I would like to draw my readers' attention to four recent important contributions to the debate over our economic crisis.
The first, which unfortunately will not be published until the fall, is a book by Robert C. Pozen entitled Too Big to Save? How to Fix the US Financial System. A lawyer, a lecturer at the Harvard Business School, and the chairman of a large asset-management firm, Pozen is an immensely experienced and acute student of the financial system. His book is not only a detailed yet thoroughly lucid and accessible study of the financial crisis; it is also, and more important, the best critique I have seen of the government's responses to the crisis and its recent blueprint for financial regulatory reform. I hope that his analysis can somehow be conveyed to the Administration and Congress before the government makes irrevocable mistakes in its response to the crisis.
The second contribution is a special issue of the journal Critical Review (vol. 21, issues 2-3, 2009) entitled "Causes of the Crisis." (It is about to be published, and can be ordered at the following web site: http://www.criticalreview.com/crf/special_issue.html. It is a collection of essays dealing with the causes of our current economic crisis. The long introduction by the journal's editor, Jeffrey Friedman, entitled "A Crisis of Politics, Not Economics: Complexity, Ignorance, and Policy Failure," is a particularly good summary of what can at this early stage in our understanding be said with some confidence about the causes of the mess. Without meaning to denigrate any of the other essays, all of which are useful, I found particularly welcome the acknowledgement by economists, including Daron Acemoglu and David Colander, of what Colander and his coauthors call the "systemic failure of the economics profession." This is a point that I stressed in my book but that has received insufficient recognition by the economics profession (naturally).