Alan S. Blinder Penguin Press, 400 pages, $29.95
Do we really need another book about the financial crisis?
The economist Alan Blinder certainly thinks so. In "After the Music Stopped: The Financial Crisis, the Response and the Work Ahead," he says, "the American people still don't quite know what hit them."
A former economic adviser in the Clinton administration and ex-vice chairman of the Federal Reserve, Blinder is especially good at providing political context. Unlike some post-crash commentators, he doesn't unburden himself of utopian proposals that have no chance of adoption.
Given his understanding of the dismal realities in the nation's capital, Blinder thinks Uncle Sam did surprisingly well in coping with the crisis, and his book is an extended — and reasonably persuasive — apologia for the bailouts, the Fed's unprecedented interventions and even the Dodd-Frank reforms aimed at making a replay less likely.
There isn't much that's new here for crisis sophisticates, except perhaps Blinder's emphasis on the bond bubble that predated the crash and a vivid chart showing that, adjusted for inflation, home prices today are about the same as they were in 1890.
Lay readers will occasionally be flummoxed by references to balance sheets and the like. They will also be depressed by the portrayal of a government heavily influenced by lobbyists and unable to effectively address the foreclosure mess.
Fortunately, that's not the whole story, for every reader should come away with a sense of optimism as well. Blinder makes a good case that, in the face of catastrophe, public officials acted boldly and effectively.
The tragedy is that people don't seem to get that. This book is likely to help.