A straightforward, conservative history of economic crises in America.
In this well-written and informative debut, Hafele pulls no punches—recessions, depressions and economic downturns are murder on people and businesses alike. Yet the author remains an optimist, sure that economic ups and downs are part and parcel of capitalism, which he ultimately defends mightily. His argument is unabashedly conservative. He believes that higher taxes mean higher unemployment, and he’s not a fan of regulation. On the economic policies of Presidents Hoover and Roosevelt during the Great Depression, he writes, “The creation of rules regarding quotas, wages, hours worked, etcetera applied to most everyone, and resulted in a caging of the animal spirits.” This one-sided view may alienate some readers, although it’s difficult to argue that Hafele doesn’t know what he’s talking about. His knowledge of economic history is extensive and clearly presented, and he does a fine job of using other countries’ economic histories to help illuminate America’s. At times, however, he slips, using language and images that convey an old-fashioned sensibility at odds with the book’s primary focus, which is the financial crisis of 2007 to 2009. For instance, when discussing the “decline in the underwriting standards for residential housing,” he writes, “I grew up with the rule that you saved 20% of the purchase price before buying the starter home, as well as the wife’s dream home”—a personal notion that may be true but rings funny at a time when more single women than single men purchase houses. He can be slightly insensitive at times, too, referring to this issue as “The Burger King Guy Syndrome”—that is, “houses-for-all-including-the-drive-thru-attendant-at-BK-way.” Nevertheless, Hafele offers a comprehensive study, one that shows rather convincingly the cycles involved in economic crises. His analysis on the latest recession is not particularly illuminating, though it is solid and well-argued. His writing is clear, accessible and erudite, and readers will learn from the book even if they don’t always agree with it.
A clear, readable account of economic cycles past and present.