- Through the Looking-Glass
At this late date, there is no need to stop the presses when stating that the Great Recession—or the Lesser Depression, as Paul Krugman calls it—severely damaged the U.S. and European economies and, in so doing, brought considerable pain to a large number of people. Indeed, one of the few positives to come out of the recent financial debacle and its dismal economic aftermath is the many excellent journalistic and scholarly analyses that have been evoked. At the risk of omitting some important works, any good reading list would include books by Andrew Ross Sorkin, John Cassidy, Greg Farrell, Michael Lewis, Neil Irwin, Raghuram Rajan, Daniel Drezner, Roger Lowenstein, Alan Blinder, and Martin Wolf; as well as the official Financial Crisis Inquiry Commission’s 2011 report (including the dissent written by Keith Hennessey, Douglas Holtz-Eakin, and William Thomas); the revealing memoirs of Hank Paulson, Tim Geithner, and Ben Bernanke; and the quirky, but richly suggestive takes on the crisis by novelist/journalists John Lanchester and Keith Gessen.1
To this burgeoning list we now can add—indeed, must add—Barry Eichengreen’s Hall of Mirrors, which offers an impressive array of interpretive insights on the Great Recession while (and by) broadening and deepening the context within which it is viewed. Few authorities are more qualified to weigh in on the Great Recession than Eichengreen, the George C. Pardee and Helen N. Pardee Professor of Economics and Political Science at UC–Berkeley. Amazingly prolific, Eichengreen is the author of more than a dozen books and is editor of many more; plus he also has written hundreds of articles, essays, and reports; and myriad op eds, reviews, and commentaries. Much, if not most of this profuse body of work relates to questions of what might be called financial architecture—that is, questions concerning trade and capital flows, monetary policy, institutional arrangements, etc.—particularly at the global level. Although much of Eichengreen’s work deals with present-day issues, he is equally at home in the historical world. Indeed, he is arguably the world’s leading expert on the evolution of global financial architecture over the course [End Page 183] of the twentieth century, a position at once signaled and punctuated by the prominent place in economic history literature of his studies Golden Fetters: The Gold Standard and the Great Depression, 1919–39 (1992), and Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System (2011). Not for nothing, then, is he a past president of the Economic History Association and a fellow of the American Academy of Arts and Sciences.
What differentiates Eichengreen from almost all other writers on the Great Recession—his comparative advantage, as it were—is his deft combination of analytical breadth and historical depth. Some authorities are comfortable writing on the Great Recession’s course on both sides of the Atlantic. Others have the ability to compare and contrast this economic collapse with earlier recessions/depressions in the U.S. past. A few writers can do both of these things, most notably economists Ben Bernanke and Christina Romer, each of whom, wearing another hat, played a key policymaking role during the Great Recession. With regard to Eichengreen’s unusual command of the key matters at hand and ability to craft a rich, historical assessment of the Great Recession, one is reminded of a quote that Bum Phillips, late coach of the Houston Oilers, made in the 1970s about his star running back Earl Campbell: “He may not be in a class by himself, but it don’t take long to call the roll.”
The extended introductory comments above should not be interpreted as a mere throat-clearing exercise, for the past is prologue, as it were. As we shall see below, Eichengreen’s background, interest, approach, and tone will condition and shape, if not determine, the way in which most historians—certainly most readers of...