The Boom and the Bubble: The US in the World Economy [Paperback]

Robert Brenner (Author)

Book Description

Publication Date: October 2003

Brenner demonstrates that the new economy was always a fragile phenomenon.

A sustained period of significant growth in the US, however, seemed to save the day against all the odds. So impressive was the surface appearance of this rescue mission that all manner of commentators proclaimed—once again—that a 'new economy' or 'new paradigm' of unlimited and harmonious growth had been forged.

Today, as recession looms, the babble about Internet start-ups is exposed as vapid. Yet the pundits are no nearer an understanding of how or why the boom turned into a bubble, or why the bubble has burst. In this crisp and forensic book, Robert Brenner demonstrates that the boom was always a fragile phenomenon—buoyed up by absurd levels of debt and stock-market overvaluation—which never broke free from the fundamental malady of overcapacity and overproduction which continues to afflict the global economy.

Carefully dismantling the myths and hype that surround the US boom in terms of profitability, investment, and productivity, Brenner restores the properly international context to the process. He portrays the 'zero-sum' character of the American success, which presupposed the relative weakness of its main German and Japanese competitors: a strategy that has laid huge obstacles in the path of a 'soft landing' to end the current phase of growth.

A substantial new Postscript provides and up-to-date analysis of the Bush economic debacle – the crisis of manufacturing, the telecom bust, the record twin deficits, plummeting employment, and the real estate bubble.

Editorial Reviews

Review

In this interesting and original work, Brenner examines the recent collapse of the US economy ... not merely another postmortem on the bursting of the bubble economy of the last decade. Rather, Brenner provides a historical and international context to his discussion by framing it within the global economic stagnation of the early 1990s. (Choice )

Paul Krugman and Joseph Stiglitz may be celebrity economists, but it is an economic historian whose earlier work focused on the origins of capitalism in late feudal Europe who has turned out the most compelling and comprehensive account of the crisis gripping contemporary global capitalism. UCLA Professor Robert Brenner's recent work is a solidly argued and empirically impeccable restatement of the centrality of overproduction in capitalism. (Walden Bello - The Nation )

An uncanny ability to map the future ... His conviction that the financial bubble that sustained the US economy around the turn of the century would be exposed as corrupt as well as misguided has now been proved right. (Charles Leadbetter - New Statesman )

The best financial history of the period yet. (New York Times )

... as the economy continues to plummet from its historic highs in the '90s ... here's a book which explains in accessible ways why it has gone so fast and why it seems to be coming down so quickly. (Steve Wasserman )

Its implications are portentous. (Jack Beatty - Atlantic Monthly )

Brenner offers a more scholarly analysis of the recent decade than most commentators who tend to overpraise or dismiss recent technological innovations ... something of a thriller with a to-be-continued ending. (James Flanigan - Los Angeles Times Cover Review )

About the Author

Robert Brenner is Director of the Center for Social Theory and Comparative History at UCLA. He is the author of The Boom and the Bubble, Merchants and Revolution, The Economics of Global Turbulence and co-editor of Rebel Rank and File.

Product Details

• Paperback: 318 pages
• Publisher: Verso (October 2003)
• Language: English
• ISBN-10: 1859844839
• ISBN-13: 978-1859844830
• Product Dimensions: 7.9 x 5.7 x 0.9 inches
• Shipping Weight: 1 pounds (View shipping rates and policies)
• Average Customer Review: 4.5 out of 5 stars  See all reviews (6 customer reviews)
• Amazon Best Sellers Rank: #638,143 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

18 of 18 people found the following review helpful:

5.0 out of 5 stars Providing Perspective, May 7, 2004

By 

Douglas Doepke (Claremont, CA United States) - See all my reviews
(REAL NAME)   

This review is from: The Boom and the Bubble: The US in the World Economy (Paperback)

Picking up a book about economics is often like checking in with an accountant: it's no fun, but it may save trouble later on. Fortunately, Brenner's is a rewarding call to make. The text is accessible to the non-professional as well as the professional, although a familiarity with market fundamentals such as exchange rates, balance of payments, and other tools of the trade, is assumed. From the text, I gathered two key points that I believe can be capsulized. First, the so-called New Economy, touted by many stock market cheerleaders, was built on little more than old-fashioned market speculation plus timely intervention by central banker Greenspan. Moreover, the process was doomed once the disconnect between share prices and profit rates became too great, as it eventually did. Against this background, extravagant projections of New Economy iconoclasts like Newt Gingrich (Brenner himself names no names) should be measured, along with a stern warning for the future. Second, are two deeper, more ominous developments: namely, international overcapacity and falling profit rates, twin trends that have plagued industrial economies since the early 1970's. Against this backdrop, which Brenner also charts, longer-term prospects should be measured, even as international bankers tinker with short-term, burden-shifting measures like exchange rates. And though Brenner acknowledges the anodyne impact of military spending, he draws no conclusions about its future amidst a sagging GDP.Yes, the book is heavy with graphs, nonertheless the author can't be expected to substantiate his case without strong evidence. Moreover, Brenner's refreshing approach places the New Economy in a broader-than-usual context that furnishes the reader with an informed historical perspective. In most every respect, this is a check-in call worth making.

19 of 20 people found the following review helpful:

4.0 out of 5 stars Refreshing views, but a bit overwelming by details, July 31, 2002

By 

"toralfsando" - See all my reviews

This review is from: The Boom and the Bubble: The US in the World Economy (Hardcover)

The book gives good insight in US economic and financial development during the 1990-ies. Brenner argues well for his criticism of the uniqueness of the so called New Economy, of which he must be regarded as a great disbeliever. It is also refreshing to read a well documented criticism of US monetary policy under Fed Chairman Alan Greenspan, whom Brenner sees as a player with heavy responsibility of the unprecedented inflation of US equity prices in the last half of the 1990-ies. Unfortunately Brenner's prose is rather dry and his text is accompanied by a high density of numbers. This documents his arguments well but demands great patience from the lay reader.
The book went to the press in mid 2001 which naturally leaves out the market turbulence July 2002. Nevertheless his analysis gives the patient reader a solid background for understanding the recent developments in US financial markets. And what may be in store...

17 of 18 people found the following review helpful:

5.0 out of 5 stars Apocalpyse Now, November 18, 2002

By 

tamiii "tamiii" (San Juan Capistrano, Ca. United States) - See all my reviews

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This review is from: The Boom and the Bubble: The US in the World Economy (Hardcover)

Contrary to one reviewer, I found this book truly engrossing. Brenner powerfully summarizes how the rate of profit of world manufacturing fell (with its many implications). To rectify this problem, Greenspan made borrowing easier. As an aside, he notes how CEO's then used their corporations to borrow and buy the very stocks on which their options were based, thereby enriching themselves in a speculative frenzy. However, this is hardly the story: Brenner's analysis explains the crushing attacks on social spending as well as our current war drive--suggesting how this too will fail, leaving only the historic capitalist method for eliminating overcapacity, the elimination of enterprises by economic crisis.