The world-renowned economist offers “dourly irreverent analyses of financial debacle from the tulip craze of the seventeenth century to the recent plague. This review of John Kenneth Galbraith’s book “A Short History of Financial Euphoria” documents history’s lessons for financial decision makers. A Short History of Financial Euphoria. John Kenneth Galbraith, Author Viking Books $16 (p) ISBN
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The world-renowned economist offers “dourly irreverent analyses of financial debacle from the tulip craze of the seventeenth century to the recent plague of junk bonds.
Paperbackpages. Published July 1st by Penguin Books first published January 1st To see what your friends thought of this book, please sign up. Lists with This Book. Aug 02, Daniel Clausen rated it it was amazing. This is the second book I’ve read in a short time about financial manias, and it’s an important one. Johhn book was written in the early 90s at a time when the junk bond bubble had collapsed.
The book is short, simple, and intelligent. It also comes from a sensible left-of-center perspective that I feel is both wise and sadly lacking into today’s landscape. I don’t know everything about Mr. Galbraith’s financial view, but he seems Neo-Keynesian. The central arguments of the book are these: See authors such as Nassim Nicholas Taleb for more on this subject.
When a hietory innovation is new it usually means that a hype machine is forming and that a bubble is inflating. I probably liked this book better than “The Ascent shorrt Money” because of the fniancial of its themes and how relevant they are for today. At about pages, it is a book that even high schoolers could read and benefit from. The references to Mr. Donald Trump will also seem prescient hhistory inMr. Galbraith was writing about Trump as a failed businessman backed by bankers who should have known better; 20 years later, he is now a politician run amok backed by voters who should have know better.
Galbraith was right to predict that 20 years was all it took to forget If we’re looking for the source of the next financial catastrophe, then look no further than — the public endorsement of bullshit artists, partisanship, a growing national debt, frivolous tax cuts, frivolous tariffs, fiscal easing without end, and an abandonment of science. I would financiwl add an abandonment of the idea of safety nets, both the political left version that includes government support for the hixtory and the political right version that involves a deep caring for the people in our community.
I’m not sure Mr. Galbraith would agree with me here, but I think he would. Galbraith, where is your simple, coherent wisdom galgraith we need it most?
Feb 16, Lainie rated it really liked it. This is not my usual style of book. My accountant husband urged me to read it after I failed to read another book of Galbraith’s–The Great Crash, I believe it was. This book was shrt and a fast-paced read, essential if I’m going to read some non-fiction book about financial matters. I flew through this book and it was a big eye-opener. It was hietory course an extremely timely read considering recent financial upheavals, though it was published in the early ’90s.
I financiall this book if you want some insight into how greed and hubris affects markets again and again. Bit unfair to rational choice theory, but it was a different time perhaps. It is interesting to note that Galbraith places the blame for speculative mania quite purely within crowd psychology rather than more institutional effects like easy credit, etc.
Hope is an unbacked asset, and people get silly. Oh, and thought his discussion of the first two American central banks, regional politics, and the wildcat og were quite interesting, but everything discussed is generally in passing; it is a sh Bit unfair to rational choice theory, but it was a different time perhaps. Oh, and thought his discussion of the first two American central banks, regional politics, and the wildcat banks were quite interesting, but everything discussed is generally in passing; it is a short history after all, and basically just a long essay.
Jul 25, John eulhoria it liked it Shelves: Galbraith ‘s reputation as an economist isn’t what it once was. But as a writer of popular, accesible economics, he is, in my view, up there with Bastiat.
His The Great Crash of is an excellent bit of descriptive writing and this short book is another riff on its themes. Are the causes of economic events such Galbraith ‘s reputation as an economist isn’t what it once was. Are the causes of economic events galbraitb as assets bubbles and busts endogenous – originating within the economic system, such as central bank action or new innovations – or exogenous – originating outside it, such as natural disasters?
