In This Review

Meltdown: Asia's Boom, Bust, and Beyond
Meltdown: Asia's Boom, Bust, and Beyond
By Mark L. Clifford and Pete Engardio
Prentice Hall, 1999, 322 pp

Although the Asian financial crisis has already been scrutinized by many economists, this is the study for nonspecialists seeking to clarify what the boom and bust were really about. Both business journalists, Clifford and Engardio tell a story that goes well beyond the usual statistical analyses, vividly describing the unprecedented inflow of capital and real-estate bubbles guided by poor investment judgments that helped cause the crash. In human terms, they identify the specific Asian business practices -- crony ties, disregard for profitability, and misguided fantasies of instant wealth -- that made the boom possible in the short term but doomed in the long run. The authors also charge that Americans could have been alerted to the dangers had they not allowed fantasy and greed to conquer good judgment. And Clifford and Engardio remain guardedly pessimistic about the possibility of Asia's returning to its former growth rates. In fact, they see China beset with serious problems and Japan mired in economic stagnation. The necessary financial reforms will take time, and cultural changes are needed to control hot money and make investments more sensitive to profitability. A useful story about the dangers of irrational exuberance.