"Many politicians and policy makers seem blithely unaware of how little leverage the United States has with the countries financing our twin fiscal and current account deficits. They tell China it can't buy up American companies, and they threaten to take protectionist measures if China doesn't revalue its currency. That's very quaint - and foolish. In effect, China is underwriting U.S. wars in Afghanistan and Iraq, never mind the bailout of the financial system and any costs associated with reforming health care. Biting the hand that feeds us may play well with voters at home, but with China it has its limits.
"Is China's path to global hegemony free of obstacles? No. Only 36 percent of China's gross domestic product comes from consumption. In the United States that figure is upwards of 70 percent. While U.S. domestic consumption is too high, China's remains far too low. For now, its continued survival and growth depend heavily on cheap exports to the United States, which are in turn financed by the sale of debt to China. This perverse symbiosis ('They give us poisoned products, we give them worthless paper' explains Paul Krugman) poses a threat to China's long-term interests."
Nouriel Roubini is an economist born in Turkey to a family of Iranian Jews. He teaches at New York University and has his own consultancy firm. Co-author Stephen Mihm "writes on economic and historical topics for The New York Times Magazine, The Boston Globe, and other publications." He's also a professor of history at the University of Georgia.
Their book, Crisis Economics, advocates the study of economics and the implementation of economic policy from a boom-and-bust point of view, meaning that economic crises are viewed as the norm within any economy, and that a government's role is not to overcome any and all such crises (an impossible feat), but rather to prepare for them, and deal with them in the most effective manner where and when they occur.
This book is divided into ten chapters, with "Conclusion" and "Outlook" sections at the end. The financial crisis of 2009 is discussed in detail, as is the Great Depression and how it affected later decades. Speculative bubbles throughout history are explored, as are cycles of recession, recovery, and subsequent recession. Economic theories are put forth, as are strategies for alleviating future breakdowns in the financial system.
It's a long, detailed book that will alienate most people. I, however, thought it was extremely informative, and I read parts of it twice. If you're wondering what's really going on with regard to global finance, this book is a good place to start.
This said, Crisis Economics is definitely not easy reading. Those put off by its level of difficulty would do well to start with a couple of movies: The Wolf of Wall Street and The Big Short. After understanding the concepts thrown around in those two movies, you'll be a lot closer to understanding a book like Crisis Economics. If you walked away from those two films entertained but still mystified, you'll probably be avoiding this book anyway.
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