Book Club

Ronald Reagan's campaign slogan in 1980 was Let's Make America Great Again.  When he ran for re-election in 1984 it was It's Morning Again in America.  

There is a certain fondness for the decade of the 1980s as a period of renaissance in the United States with President Reagan and Fed Chair Paul Volcker credited with beating inflation into submission.  GDP growth for the period averaged 3.3 percent, unemployment declined to less than 6 percent and the stock and bond markets closed the decade up 228 percent and 253 percent respectively.  

Nevertheless, the decade of the 80s had more than its share of crises.  For the financial sector there was the collapse of the savings and loan sector.  Topped by more than a couple thousand bank failures.  The junk bond crisis, commercial real estate crisis, Latin American debt failures and the largest single day stock market drop in history on October 19, 1987.  I remember.  Not so fondly, either.

Contextually, GDP growth was just as high in the 1960s, 1970s and 1990s.  Unemployment was lower during those same decades.  Stock market gains were more robust in the 1960s and 1990s.

But 1981 marked a watershed moment in US economic history; launching the era of the Great Releveraging. And a historic growth in both private and government debt.  

A Brief History of Doom examines a series of major financial crises over the past 200 years in the United States, Great Britain, Germany, France, japan and China - including the Great Depression and the Great Recession of 2008.  Author Richard Vague demonstrates how the over-accumulation of private debt does a better job than any other variable of explaining and predicting financial crisis.

Convinced that we have it within our power to break the cycle, Vague provides the tools to enable politicians, bankers and private citizens to recognize and respond to the danger signs before the crisis arrives.