- Paperback: 520 pages
- Publisher: Oxford University Press; Reprint edition (October 1, 2016)
- Language: English
- ISBN-10: 0190621079
- ISBN-13: 978-0190621070
- Product Dimensions: 9.2 x 1.6 x 6.1 inches
- Shipping Weight: 1 pounds (View shipping rates and policies)
- Average Customer Review: 4.3 out of 5 stars See all reviews (58 customer reviews)
- Amazon Best Sellers Rank: #576,989 in Books (See Top 100 in Books)
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Hall of Mirrors: The Great Depression, the Great Recession, and the Uses-and Misuses-of History Reprint Edition
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"This important book and the ideas behind it are already entering the public policy sphere at the highest level."--2016 Alice Jones Prize Award Presentation
"Barry Eichengreen's Hall of Mirrors: The Great Depression, the Great Recession,
and the Uses - and Misuses - of History stands in contrast to contemporary mainstream economics by pointing out how much we can learn from history when attempting to understand the contemporary economic world."--Mediterranean Studies
"The Great Depression was the signal economic event of the 20th century and, we hope, the Great Recession will be the signal event of the 21st. Few people on earth can draw out the similarities and differences as well as Barry Eichengreen, who paints with equal facility in broad strokes and in fascinating detail. Reading Hall of Mirrors is a joy. Keeping it on your bookshelf for future reference is a necessity."--Alan Blinder, author of After the Music Stopped
"Historical analogies come cheap, but historical insight relevant to today is both rare and valuable. Barry Eichengreen's Hall of Mirrors is packed with the essential insights that give the reader understanding of the macro policy mistakes of the 1930s and the 2000s, both why they occurred and how devastating they were. A must-read." --Adam S. Posen, President, Peterson Institute for International Economics
"Much of modern economics has ignored the study of economic history. Barry Eichengreen's Hall of Mirrors shows why that is a huge mistake. Combining fascinating narrative detail with cogent analysis of the relevant theory, it illuminates crucial parallels and differences between the causes of and policy response to the Great Depression and the Great Recession. It illustrates how good historical analysis must inform current policy choices, but also how superficial historic analogy can lead us astray. It carries powerful implications for the policies still needed to drive continued recovery from the Great Recession, and to stop us repeating in future the mistakes which led to disaster in the past." --Adair Turner, Senior Fellow, Institute for New Economic Thinking
"Eichengreen the economist joined forces with Eichengreen the historian to produce a truly unique book that revisits the past in the light of current discussions and examines present issues in the light of past experience. Eichengreen demonstrates forcefully how important-but also how difficult-it is to learn from history. A must-read for all students of the global crisis but also for everyone interested in understanding why experience is no guarantee against policy errors." --Jean Pisani-Ferry, Professor, Hertie School of Governance (Berlin) and Commissioner-General for Policy Planning (Paris)
"A powerful plus ça change vibe courses through [Eichengreen's] comparison, as he discusses each era's major players and events--e.g., the grifters (Charles Ponzi vs. Bernie Madoff), the reparative legislation (Glass-Steagall Act vs. Dodd-Frank), the economic advisers (FDR's brains trust vs. Obama's team), the institutional collapses (Union Guardian Trust vs. Lehman Brothers) the bubbles (the Florida land boom vs. the subprime mortgage loans), the panicked electorate and the nervous politicians. Eichengreen leavens his wide-angle treatment of complex issues-he devotes almost equal time to economic developments in Europe during each era--with capsule portraits of the major players, with becoming modesty about his own assessments (notwithstanding his obvious intellect) and even with occasional humor." -- Kirkus Reviews
"[A] rollicking, villain-rich story contrasting then and now." -- The Atlantic
"Hall of Mirrors is destined to change the way we think about both the Great Depression and the Great Recession. Commentators and scholars will debate its thesis for many years to come." -- Financial Times
"[S]urvey-like in breadth . . . a worthy, and distinctive, addition to the literature on the crash." -- Wall Street Journal
"A very good book" --Paul Krugman, New York Times
"Excellent" --John Authers, Financial Times
"Mr Eichengreen recreates the last century's two great episodes of financial instability with compelling portraits of bankers and policymakers and accessible theoretical explanations . . . his version of the 1930s is rich with detail and myth-busting insights." -- The Economist
