Alan Blinder’s “After the Music Stopped”…. Chapter 1

For my Macroeconomics class I assigned Alan Blinder’s After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead.  I’ll be reviewing the book chapter by chapter in the coming weeks.

The very first paragraph of the first chapter mixes metaphors. First the economy has been run over by a truck, then at the end it has been mugged.  Was that a deliberate stylistic decision?  By mixing metaphors does an author signal: “This book is for popular audiences.”  Seems to me that when you want to make berry jam, you should not throw the baby out with the bathwater.

The super-short version of the financial crisis that Blinder offers right up front tries to be different by emphasizing the “bond bubble.”  I’ll be curious to see if Blinder follows through with the idea that the bursting of the bond bubble was larger and more devastating than the housing bubble.  Blinder also tries to be provocative by saying that Fed actions “worked.”  The financial system “healed faster” than expected.   What would be his counterfactual, is what we have to pay attention to.

Then Blinder sinks to cliché: “One of my biggest frustrations was how little explanation the American people ever heard from their leaders.”  An unfortunate elitist cliché too, as if leaders were needed to explain things too complex for the ordinary person.  But my objection is more this: What is Blinder’s evidence that there was little explanation?  He does not cite any sources.  And little compared to what?  Was there some other phenomenon that was explained a lot?  Did The Wall Street Journal not cover the financial crisis and explain it as it happened, in the several hundred articles published on the crisis in 2008 after Lehman Brothers?  Did we really have to wait for Alan Blinder’s book to finally understand the crisis?  Blinder then accuses President Bush of being silent on the crisis.  But a quick glance at the President’s September 2008 speech, after the collapse of Lehman Brothers, reads very much like Blinder’s super-short version of the crisis.  And another speech in November 2008 echoes very similar themes.  An article by journalist Martha Raddatz in October 2008 notes that President Bush had given nine speeches on the crisis.  Blinder goes on to criticize everyone else, from President Obama to the lowliest TV commentator… never mind the bloggers.  I began to think he had mistaken writing a book for writing a rap song… “My grill is badder and shinier than yours!” is what he seems to be saying.

Blinder’s insiderism gets the better of him, as twice (p. 7 and 9) he makes reference to Rahm Emanuel’s nostrum that the financial crisis should not be wasted: it should be an opportunity for bipartisanship and reform of the financial industry.  It is a hackneyed phrase, and an editor should have just rewritten that in plain prose.

This is bad, I’m not even up to page 9 yet!

About mkevane

Economist at Santa Clara University and Director of Friends of African Village Libraries.
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