In September 2008, Chicago School conservative Judge Richard A. Posner broke from his past and wrote (in The New Republic) that deregulation was one of the primary causes of  the 2008-09 recession. He hailed John Maynard Keynes’s 1936 classic, The General Theory of Employment, Interest, and Money, and said that “despite its antiquity, it is the best guide we have to the crisis.”

Indeed, the financial crisis has led to lost confidence in the laissez faire style of economic policy, and a Keynesian revival. Keynes advocated for an interventionist government role in the market economy in cooperation with private initiative, to mitigate the adverse effects of recessions and booms—a view that influenced FDR’s new deal policies. (Click on the book images for details.)

Keynes: The Return of the Master
By Robert Skidelsky
Public Affairs Publishing, 2009, 240 pages
$17.13 hardcover, $14.27 Kindle

Skidelsky, Keynes’s preeminent biographer, contends that Keynes’s mixture of pragmatism and realism distinguishes his thinking from the neo-classical or Chicago school of economics.

Paul Krugman, who won a Nobel Prize in economics, said Skidelsky’s book is “a must read even if one doesn’t fully accept its conclusions…This is a wonderfully stimulating book, one that reflects the author’s unparalleled erudition. We’re living in the second Age of Keynes—and Robert Skidelsky is still the guide of choice.”

The Keynes Solution: The Path to Global Economic Prosperity
By Paul Davidson
Palgrave Macmillan, 2009, 208 pages
$14.96 hardcover, $9.99 Kindle

Davidson “exposes the intellectual mistakes which led to the present world economic downturn,” wrote Skidelsky of his competitor, ”and shows how Keynes’s ideas can help bring about a ‘civilized economic society.”

Davidson provides insights into how we got into the crisis—but more importantly how to use Keynes economic philosophy to get out of this mess. He makes recommendations and presents plans for spending, monetary policy, financial market rules and regulation, and wages.

John Maynard Keynes
By Hyman Minsky
McGraw-Hill, 2008, 181 pages
$16.47 paperback, $14.82 Kindle

This book is for economists and financial professionals, not general readers. Minsky argues that what most economists consider Keynesian economics is at odds with the major points of Keynes’s The General Theory of Employment, Interest, and Money. Too many contemporary economists ignore “pervasive uncertainty.” Once uncertainty is given center stage, recurring episodes of financial system crises are inescapable.

For balance, see my review of three books that present a conservative viewpoint:

• Meltdown, by Thomas E. Woods, Jr.
• End the Fed, by Ron Paul
• Architects of Ruin, by Peter Schwiezer

Click on the book images for details or to purchase.

Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse
By Thomas E. Woods Jr.
Regnery Press, 2009, 194 pages
$18.45 hardcover, $9.99 Kindle

Woods offers a free-market, small-government assessment of the worldwide financial crisis of 2008-09. He blames the U.S. Federal Reserve System, and argues that the only way to rebuild our economy is by returning to the “fundamentals of capitalism” and letting the free market work. Bailouts can provide temporary relief but ultimately make things worse, he says.

Woods is also the author of The Politically Incorrect Guide to American History (2004), and is coauthor of Who Killed the Constitution? (2009).

End of the Fed
By Ron Paul
Grand Central Publishing, 2009, 224 pages
$14.95 hardcover, $9.99 Kindle

Most people think of the Fed as indispensable to a properly functioning country. Paul, an 11-term Texas Congressman and physician, draws on American history, economics, and stories from his own long political life to argue that the Fed is both corrupt and unconstitutional. It is inflating currency today at nearly a Weimar or Zimbabwe level, a practice that threatens to put us into an inflationary depression, he warns. He proposes a way to fix America’s economic policy for future generations.

Architects of Ruin: How Big Government Liberals Wrecked the Global Economy
By Peter Schweizer
Harper, 2009, 240 pages
$16.49 hardcover, $9.99 Kindle

The 2008-09 meltdown was “a massive failure of social engineering by liberals,” Schweizer says. It was “Robin Hood capitalism run wild.” A coalition of left-wing activists, liberal politicians, and “do-good capitalists” on Wall Street leveraged government power to achieve their goal of broadening homeownership among minorities and the poor. The results were not only devastating to the economy, but hurt the very people they were supposedly trying to help. Those same culprits are now trying to lead us out of the crisis and into a “massive overhaul of the American economic system.” The “green” technology movement, for example, will cause another bubble and crisis. Schweizer is strident, not ashamed to make ad hominem attacks (Jesse Jackson is a “race-baiter”).

Balance, anyone?

In September 2008, the Chicago School conservative Judge Richard A. Posner broke from his past and wrote (in The New Republic) that deregulation was largely responsible for the recession. He hailed John Maynard Keynes’s 1936 classic, The General Theory of Employment, Interest, and Money, and said that “despite its antiquity, it is the best guide we have to the crisis.”

For a new perspective on Keynes, see The Keynes Solution: The Path to Global Economic Prosperity, by Paul Davidson (Palgrave Macmillan, 2009). Keynes advocated for an interventionist government role in the market economy in cooperation with private initiative, to mitigate the adverse effects of recessions, depressions, and booms—a view that influenced FDR’s new deal policies.

One thing these five bestsellers have in common: They blame that mother of all scapegoats, greed (among other things) for the economic collapse of 2008-09. (Click on the images to see more details or to purchase at Amazon.com.)

And Then the Roof Caved In: How Wall Street’s Greed and
Stupidity Brought Capitalism to Its Knees
By David Faber
Wiley 2009, 208 pages $17.79 hardcover, $9.99 Kindle

In And Then the Roof Caved In, a CNBC reporter traces the roots of the economic collapse of 2008-09 to failures of investment banks, mortgage lenders, ratings agencies, and the U.S. government. It all started when the Federal Reserve pushed interest rates to historic lows after 9/11/01.

The Housing Boom and Bust
By Thomas Sowell
Basic 2009, 192 pages
$16.47 hardcover, $9.99 Kindle

In The Housing Boom and Bust, a prolific political journalist explains the economics and politics of the housing boom and its collapse. He pulls no punches when discussing politicians of either party, the financial dangers they created, or the distractions they created later to escape their own responsibility for what happened.

A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers
By Lawrence G. McDonald and Patrick Robinson
Crown Business 2009, 368 pages
$17.20 hardcover, $9.99 Kindle

The demise of the nation’s oldest investment bank was a devastating blow to the world’s financial system. The authors of A Colossal Failure, one a former Lehman VP, blame the firm’s executives who were arrogant and recklessly addicted to growth.

House of Cards: A Tale of Hubris and Wretched Excess on Wall Street
By William D. Cohan
Doubleday 2009, 480 pages
$18.45 hardcover, $9.99 Kindle

In House of Cards, Cohan, a financial journalist, traces the beginning of Wall Street’s collapse to the fall of Bear Stearns. He “vividly documents the mix of arrogance, greed, recklessness, and pettiness that took down the 86-year-old brokerage house, and then the entire economy.” (BusinessWeek) He “does a brilliant job of sketching in the eccentric, vulgar, greedy, profane and coarse individuals” who ruined Bear Stearns. (Los Angeles Times)

Fool’s Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe
By Gillian Tett
Free Press 2009, 304 pages
$16.56 hardcover, $9.99 Kindle

A Financial Times journalist details how the market in securitized credit derivatives was perverted by greed, arrogance, and delusion, in Fool’s Gold.