The most recommended books about the financial crisis of 2007–2008

The authors maintain that everybody experiences flashes of insight: those moments when an "aha!" reaction leaves us feeling enlightened and empowered. I have felt this and you probably have too. Insights are the bits of knowledge in different parts of ourselves and they can be harnessed into a more integrated and effective whole.

Learning To Use What You Already Know explains how you can encourage insight. Consider that each of us knows more than we think we do. Thus we can employ a reflective process, described in the book, that integrates our conscious and unconscious resources, and prompts our perceptions of everything from getting along with coworkers, to being a visionary leader, to coping with technological change.  

Here are what I consider to be some of the book’s amazing takeaways: Life repeats itself until we learn. Lack of fit is not failure. If you get it right the first time,… show more.

I can’t say how much I love this book. It explains everything we know intuitively about economics but find hard to justify. Hudson was one of the few who saw the 2008 crisis coming, and he is still one of the few who know what we must do now. Taking the discussion of David Graeber’s extraordinary 2011 book Debt: The First 5000 Years to the next level, Hudson shows how Bronze Age rulers understood economic instability better than we do. When people get into serious debt, their personal crises not only destroy their own lives but ripple outwards to derail society, by giving their creditors enough power to compete with governments. To avoid society being run into the ground, governments must start cancelling debts – as they did long ago.

Cleaver by name, cleaver by nature? Certainly, as an analyst following in Marx’s footsteps, Harry Cleaver resembles a nimble knife aspiring to a heavy-duty hatchet.

His ideas are impressive but make easy reading. So much so, he has attracted a great following since the publication of his now classic work Reading Capital Politically (1979). Rupturing the Dialectic (2017) is one of Cleaver’s most recent books. In three parts, he sings the praises of Marx’s work-oriented concept of ‘value’, delves into ‘decoding’ the financial sphere that currently mires us, and argues that "getting rid of money and markets entirely is not only a necessary condition for getting rid of capitalism but also desirable in its own right."

Observe the cleaver in action!

A classic book on the pain that fashion inflicts on both people and planet. This book does an excellent job of showing how the exploitation of people is inseparable from the exploitation of the biosphere. It is a searing critique of the fashion industry and its voracious appetite for evermore profit, and how this short-termist model is driving us towards disaster.

This is my favorite book about the financial crisis of 2008. Richard had unparalleled access to Bill Ackman, one of the savviest investors around, and tells this story with amazing detail and insight. Everyone knows The Big Short, but Confidence Game is the book to read to really understand what created the credit crisis of 2008. 

This book tells the story of how an interest rate (“LIBOR,” for London Interbank Offered Rate) used to set mortgage, credit card, and auto loan rates was manipulated. Sounds important, but maybe not so interesting? Wrong.

You don’t need to have the slightest interest in LIBOR to love this book. What really propels the book is the human story, intricately but compellingly told. We learn who the LIBOR manipulators were, how and why they did what they did, and the dynamics of the community they created.

We learn, too, about the institutions – huge financial institutions – that nurtured and lavishly rewarded these people, and the regulators who took rather too long to catch them. 

I like this book especially due to its ability to illustrate money illusion in a very unconventional context.

Normally, money illusion means that people take nominal variables as proxy for real variables, which leads to suboptimal choice having real effects on the economy and affecting business cycle.

However, to my great surprise this book claims that even economic experts might suffer from some kind of money illusion, because they tend to misinterpret what is happening in the monetary system. This offers a very interesting explanation of recession and suggests that economists have not targeted adequate variables.

Unconventional suggestion to practice nominal GDP (gross domestic product) targeting instead of targeting the money supply is “outcome” of unique author´s vision called market monetarism. Inattention of policymakers to development of nominal GDP is blamed to be the direct cause of recession. 

Since the global financial crisis of 2007-8, everyone knows about the transformation of financial markets that has taken place in recent decades. It also well known that developments in information technology have played a major role in that transformation. What is less well known is where the ideas that made it all possible came from. In this book, Perry Mehrling tells the story of Fischer Black, one of the creators of the Black-Scholes formula for pricing options (rights to buy or sell assets at a specified price at some point in the future) which are one of the foundations on which modern finance rests. The book shows how these ideas emerged out of a new type of community that spanned university economics departments and business schools as well private-sector financial firms, many of them founded in order to trade on the basis of the theories their founders had developed.

A brilliant short history of capitalism, and how it all evolved until we got to today’s late or hyper-capitalism.

I love the way the book draws from social and economic history, to show how economic, social, and personal relations and ways of life have been weakened is something that starts from the 14th century but also evolved locally as much as in more universal ways.

The global financial crisis that erupted in 2008 was a shocking event. Britain’s cash machines came within a few hours of stopping working, and the global banking system would have collapsed were it not for unprecedented multi-billion-dollar government bail-outs. Gillian Tett, trained as an anthropologist, became a financial journalist but kept on applying her fieldwork skills. Almost alone in her new profession, she grasped the huge risks that were developing underneath the radar and wrote about them in the Financial Times. Her book, Fool’s Gold, was one of the first books written about 2008’s giant crisis and remains one of the best. 

To my mind, Tett is the world’s top financial journalist, and I’ve always learned a great deal from her pioneering in-depth reporting.