The Roaring Nineties: A New History Of The World's Most Prosperous Decade: Joseph E. Stiglitz

One of the key lessons to be drawn from the '90s, both directly and indirectly, is that the economy is more than a rarefied system of numbers and currencies. Treating it as such made sexy crazes of things like interest-rate dips and stock-option strike prices not too long ago. But as Joseph E. Stiglitz shows in his sobering history The Roaring Nineties, the rise of economic awareness blurred a big-picture view still coming into focus. A Nobel Prize-winning economist who worked for Bill Clinton and the World Bank during the '90s, Stiglitz examines the decade with a mix of academic distance and introspective urgency. As he sees it, the '90s boom and bust weren't anomalous so much as ominous byproducts of policies that continually fall into shared patterns. Providing context without overdoing the dry details, Stiglitz sketches a historical backdrop starting in the late '70s. He makes engaging sense of various economic flashpoints–the savings-and-loan debacle of the late '80s, good and bad moves by the Federal Reserve–and shows how they fanned out to dictate more than just monetary policy. The Roaring Nineties grows pointed with the arrival of the Clinton Administration (which Stiglitz praises and scolds in equal measure), and its fateful gamble in making deficit reduction a primary concern. The move proved winning in ways that defied much economic theory, but it also resulted in what Stiglitz calls, in typically even-handed fashion, "excessive deference" to the wisdom of financial markets. What steers The Roaring Nineties, and what makes it more than an economics book, is Stiglitz's crusade for reasonable balance between free markets and the governments that guide them. He rips into the '90s move toward deregulation, tracing a long history of taxpayer-funded bailouts to industries touted as smarter and more reflexive than government bureaucracy. From the non-accounting of stock options to the shell-game designs of Enron (which gets its own chapter), the decade's morality tales all signify an economic approach that misplaces incentives and favors bodies systematically immune to responsibility. The book's survey of the domestic rise and fall is disturbing, but it grows even more so as Stiglitz digs into the decade's move toward globalization. Too distracted by immediate rewards to consider the ramifications, U.S. business interests and policymakers preached different economic approaches at home and abroad, and the often-grim results stirred resentment among more than just bankers. Stiglitz proves invaluable as an inside player with a genuine desire to learn from the recent past, but his desire to equate economics with people is even more pronounced.