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Austerity: The History of a Dangerous Idea. Mark Blyth, 288 pages, Oxford University Press: New York, New York, 2013.
Reviewed by: Charles C. Carter
AUSTERITY AND J. M. KEYNES
Several very qualified economists say the recent financial crisis was foreseeable, including Robert Shiller, Paul Krugman, Dean Baker, and Joseph Stiglitz. By ''foreseeable'' they do not mean the exact time and extent of the debacle could be foreseen. Rather, they realized something serious was up and something very bad would happen if things did not change.
Mark Blyth thinks the recent financial crisis was foreseeable. The difference between Gorton's and Blyth's messages is a frame of mind.
Blyth starts his book with Chapter 1 titled ''A Primer on Austerity, Debt, and Morality Plays.'' Most everyone starts out their description of the recent financial crisis by calling it a ''sovereign debt crisis.'' Nations borrow money and then they cannot pay back the debt. With that...