"Hall of Mirrors's review of economic policy in stressful times is a well-organized and entertaining narrative of data, personalities and anecdotes." -- Commentary
"Of the scores of books that have examined aspects of this never-ending crisis, none may be better than Barry Eichengreen's Hall of Mirrors. Eichengreen is one of the most prolific economic historians writing today. He is also among the most astute. The author of books on the gold standard, European unification, and the international monetary system, Eichengreen approaches his subject from a thoroughly international perspective, detailing how the crisis spread and showing how containment efforts stumbled on the mismatch between a highly integrated global financial system and a regulatory system dominated by national political concerns." -- Strategy + Business
"Hall of Mirrors is written in the past tense, for much of what it discusses is before today. But it is really a present tense book, for the resolution of the 2008 crisis is not done, just postponed. Credit pyramids are ever more imaginative, ever taller. The remaining dilemma is just this: Can commercial banks and investment banks, bank regulators and central bankers be trusted when the rewards for skirting the rules - the massive bonuses, the revolving doors between central and commercial banks, and the guarantee of bailouts by government - are so handsome? Eichengreen's answer is no. That is the implicit point in Hall of Mirrors, which shows with analytical force and elegant prose that the financial systems of the U.S. and other countries remain skewed to protect those who take from the many to reward the few." -- Financial Post
"Barry Eichengreen is an ideal scholar to reflect upon both crises, together and separately . . . On equally firm footing discussing events in Europe and the United States and ranging effortlessly, expertly, and impressively across decades and continents, Hall of Mirrors earns a prominent place among the first rank of the many books that have been written in the wake of the global financial crisis of 2007-2008 . . . Hall of Mirrors works through the current crisis with dexterity and acumen. If anything, the book is more riveting, and even more convincing, when engaging the current crisis." -- Los Angeles Review of Books
"This fine book -- a fascinating read for the historically-minded -- reviews in detail the story of the Great Depression and its remarkable parallels with the crises of the last decade . . . Eichengreen ingeniously interweaves the two episodes, rather than treating them separately, making manifest the similarities and differences, both in market developments and in official reactions." -- Foreign Affairs
"[B]rilliantly conceived, and written, as a dual-track account. It is full of wit, and wisdom of course . . . The book is replete with masterstrokes . . . The Introduction and the Conclusion should be bound together and dropped from airplanes on European capitals." -- International Affairs
"Both the breadth and depth of Eichengreen's research are impressive. Whether it is the house bubble in Florida in the 1920s or in Spain in the 2000s, the gold standard in the 1930s or the euro in the 2010s, not a single relevant story is left out." -- International Affairs
"Eichengreen moves with assurance and elan through a century of US and European economic history to show the delusions of which humans are capable (and the power of finance capital lobbying) as they convince themselves that this time it really will be different." --Roger Middleton, Economic History Review
About the Author
Barry Eichengreen is Professor of Economics and Political Science at the University of California, Berkeley. His previous books include Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System and Golden Fetters: The Gold Standard and the Great Depression, 1919-1939.
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Top Customer Reviews
I have read many other books and articles about the Great Depression and the Great Recession, but I nevertheless found much that was new and illuminating in Eichengreen's treatment here. I've recently re-read his earlier Golden Fetters: The Gold Standard and the Great Depression, 1919-1939 (Nber Series on Long-Term Factors in Economic Development) which I feel is the best single stand-alone economic analysis of the Great Depression. (No, I'm not a committed true believer in "real business cycle" theories, or in liquidationism for that matter; if you are you probably won't like this book very well.) I'm not about to throw away my copy of Golden Fetters, which goes more deeply into some important details, but if you can only read one book on either the Great Depression or the Great Recession then Hall of Mirrors is the choice.
