A Brief Review of Econned
I have read the first few chapters of Econned by Yves Smith, that’s about where I re-evaluate and decide whether its worth reading through the first 80% of the book. When the answer is yes, I usually re-evaluate the 80% mark. As a result, I don’t always get all the way through a lot of books I pick up. Time is a valuable commodity.
Anyway, I’ve gotten far enough to decide that not only is it worth going forward, I will be finishing this one. I also believe I’ve gone far enough to know this book is worth recommending if you’re looking at a book to tell you about the causes of the Great Recession. What I’ve seen so far – Smith covers a lot of ground that is well trodden, but she does it well, and smoothly, entertainingly, and she connects the dots. Its fairly clear that a) the models of the world that much of the economics profession had were wrong (and here Smith pulls no punches – Paul Krugman, an ideological ally, is one of many targets) and b) many (most?) economists simply refuse to give up on models even if they don’t conform at all to the facts.
Now, its impossible to avoid discussion of the people involved in making the meltdown process happen, and little bits of gossip are what make a book readable. But unlike other books about the Great Recession I’ve picked up recently, such as David Wessel’s In Fed We Trust, Charles Gasparino’s The Sellout, and Andrew Ross Sorkin’s Too Big to Fail, the book is more about the ideas than the people, and more about what’s wrong with bad models or CDSs than the people peddling them. If you think knowing which big player puked on the way to which boardroom while Bear Stearns was imploding, or where a given CEO summered in 2008, this is probably not the book for you. If you want a good idea of what happened to get us to the period from 2007 to 2009, this book will help you understand.
In that regard, its like Barry Ritholtz’ Bailout Nation, another book worth reading. The difference is, Ritholtz’ language is a bit more colorful, and Bailout Nation is the story of a bunch of crooks and idiots and idiot-crooks run wild. Smith’s focus is more on the BS that pervades the economic profession that aided and abetted Ritholtz’ bunch of crooks and idiots and idiot-crooks run wild. The two books complement each other very nicely.