In This Review

Money, Greed, and Risk: Why Financial Crashes and Crises Happen
Money, Greed, and Risk: Why Financial Crashes and Crises Happen
By Charles R. Morris
Times Books, 1999, 224 pp.

An informative and entertaining financial history of the United States, with its full share of crony capitalism and shenanigans. This book places the recent financial crises -- in southeast Asia, Russia, and at Long-Term Capital Management -- in perspective, reminding American readers that they have no grounds to be smug. On the contrary, history suggests that Americans have often been slow learners. Financial crises erupted virtually every decade from the 1830s on, but it took a Great Depression for the United States to put in place the rules, regulations, disclosure requirements, and bank supervision that have served the economy so well since. Yet even those reforms did not prevent the savings-and-loan crisis, when politically favored institutions were given new freedoms without adequate supervision -- which invited risky use of insured deposits. The book also recounts the American fleecing of British investors in the late nineteenth century and neatly summarizes the recent financial crises. Morris is stronger on the view from the market than on the macroeconomics underlying the crises. But he provides useful explanations of the varied new financial instruments, so the reader comes away from the book better informed as well as entertained.