The great strength of the book lies in Eichengreen's masterful use of the comparative method of analysis, for he shows that considering both cycles in the same frame yields insights not to be gained from examining either alone. His method permits him to explain many features of each that would otherwise be quite puzzling.
Eichengreen is an economic historian rather than a theorist. There isn't an equation in the book; he has deliberately avoided abstract theorizing both to appeal to a broader audience and to assure a more complete and comprehensive perspective. I have no doubt that what he is saying will stimulate both theoretical and econometric work, some perhaps from his own pen. But this is the right place to start.
Early in the book, on page 9, Eichengreen says, "Where Keynes relied mainly on narrative methods, his followers used mathematics to verify their intuitions. Eventually those mathematics took on a life of their own. Latter-day academics embraced models of representative, rational, forward-looking agents in part for their tractability, in part for their elegance. In models of rational agents efficiently maximizing everything, little can go wrong unless government makes it go wrong." Which is a polite way of saying that economists of this stripe take "government" as a word of art, referring not to any actual institution but to the sum of "irrational" forces that they cannot model, or choose not to. If you are one such I suggest not reading this book, which will only bewilder and annoy you.
But if you are genuinely interested in understanding the Great Depression and Great Recession and have no fixed preconceived notions then I thoroughly recommend this book.
The analogues between the 1920’s and 30’s with the 2000’s are many. Here are only a few highlighted by Eichengreen:
• Bernie Madoff was the equivalent of Charles Ponzi.
• The Euro of today works the way the gold standard of the 20’s worked.
• The bailout of the Dawes Bank (Central Republic Trust) was similar to the Bear Stearns bailout.
• Letting Lehman fail was analogous to the moral hazard issue associated with allowing the Ford controlled Guardian Group of Banks to fail in 1933.
• There were real estate booms in both eras.
The lessons our modern day policy makers learned were to flood the system with liquidity, bailout the banks, engage in fiscal stimulus policies, avoid protectionism and avoid debacles like the London Economic Conference of 1933 through international cooperation. However, unlike the 1930s the problem in the system was not really in the banks, but rather in the shadow banking system that grew up in the 1990’s and reached full adulthood in the 2000’s.
Perhaps more important instead of four years of grinding lower in the 1930’s the economy began to recover after two years and most governments and central banks began to pull back on stimulus policies which in Eichengreen’s opinion is the reason for the slow growth the global economy has experienced since 2010. Further by preventing another Great Depression the impetus to fully reform the financial system waned and we ended up with a watered down version of financial reform with Dodd-Frank. Eichengreen is a reformer in the Polanyi tradition. Unfortunately as Keynes contemporaneously noted reform is the enemy of recovery. Reform took place in the 1930’s because the old order collapsed, but as many have noted the New Deal reforms delayed recovery. Even Eichengreen concedes that National Industrial Recovery Act of 1933 was an economic disaster.
In reading Eichengreen’s book one has to sympathize with the policy makers of the early Great Depression. They were operating in real time with inadequate information, much as Bernanke et al were doing in 2008. Eichengreen is sympathetic to New York Fed President George Harrison’s “direct pressure” approach to the stock market boom which he characterizes as an early version of “macro-prudential” policies. Unfortunately “macro-prudential” policies have yet to be tested and I suspect they might have failed in the 2000’s in halting the sup-prime mortgage boom. Why? The policy makers would have been accused of racism by preventing Blacks and Latinos from buying homes.
I have a few factual quibbles with the book. He understates the role of Hoover Treasury Secretary Ogden Mills in being the true author of Roosevelt’s early banking reforms; he fails to note the importance of the fiscal drag or tax on labor, depending on your point of view, of the introduction of Social Security taxes in 1936 without benefits being paid out until 1939. Remember at the time social security was not included in the federal budget. Lastly he sometimes confuses being long a credit default swap with being short the swap.
All told Eichengreen has written an excellent book, especially The Great Depression portion. However, because it is probably too long and towards the end he pontificates too much on the Europe of the past years, which is too recent for real history, I give the book four stars not five.