Sunday, August 8, 2010

Book Review: Freedom from Fear, Part I

Funny.  I just realized I'd started a draft review of (half) of this book and never finished or posted it.  A little context is in order: I was reading books on finance during the height of the financial crisis, as many people were.  And the granddady of them all, The Great Depression, was written about by a former professor of mine, David M. Kennedy.  (Kennedy was the greatest college-class lecturer I had.  I loved going to class when he was teaching; his lectures were cogent, beautiful, and polished.  They were like performances--at the start of one my friend Dave turned to me and said, "I've heard this one before, it's great!")

Kennedy's Pulitzer Prize winning book, Freedom from Fear is about the Great Depression and World War II.  As I'd written in my draft (at a time when this seemed an open question), "the good news is this: We Are Not In The Second Great Depression. Not because times are good right now, but because the Depression was so bad."  Not just in the sense of economic hardship as we see it today, but in the sense of real, grinding, crushing, poverty.  Nicole's grandmother told us that for a while she ate beans every day during the Depression.  Even for people who've lost jobs and hurting, the occasional McDonald's cheeseburger is probably not out of reach.

So just to appreciate how good we have it, it's worth reading about the Depression. But the book is fascinating in other ways.  The Hoover Administration didn't just ignore the Depression, but everything they tried wasn't nearly enough.  And there was this sense of American optimism that things would be fine that is very reminiscent of how the economists and policy makers in 2007 said everything would just be contained to subprime.  The lesson is that things can get out of control so fast that no one sees it coming.  It's scary and we're lucky to have pulled back from the precipice.

There are probably lots of other great books about the Depression, but this book certainly covered what I wanted to know.  I know from my class with Prof. Kennedy that the second half about WWII will be incredible, but I've put the book away and moved on for now.

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