Crashed – How a Decade of Financial Crises Changed the World

A decade on, there is a case for a reassessment of the financial crash of 2008 which first became evident in the US, together with its aftermath on a global scale. Apart from the risk of producing a work that is simultaneously both overly superficial by reason of being so wide-ranging, and too confusing when it comes to referring to complex investment procedures, there is the question of whether a book is directed narrowly as academics or intended to enlighten reasonably well-informed general readers. There are many examples of books which manage to straddle both stools, page turners backed up with impressive bibliographies. I have the impression that this is what “Crashed” is meant to be, but for me it does not succeed in this.

One problem here is that the book requires such a good grasp of economics, financial speculation and politics that anyone possessing it would be unlikely to need to read it in the first place. Adam Tooze makes a promising start, explaining mortgage-backed securities (dodgy if based on loans issued to buyers who may not be able to repay them) or the “repo” system” – a risky form of speculation involving paying for a purchase of securities by reselling them. However, in describing how the crisis developed not only in the States but also the UK and the Eurozone, the author gets on a roll of journalese and no longer troubles to explain obscure acronyms and jargon of the trade. If one is only grasping the gist of the argument, of which one was already aware, is there any point in continuing?

There are also too many distracting digressions such as at the outset in Chapter 1, where the author goes on about the “The Hamilton Project” commenced on Obama’s watch, without clearly stating what it was.

The book contains a number of interesting insights on, for instance, the role of China in financing rampant speculation with its bloated trade surplus, or on the economic and political role of Germany , but I found that digging these out of the verbiage was hard work.

I recommend finding more systematic and focused studies of this fascinating subject, before perhaps returning to this book, which is perhaps better dipped into for reference , or read with the selection of specific chapters of interest, forearmed, of course, with a proper understanding of the working of government bonds, exchange and interest rates and so on.

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