If you want a great explanation about how everything fell apart over the past decade and how we’ll still be struggling to recover over the next decade, get yourself a copy of this book: “Lost Decades: The Making of America’s Debt Crisis and the Long Recovery” by Menzie Chinn (now a professor at U. of Wisconsin and co-author of the amazing Econbrowser blog, then one of my colleagues at the Council of Economic Advisers at the end of the Clinton Administration and first months of the Bush Administration) and Jeffry Frieden (a political scientist at Harvard). I find this account absolutely riveting; even though I already knew a lot of the main plot, I’ve learned a lot more about the underlying subplots and the most significant (good and evil, smart and foolish) characters. And coming from Menzie, the whole real-life story has this wonderful, reflective, melancholy “insider” perspective. I read it as screaming “I told you so.”
The last chapter is called “What Is to Be Done.” If those taking part in the outrage of the “Occupy___” movement want to bring some heavy artillery in terms of policy substance into their demands, this is a good place to start.
If you’re in the DC area, both of the authors will be talking about their book at the IMF tomorrow (Friday) afternoon, and I’ll be one of the discussants. Nobel laureate George Akerlof is moderating. (Not bad, huh?!) RSVP to attend the (free) event here.