CRASHED: HOW A DECADE OF FINANCIAL CRISEfS CHANGED THE WORLD - ADAM TOOZE

Woof. This book turned out to be much, much longer than I thought. I’m not even sure exactly where I heard of it. Something else I was reading mentioned it as “the best” or “one of the best” accounts of the 2008 crisis, and, since that’s a subject I’m always interested in, I ordered it from the library. It turned out to be 700 pages long. I didn’t think, initially, I’d read the whole thing, I’m interested in the crash, but not that interested. However, I ended up making it through. Tooze is a historian of Europe and is famous for writing huge books I haven’t read about the economic histories of WWI and WWII. So, as you can imagine, this book takes a much more global approach to the decade. At first, I was bored and wondered if I would skip the Euro-zone chapters. Yet, the writing was clear enough and the connections were interesting enough to keep me engaged. And the amazing analysis we get at the end of the book, explaining, say the Russia/Ukraine conflict, is only made possible by showing the connections. And the big takeaway, at least for me, was how interconnected these global systems were and are. So that not only did the US government prop up the entire US economy in 2008, it engaged in things like trillions in currency swap lines to foreign central banks, that propped up the world economy at large. There’s a quote from Chinese investor and Duke trustee Gao Xiqing calling this “socialism with American characteristics” which seems cruel and apt. The other main thing to note is how thoroughly the political left gets played in these years. Bernanke, Paulson and others manage to get Obama to pull out all the stops to protect a world-economic system that has, since roughly the 70’s, benefited a very small sliver of the population. Bernanke is quoted as saying, “We might not even have an economy on Monday” to press onto Obama the seriousness of the situation. Of course, by saying “ an economy” instead of, maybe, “our carefully constructed misery machine” he’s engaging in a truly breathtaking display of Capitalist Realism. We can only inject money until we revive the system as it stands. Altering the way things work, by say, nationalizing the banks or breaking up entities too big to fail, or bailing out small home-owners (China loaned over 220 million rural folks money to buy large appliances like TVs) is impossible and unthinkable. And Obama is quoted in this book telling bankers, “my administration is the only thing standing between you and the pitchforks.” Insanity. If anyone should be spending all of their political capital defending financial capitalism and huge multinational banks, it should be the right. But the ostensible “left” in the US or Germany or France is stuck being the “adults” which here means defending a deeply unfair and cruel system while the right is able to draft off the anger this system inevitably produces. It is ludicrous that there are still free-markert “purists” or neoliberals of any stripe who are taken at all seriously. The system they’re promoting breaks constantly and requires unfathomably large injections of public money to function. This book covers over a decade and still isn’t up to date enough to cover the trillions spent trying to prop up a market that cannot survive a predictable pandemic. But they never have to live with consequences of their dumb ideas since there’s always a center-left technocrat willing to burn all the political capital they have to save this way of life. It was eye-opening and unsettling to see this play out again and again. Tooze knows so much about European politics, he made it possible to follow this dynamic over and over in Greece, Italy, Portugal, Germany, etc. It was especially enlightening to read about Eastern Europe/former Soviet Bloc countries, I simply did not know enough to connect Russia’s movements into Georgia and Ukraine with the 2008 collapse. It’s also predictable but still upsetting to see the degree of mask-off racism that’s built into the IMF. For years activists have harped on the fact that entities like the IMF are best understood as neocolonial tools and this book really highlights the way a supposedly “neutral” institution like the IMF was resisted by European countries because they associated it with, to quote our president, “shithole countries.” Sarkozy literally says, “Forget the IMF. It’s not for Europe, it’s for Burkina Faso.” Viktor Orbán is quoted as saying, “Neither the IMF nor the EU financial bodies are our bosses,” which brings into sharpest relief what this book is really getting at. To have a fluid, globally-integrated, financalized and growth-obsessed world economy, especially one that produces such stark differences between losers and winners, you must be constantly tinkering and propping up and adjusting. And this process must be beyond democratic control, since, after decades of this regime, it’s no longer really possible to feed people lines about how a booming stock-market helps all of us, or that our children will have a better life than us, or that we enjoy the quality of life of 50 years ago. Tooze points out that if you remove the bubble then the economic growth in the 2000’s is slower than the recovery period of 2008-on. So it’s been quite some time since this system has made any sense. Global warming is going to, and is already, bring all of these tension to untold levels of intensity. There’s a throw away fact in this book that China bought 10% of the arable land in Ukraine. The stark differences between the global rich and poor, an economic system that is unloved by all but is impossible to change, the ways this deadlock produces political extremism at all ends, our total inability to solve large scale problems, all of these issues are highlighted in the book and seem to be getting worse. This is some of the best history I’ve read in awhile. I wish there was a more compact version so more people would read it, but I’d really recommend you check it out. If you’re familiar with the “Giant Pool of Money” This American Life episodes, or “The Big Short,” think of this as the 201 class, where you go beyond the basics and see what the 2008 crash has meant a decade out. I’m convinced this is the account for at least the next 15 years. 2008 credit default swaps.