In 2017, then Chairman of the Federal Reserve Board Janet “Inflation Is Transitory” Yellen hinted there would not be another financial crisis “in our lifetimes.”
Maybe she got the idea from Morgan Stanley boss James Gorman, who in 2013 put the chance of a crisis “in our lifetime” as “close to zero” as he could imagine. Well, imagination, as the song says, is crazy. “Your whole perspective gets hazy.”
These two experts, as Alex J Pollock and Howard B Adler tell us in Surprised Again! The Covid Crisis and the New Market Bubble, are far from alone. Economic experts, they confirm, have a collective accuracy that would embarrass a busload of blind golfers. Not one expert, they remind us, saw the Great Depression coming. And none foresaw the Calamitous Coronadoom Panic of 2020. Which lasted until now.
And will last how much longer?
What fascinates is that being wrong in no way dents the awesome armor of assurance experts don. Whatever they do when given power, they do boldly, and without doubt. Whether this lack of humility is caused by amnesia or hubris can be debated. What can’t are the astonishing effects of the economic “solutions” foisted upon us by a string of experts during the panic, each trying to correct the ill effects of the other “solutions”.
Pollock and Adler take us through it all. From the lockdowns to the Fed printing money with glee to the resultant market swings to the rush and retreat from cryptocurrencies to the run in the housing market to crushing municipal debt and its ill effects on pension funds to student loans and all back again to the banks and the Fed.
This book serves as excellent introduction to modern economics and monetary policy, presenting it cleaner than in any textbook, and with a complete absence of pedantry. Theory is backed by observation in a wonderful Appendix (my favorite part) where the reader can write down a handful of indices at the time of reading, and compare them with history and with the authors’ predictions.
Primarily, this is a book in which we re-learn the ancient truth that much of what we have learned will be forgotten in the next crisis. One perennially lost lesson, even though it’s been verified by history time and again, is that panic kills. In the literal and figurative sense. This is not a book about public health, though. Pollock and Adler accept medical “solutions” as a given, and only question economic “solutions”.
Buy my new book and learn to argue against the regime: Everything You Believe Is Wrong.
Categories: Book review