by Jerry O’Driscoll
The following is a book review from the Cato Journal, Vol. 30, No. 3 (Fall 2010).
Jimmy Stewart Is Dead: Ending the World’s Ongoing Financial Plague with Limited Purpose Banking Laurence J. Kotlikoff (Hoboken, N.J.: John Wiley & Sons, 2010, 241 pp.)
Chapter 1 of the book is titled “It’s a Horrible Mess,” and in it Laurence Kotlikoff, a professor of economics at Boston University, reminds the reader of the breadth, depth, and horror of the global financial crisis. It is a cure for the dispassionate observer of events, an indictment that would send all but those with ice water in their veins to sign up for the Tea Party Express. The book is a particularly well-written account of the crisis that begins in housing finance, spreads throughout the financial system, and then throughout the real economy. The crisis hit in tsunami-like waves beginning in 2007 and continued into 2009.
In Kotlikoff’s words, “We thought we had well-functioning banking and insurance companies with competent directors, world-class managers, responsible regulators, and incorruptible rating companies. But overnight, we it learned it was a sham.” Continue reading