Book Review
Title: "The Complete Idiot’s Guide to the Great Recession"
Author: Tom Gorman
Publisher: Alpha, 2010; 352 pages; $19.95
Sometimes I wonder if I’ve simply read enough about the recession. Fact is, we’ve all lived it. Depending on your perspective, you might feel we’re still living it.
And this recession, which seems destined to go down in history as The Great Recession, happened to coincide with (or contribute to) massive transformations in the media and publishing industries, from offline to online, from newspaper-centric to Web-based.
As a result, if you have been able to escape articles and opinion pieces on the recession, you should thank your lucky stars, friend. I, for one, seem to be bombarded by them by the dozens, on a daily basis.
And the book world is no different; I’ve read and reviewed shelves full of books on the economic and behavioral and corporate and political roots of the recession — mostly with an academic slant, and more shelves full of consumer-oriented books on how individuals have experienced the recession.
What I haven’t seen much of are consumer-oriented books seeking to help laypeople understand the whole picture of how the American economy unraveled and the role they, as informed voters, can play in creating and sustaining a national economic recovery.
Until now. Business author Tom Gorman, who holds a master’s degree in business administration, has teamed up with the publishers of the cringe-inducingly named "Complete Idiot’s Guide" series to create "The Complete Idiot’s Guide to The Great Recession," which promises — and delivers — an "unbiased analysis" of the events, jargon, players and entities that created, constituted and responded to the recession.
The book breaks things all the way down, including definitions of the mind-numbing laundry list of terms other books alternately throw around like everyone knows them, or define in such detail that no sane person can stay awake.
The book, not at all written for real idiots, but rather for smart, inquisitive citizens who lack a business background or simply crave a holistic, unbiased summary of the bubble burst, also covers the impacts of the recession on consumers, households, industries and states; systemic challenges that exist in the structure of the U.S. economy; and how the U.S. and global economies are "emerging" from the recession.
In Part 1, "The Causes of the Crisis," Gorman offers both a short and long-form explanation of the causes of the recession — all in the first page, then drills down into the contributing factors in much greater detail over the next few chapters. In classic, well-organized, easily digestible Idiot’s style, Gorman breaks down "Four Fatal Factors" and the "Key Players" involved in creating them, defining terms like "the Federal Funds rate" and "credit policy" into plain English.
Not only does Gorman display mastery over a vast time span and series of human and institutional behavior patterns, by explaining them so a sharp high school student could truly understand them, he also calls individual Americans out as key players in creating this crisis, along with the list of usual corporate, industrial and government suspects.
The book offers frequent action-item recommendations for its individual American readers, such as read and understand things before you sign them — common-sense strategies that, if adopted widely, would render us all better off.
Part 2, "Government Responds to the Crisis," summarizes the Bush and Obama stimulus plans, what the Fed has done (and the reforms that are glaringly needed, which haven’t yet happened), and how various other nations and the World Bank reacted to the global implications of the recession.
Part 3 focuses on "Lessons from Past Recessions and Expansions," with an emphasis on the expansion of government’s role in the economy during the Great Depression, the Reagan-era tax cuts that preceded the mild "Bush I" recession, the effective governmental responses to the 1980s savings and loan associations crisis, and the limitations on what "Bush II" and Obama could do to cure the Great Recession, as a result of already low interest rates and already high deficits, government debt and consumer debt.
Gorman also covers the lasting effects of the Great Depression on the U.S. government and economy in general, and the lasting effects of the past several decades on the American middle class, in specific.
Part 4 — which I would strongly suggest anyone with an interest in this subject matter read — explores how the recession has impacted everyday Americans, especially in terms of unemployment, which is still very much alive, as an issue.
Nearly 10 percent of Americans are currently unemployed, and many experts believe even more are underemployed, meaning they are working part-time jobs when they need full-time ones, or are working in positions below their potential.
Gorman treats this subject very well, including a compelling discussion of the future of unemployment in America. He also covers the income, wealth, savings and excessive spending/debting habits of Americans, which largely handicapped us on the whole from being able to endure the recession as well as we might have, and how our consumption and saving habits are evolving in the wake of the recession.
Part 5 shifts from the individual to the industrial, looking at the toll and transformations the Great Recession took on the auto and other industries, as well as the "50 different economies" of the individual states.
Gorman also seeks, in Part 6, to illuminate some of the structural challenges within the American economy (health care among them), and to educate readers as to how they might have been voting against their own economic interests when, for example, they force the government to lower taxes, despite the costs of governmental services that need to be offset.
The book concludes with Part 7, an examination of how our economy will fare going forward, at home and in interaction with the forces of the global economy, focusing on how post-recession regulation and reform seem to have been pro-bank, more than pro-consumer, but do seem to have averted the absolute worst-case scenarios that could certainly have developed.
Gorman briefs readers on the various governmental initiatives, from TARP (the federal Troubled Asset Relief Program) to the GM bailouts and beyond, and grades them for effectiveness, closing the book with a summary of continuing issues that need to be addressed.
He also offers a hopeful, Gloria Gaynor-reminiscent, yet well-supported declaration of his belief in the resilience of Americans and our economy. "We will survive," Gorman declares.
Whether you agree or you already have plans to move to our recession-proof neighbor to the north (Gorman describes Canada’s economic policy and reaction to our recession as "sensible, as usual"), if you crave to fully grasp the inputs and impacts of the recession but tend to get your TARP confused with your toxic assets, I’d strongly recommend "The Complete Idiot’s Guide to The Great Recession."
The book demystifies the whole mess and could help you exercise your voting power with economic wisdom, rather than from a purely political, dogmatic perspective.
