A blinkered look back on financial disaster

Book review: After the Music StoppedDespite some notable ommissions, 'After the music stopped' is an informative guide to the causes of the financial crisis, says Matthew Partridge.


By Alan S Binder

Published by Penguin Press

"Nobody loves bail-outs", writes Roger Lowenstein in The New Republic. However, After the Music Stopped, an account of the financial crisis written by former Federal Reserve official Alan Blinder, contends that "the contagion of dysfunctional markets and economic collapse was far worse than the various cures administered by Washington". He even goes so far as to say that the government's failure to save Lehman Brothers was a "tragic missed opportunity to prevent the crisis from worsening".

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Indeed, as Matthew Bishop notes in The New York Times, the Fed's biggest mistake according to Blinder lay not with its policies, but in its failure "to learn the importance of communicating clearly with the public". So while both the George Bush and Barack Obama administrations did a decent job of stopping the economy from falling into depression, and "helping it gingerly back onto its feet", they received little public support. This in turn hindered growth.

Blinder's views have not gone unchallenged. "He minimises the role of the government in creating the crisis, omitting important facts that contradict his argument," says David Henderson in The Wall Street Journal.

For example, Blinder downplays the role of the government-sponsored agencies Fannie Mae and Freddie Mac in creating the housing bubble, and the role of bank deposit insurance in increasing moral hazard. "With his faith in government intervention, Mr Blinder sees the corners but not the craters".

And given the author's pedigree, it adds surprisingly little that's new disappointing given that, as Steven Pearlstein notes in The Washington Post, "my shelves already groan under the weight of fine books [on the crisis] by journalists and other economists".

While Blinder's book creates an "accessible narrative" out of earlier reporting, it "doesn't break much new ground." Yet it is still a good read.

"Blinder's strength is in his patient and clear explication," argues Pearlstein. "For a reader wondering how we got here, Blinder's book gives us an invaluable insight", agrees Lowenstein. Even Henderson concedes that "it is one of the best books yet about the financial crisis".

After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead, by Alan S Binder. Published by Penguin Press, £19.63.


By Rory CarrollPublished by Canongate Books

Irish journalist Rory Carroll's Comandante "is as severe, yet as tenderly written an indictment of [Hugo] Chvez as any we are likely to come across, at least in the English language", writes Julia Sewig in the Financial Times.

It details "the bluster, the provocations, the nationalisations and the executive power grab", and exposes the late Venezuelan leader's "economic mismanagement and a creeping authoritarian streak". Yet Carroll also "has enormous respect for Chvez: the politician, warrior, Machiavellian, strategist, actor, reader, wordsmith and, in Gabriel Garca Mrquez's description, illusionist'".

The obvious key to Chavez's power, says The Independent's Oliver Balch, was high oil prices, which allowed him to "throw money at Venezuela's intractable social problems". Yet he also ensured he "sucked up all the oxygen".

The Bolivarian Revolution was allowed "one hero and one hero only". This personality cult had a hugely detrimental effect on the day-to-day running of Venezuela, notes Dorothy Kronick in The New Republic.

"Chvez was a terrible boss, radiating administrative chaos". His paranoid streak "encouraged eavesdropping and backstabbing", in a government "consumed by perpetual tumult".

In all, Carroll goes "a long way to explaining this leader-seducer", writes Marie Arana in The Washington Post. "Here is a lively portrait of a new Latin American genus: the democratically elected caudillo".

Comandante: Inside the Revolutionary Court of Hugo Chvez, by Rory Carroll. Published by Canongate Books (£20).


By Evgeny MorozovPublished by Allen Lane

"Some books persuade you less with the force of their ideas than with the beguiling quality of their writing", notes Tom Chivers in The Daily Telegraph. "Evgeny Morozov's To Save Everything, Click Here is not one of those books".

The "cocky, aggressive" author makes two main claims. Firstly, that the internet is not as revolutionary as its supporters believe it's amazing, but "amazing like a dishwasher is amazing". And secondly, that our hunger for more and more "big data" is dangerous.

Morozov gives interesting examples of "the folly of what he calls technological solutionism'", says Hiawatha Bray of the Boston Globe.

Take "data-driven crime-fighting". Software that uses statistical analysis to decide which convicts are most likely to commit further crimes has been tested in some communities, with the analyses used to decide who gets released on probation. But "what's to prevent programmers from building in subtle racial or economic biases", buried in complex algorithms?

Morozov sometimes "wears his learning much too heavily", says James Harkin in the FT. But overall, the book is a sharp reminder that unless we "know what we want to achieve and what we want big data to do", it "will remain a showy buzzword".

To Save Everything, Click Here: Technology, Solutionism, and the Urge to Fix Problems That Don't Exist, by Evgeny Morozov. Published by Allen Lane, £20.

Dr Matthew Partridge

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri