, took issue with some of Blinder's interpretations and his deep-seated belief in the government's ability to solve the nation's ongoing problems. The Washington Post also complained of an overlong and cliche-ridden narrative. Readers may not agree with all of Blinder's opinions, but they won't find a better guide for understanding today's messy economy.
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Title Annotation:After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead
Author:Blinder, Alan S.
Publication:Bookmarks
Article Type:Book review
Date:Mar 1, 2013
Words:621
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