The Best Books for Making Sense of the Financial Crash, 10 Years Later

A majority of the experts I spoke with said that for a dramatic, readable account of why the crisis happened and how it was dealt with, check out Too Big to Fail by New York Times business reporter and columnist Andrew Ross Sorkin. Through unprecedented access to key Wall Street protagonists, Sorkin tells a blow-by-blow story of the events of the crisis when Lehman Brothers crashed. “This is a vivid portrayal of how policy-makers faced the most difficult decisions at the time of the crisis,” says Rogoff. Niall Ferguson adds, “It’s not only highly readable — it’s full of the kind of candid testimony that I suspect would otherwise not have been preserved.”

This chronological narrative packs a comprehensive overview to the key events, people, and themes into a fast 400 pages: How did we ever get into such a mess? What was done to mitigate the problems of the financial crisis and why? Alan Blinder arbitrates these critical — yet contentious — questions in this book, which “provides the best feeling for the particularly bad behaviors of the banks,” says Stiglitz. Tooze adds: “This book remains the classic account of the crisis in the U.S. and the policy response. Lucid, tough-minded, and written with real verve.”

Angelo Mozilo, former CEO of Countrywide, and Roland Arnall, owner of Ameriquest, are but a few of the hundred-plus devils to feature in this book, written by Bloomberg columnist Joe Nocera and Vanity Fair contributing editor Bethany McLean. By spotlighting the personalities of key players, this book succeeds in synthesizing the complex interrelationships of Wall Street, Main Street, the Fed, and the Treasury Department, which came to a head in 2008.

Books written by leading actors of the 2008 financial crisis are generally seen as unpersuasive, seeing that they unavoidably offer a self-serving point of view. Still, Tim Geithner, who served as Treasury secretary before, during, and after the crisis, manages to narrate his experiences from inside the D.C.-NYC loop with “brutal” candidness about the failing of everyone involved — including himself. “For my money, this is the best first-person account, thanks to Geithner’s clear-eyed and instinctive grasp of the forces at work and the personalities involved,” says Ip. “Geithner deals only superficially with the underlying economics, but no one knows his way through the maelstrom better.”

If you have ever wondered why household debt features so prominently in debates on the causes of the 2008 crash and how to bubble-proof the economy from the next crisis, then read this book by economists Atif Mian and Amir Sufi. This account of how household leverage operated to drive the financial crisis, while “clear and accessible,” also delivers analytic rigor that gets at the structural forces behind the recession. Their conclusion is thus: The cause of real economic hardship was consumers’ inability to cope with their household debts, not the financial panic that brought down Lehman. “This book shows how the states hardest hit by the subprime crisis also had by far the worst recessions,” says Rogoff. “They, I believe correctly, stress that by far the most effective policy would have been to find a way to bail out low-income mortgage holders.”

“It’s financial history at its best,” says Ip of this Pulitzer Prize–winning book, which reminded the WSJ journalist during his reporting on the 2008 crisis of the time and critical distance it would take to fully comprehend its causes and consequences. Liaquat Ahamed’s story begins almost 80 years before Lehman Brothers collapsed and the world teetered on the brink of a second great depression, and then proceeds to chronicle how central bankers and their adherence to the gold standard precipitated the Great Depression. “Central bankers of that day were far more subordinate to their finance ministries (Treasuries) than they are today,” says Rogoff. “But it is nevertheless a marvelous written narrative of how central bankers were deer caught in the headlights.”

It’s worth repeating that when Lehman Brothers, a medium-size U.S. bank, toppled, it brought down the entire North Atlantic region into deep recession, and the eurozone into depression. This was truly a “North Atlantic Financial Crisis,” says Wolf in respect to Tamim Bayoumi’s account of the close links between the European and U.S. banking systems.

In this volume, the financial crisis in 2008 is but a symptom of the underlying economic illness called “Financialization,” which besets America, the richest and largest market-orientated country in the world where just 19 percent of young people identify as capitalists. “Foroohar’s book gives you a flavor of the bad behavior intrinsic to the financial sector,” says Stiglitz. “It’s good if you want to understand a critique of what was going on inside the heads of protagonists during the financial crisis.”

You should come to this book already familiar with key aspects of the great financial crisis: the housing bubble together with the peddling of subprime mortgages to vulnerable householders, the triumph of free-market ideology followed by deregulation, and so on. Wolf’s distinct contribution is to show the analytical link between global macroeconomic developments, especially the rise of China and the emerging global savings glut, with the fragility of the financial systems. “You have rather to be a bit Marxist to understand the crisis to get the big structural forces behind it rather than the role played by specific Great or Evil Men, which are emphasized in popular books about the financial crisis,” said Roubini. “Martin Wolf’s book has economic analysis and rigor; he sees the forest for the trees.”