Capturing the financial crash of 2008 and its aftermath in 200 pages is a commendable task. Ramaa Vasudevan has managed to write a book which does this even while holding the reader’s attention and without compromising on academic rigour.

Things Fall Apart analyses what caused the crash, how it unfolded and how its after-effects are still being felt five years later.

The book starts off with the eventful week that year between September 8 and 16, when Freddie Mac and Fannie Mae were nationalised, Lehman Brothers collapsed, AIG was bailed out, and Bank of America acquired Merrill Lynch.

It traces the evolution and operation of complex financial instruments such as collateralised debt obligation (CDO), mortgage-backed securities (MBS) and credit default swaps (CDS) to provide a context for the crash.

While the collapse may have had its roots in the US, it triggered a crisis in the Eurozone. The cascading of issues in the interconnected global economy is analysed and the lingering effects on the financial system are outlined.

The accompanying graphs and figures are clearly presented, lending more punch to the text. The publisher has thoughtfully placed the text and related graph on the same page to provide a smooth reading experience. The block diagram describing the structure of complex financial instruments will appeal to a wider audience. Popular instruments such as Brady bonds are also described in simple terms; the explanation of why they were launched and how they operate provides interesting insights.

Drilling down to the root of the crisis, the book cites financialisation at the primary cause. Using multiple examples and time-series data, it points to a growing trend towards financialisation in the years leading to the crisis. For instance, as the share of finance in GDP increased, the wage premium — after adjusting for education, skill and risk factors — in the financial sector rose from near-zero in the early 1980s to 40 per cent by 2005. Similarly, the average bonus of Wall Street managers rose from $14,000 in the 1990s to a peak of $191,000 in 2006.

Parallels are drawn with the Great Depression in the various trends observed before the crash. For instance, the income share of the top 1 per cent of households was around 23 per cent at the peak before 1929 and this level was attained again only in 2006, after falling steadily to under 10 per cent in the 1970s.

In the aftermath of the meltdown, the dollar’s position as the reserve currency has brought the crisis home to various countries. Outlining the Eurozone crisis, the book discusses the limitations faced by the European Central Bank (ECB) in its efforts to regulate liquidity, as it was not allowed to buy the sovereign bonds of its members.

The impact of China, the role of the IMF and the return of financialisation after the crisis are highlighted, providing an all-round view. It dwells on the ‘Occupy Wall Street’ movement and other protests expressing outrage against the growing inequality in society.

The prose is easy and the book moves at a racy pace. Terms such as ‘sleight of hand’, ‘orchestrating a rescue’ and ‘dismantling of financial market regulation’ help paint a vivid image in the reader’s mind. The author avoids the trap of the two-handed economist — talking about positives on one hand and adverse effects on the other — and merely gives facts that align with the conclusion.

This, however, may also be the book’s undoing. The author’s stance against neoliberal policies and the lack of counter-evidence is unsettling. Also, while the book offers insights into economies such as Iceland and Baltic countries, there is no mention of India. A small section on India would have served as a satisfying dessert after an elaborate meal.

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