Five years ago Sunday, Lehman Brothers filed for bankruptcy and set off the financial crisis that threatened the entire global financial system and plunged the nation further into recession, one it's still recovering from today.
Alan Blinder, Princeton professor, Wall Street Journal columnist, and former vice chairman of the Federal Reserve Board, explains how the worst economic crisis in postwar American history happened, what the government did to address it, and what is still left to do. In After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead Blinder argues that the U.S. financial system became too complex and too unregulated, which created a perfect storm beginning in 2007. He makes the case for government intervention and explains how it prevented a total financial meltdown.
"As long as the music is playing, you've got to get up and dance. We're still dancing." Those were the now-infamous words from Chuck Prince, then the C.E.O. of Citigroup, on July 8, 2007, the eve of the credit crisis. For Alan Blinder, former vice chair of the Federal Reserve Board, Prince's quote succinctly explains the problems with the financial and housing markets that led to economic collapse just a few years ago.