![]() ![]() ![]() ![]() A first read brings no major surprises: Posner provides a thorough account of how the United States, in preferring speculation to savings, inflated the real-estate bubble, and of how the bubble’s burst imperiled the entire financial system-leading Posner to call it a depression instead of a recession. To grasp the depth of Posner’s arguments, I suggest reading the book twice-and that won’t be a hardship, since it is relatively short, fluently written, and devoid of jargon and mathematical formulae. Posner, however, goes much deeper: his book offers a sophisticated explanation of what he sees as an approaching, if unacknowledged, depression-one that will last for some years and deeply threaten our society. Former Federal Reserve chairman Alan Greenspan became a member of this group after publicly admitting some months back that he had overrated the financial markets’ capacity to self-regulate. Posner has joined the still-modest number of scholars who try to understand their mistakes without jettisoning their entire system of beliefs. ![]() Capitalism, writes Posner, should be not rejected but repaired. Actually, it is closer to healthy self-criticism. A Failure of Capitalism: The Crisis of ’08 and the Descent into Depression, by Richard Posner (Harvard University Press, 368 pp., $23.95)Ĭoming from a leading free-marketer, Richard Posner’s new book may look at first glance like a confession of intellectual defeat. ![]()
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