The Mess We're In

May 27, 2013
Political responses almost inevitably worsen financial crises, argues finance and economics writer Fraser-Sampson (No Fear Finance) in this thoughtful reflection on the contemporary economic morass that was triggered by the 2007–2008 banking meltdown. The crux of the issue lies in the imbalance between short terms of office and the longer time needed to work out economic problems. Yet Fraser-Sampson is more interested in historical background than diatribe, applying theories from Keynes and Marx, as well as the lessons of the U.S. Marshall Plan, to Britain as a test case. His somewhat rambling review of post-Depression history concentrates on what he sees as the perversion of Keynesian doctrine into justification for permanent budget deficits. His interweaving of history and economics, with its emphasis on postwar Britain, illustrates the often-dire practical consequences of policy decisions. Envisioning a rising tide of potential inflationary disaster, Fraser-Sampson argues for limited government and a restriction of unilateral powers. Policymakers will view this proposal as anathema, and the means of enacting it are unclear. But the basic thesis will surely find supporters, and the ordinary reader may see it as a starting point on the road not yet taken.

July 1, 2013
The current international financial crisis reaches back decades, not years, and will continue for the foreseeable future because its roots are not in finance but in politics, asserts British financial writer Fraser-Sampson. Unlike most economic pundits, he focuses more on how the crisis occurred than why, aiming sharp criticism at self-interested politicians who lack the understanding and courage to make the changes necessary to relieve the crisis and avoid future financial disasters. He analyzes the credit bubble that caused the crisis, the burgeoning national debt of nations running budget deficits, recession and slow economic growth, pension-funding shortfalls (particularly in Britain), and politics embroiled in economic policy. He offers historical perspective reaching back to post-WWI Europe and views the current mess through the socialist model of Karl Marx, the balance-of-government-and-private-enterprise model of John Maynard Keynes, and the Austrian School model that argues against government intervention in economics. Noting the failure of socialism and the dubious results of Keynesian economics, Fraser-Sampson argues for the controversial ideas of Ludwig von Mises and Friedrich Hayek that have gained popularity among American conservatives.(Reprinted with permission of Booklist, copyright 2013, American Library Association.)