Highly recommended: 'Lords of Finance'

If you were engrossed by today's NYT saga about Timothy Geithner as head of the NY Fed -- and even if you skipped past the story or didn't hear of it at all -- please make haste to read the saga of a previous incumbent of the job. Lords of Finance: The Bankers who Broke the World, by Liaquat Ahamed, tells the story of Benjamin Strong, head of the NY Fed through the 1920s, and of his central-banker counterparts in England, France, and Germany who, together and unwittingly, helped bring on the Great Depression.

Lords of Finance as it appeared to me on the trusty Kindle1 here in Beijing; physical copy not easy to get locally.


Economic theory has its place (and for me its place was grad-school classes). Well-done economic history is often far more illuminating. This is extremely well done history, and is worth mentioning now because of the obvious resonance between this tale of cleaning up after a bubble and today's predicament. Sample passage, about the 1920s but somehow sounds familiar:

Watching other people become rich is not much fun, especially if they do it overnight and without any effort. It was therefore inevitable that all this frenetic activity -- the thriving stock market, the new issues, the ballyhoo about a new era, the buying and selling of Florida real estate -- provoked a chorus of voices demanding that the Fed do something to stop the "orgy of speculation," a phrase that would become so commonplace over the next few years as to lose all meaning.

As it happens, Liaquat Ahamed and his wife Meena are friends of mine and my wife's, but I would recommend this book even if we'd never met.

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James Fallows is a national correspondent for The Atlantic and has written for the magazine since the late 1970s. He has reported extensively from outside the United States and once worked as President Carter's chief speechwriter. His latest book is China Airborne. More

James Fallows is based in Washington as a national correspondent for The Atlantic. He has worked for the magazine for nearly 30 years and in that time has also lived in Seattle, Berkeley, Austin, Tokyo, Kuala Lumpur, Shanghai, and Beijing. He was raised in Redlands, California, received his undergraduate degree in American history and literature from Harvard, and received a graduate degree in economics from Oxford as a Rhodes scholar. In addition to working for The Atlantic, he has spent two years as chief White House speechwriter for Jimmy Carter, two years as the editor of US News & World Report, and six months as a program designer at Microsoft. He is an instrument-rated private pilot. He is also now the chair in U.S. media at the U.S. Studies Centre at the University of Sydney, in Australia.

Fallows has been a finalist for the National Magazine Award five times and has won once; he has also won the American Book Award for nonfiction and a N.Y. Emmy award for the documentary series Doing Business in China. He was the founding chairman of the New America Foundation. His recent books Blind Into Baghdad (2006) and Postcards From Tomorrow Square (2009) are based on his writings for The Atlantic. His latest book is China Airborne. He is married to Deborah Fallows, author of the recent book Dreaming in Chinese. They have two married sons.

Fallows welcomes and frequently quotes from reader mail sent via the "Email" button below. Unless you specify otherwise, we consider any incoming mail available for possible quotation -- but not with the sender's real name unless you explicitly state that it may be used. If you are wondering why Fallows does not use a "Comments" field below his posts, please see previous explanations here and here.


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