Joseph Stiglitz is a renowned economist who is the former chief economist at the world bank. Freefall analyses the main problems, which caused the recession in 2008. Many people including Joseph Stiglitz warned of what was to come in 2008, however, they were all ignored because the governments believed/wanted to believe that the markets would correct themselves. The last time America experienced a recession like this was in the 1930s after the Wall Street crash in 1929.
When reading Freefall, it soon becomes apparent that Stiglitz wants everyone to know that he warned the governments. It is very obvious that Stiglitz is not Larry Summers' biggest fan who is now the chief economic adviser to Obama. Furthermore, Stiglitz ridicules Bush's choice to give tax breaks to the rich. Stiglitz says that George Bush's delay on providing the stimulus was incredibly costly. On page 59, he says "Economic policies take months to be fully effective. It is therefore imperative to get money into the economy quickly". He makes 7 points that need to be in the stimulus: 1. It should be fast, 2. It should be effective, 3. It should address the country's long term problems, 4. It should focus on investment, 5. It should be fair, 6. It should deal with the short run exigencies created by the crisis, 7. The stimulus should be targeted at areas of job loss.
A big message that Stiglitz is trying to get through is that we cannot afford to have another crisis like 2008, we must learn from our mistakes and not ignore the advice that we were given from people like him about a decade ago. In this book, Stiglitz is saying that the imbalance between people owing money and people lending money needs to be corrected because there could easily be another bubble just waiting to burst again.