Aa comes down very firmly for the latter, rooting his explanation entirely in group psychology. For the same reasons I didn’t much like Animal SpiritsI find the total reliance on group psychology unsatisfactory. In the most recent boom and bust, that of sub prime mortgages and their derivatives, there were plenty of endogenous factors which cannot be ignored. But Galbraith makes some good points. His focus on the repeated presence of leverage in these events is interesting and it is a shame that space does not allow for a more systematic analysis.
Also, Kfnneth is entirely right to castigate the quest for ‘the’ person to blame after the bust. For all the fuss about bankers sincelittle popular flak has been directed at central z. Jan 04, Francisco rated it really liked it Shelves: Short and sweet, witty, humorous, and yet informative.
A Short History of Financial Euphoria : John Kenneth Galbraith :
Galbraith shares his characterization of episodes shprt speculation, then gives the account of a ruphoria such episodes, from Holland’s tulip mania to the crash of October When the average person becomes richer during an euphoria, he also tends to believe that the new riches are the product of h Short and sweet, witty, humorous, and yet informative. When the average person becomes richer during an euphoria, johhn also tends to believe that the new riches are the product of his superior insight or intuition.
Very few, however, true innovations ever occur, and most of these apparent innovations involve the creation of debt. The analysis of the crash seldom places any blame on the stupidity and greed and gullibility of the people who drove the bubble, for two reasons. First, it runs counter to the presumption that wealth is associated with intelligence.
Second, the market is supposed to be always right. More regulation is not necessarily the solution.
Galbraith’s essay pales in comparison with the exhaustiveness of, for instance, Kindleberger’s history of panics, and it’s not a substitute for those more extensive books. But it’s much better written and digestible than those longer treatments, and so it’s more likely that lay readers read it through.
The first response came from a convocation of former Secretaries of the Treasury, professional public spokesmen, and chief executive hiztory of major corporations.
They joined in sponsoring a ‘New York Times’ advertisement attributing the crash to the deficit in the budget of the federal government. This deficit had already persisted in what was considered by fiscal conservatives an alarming magnitude for the preceding six years of the Reagan administration. But then, on that terrible October morning, realization was thought to have dawned. The financial markets suddenly became aware. Sep 09, Ravi Abhyankar rated it really liked it.
A short history of financial euphoria can be read in two hours, it offers amusement as well as utility. Galbraith in shot sentence describes those people: The meaning of leverage can be truly understood on reading this book.
Greed is an overpowering emotion as compared to caution. Euphoria is inevitably followed by bust, disgrace, even exile or suicide. If you believe you can make huge money in markets, you must read this book to temper your optimism.
Aug 25, Chuck rated it liked it. That seems to be the pattern galbrairh financial boom and bust. In this slender volume, John Kenneth Galbraith selectively traces episodes of speculative excess from the Tulipomania of the midth century through the Crash of ‘ Why don’t we ever learn? Galbraith identifies several reasons. First, kenneth memories of financial debacles tend to be very short; therefore, each new generation of financial “wizards” can effectively start over with a blank galbfaith.
Second, each wave of new financial instruments is billed as unprecedented and novel and therefore exempt from the failings of earlier ones although in fact they are nothing but recycled ideas in new clothes.
Third, people wrongly tend to equate money with intelligence: If Investor X is making all that money, he must be especially wise. Fourth, when a hisgory comes, the explanation tends to be located in handy scapegoats e. Although first published inthis elegant little book could have been written yesterday.
It doubtless won’t prevent the next economic downturn, just as it failed to prevent the last one, but we can’t say kennetj no warnings have been available. Apr 22, Laura Kyahgirl rated it really liked it Shelves: This book was referenced several times in “Juggling Dynamite” so I thought I’d check it out. Galbraith’s style reminds me of the intellectuals I was always tripping over at the University but he’s quite readable.
In fact, the book is pretty funny in a sarcastic, cutting kind of way. Galbraith reviews the aspects of human nature and the economy that allow us to constantly go into boom and bust cycles.