Economic Perspectives with Hopeton Hay on KAZI 88.7 FM in Austin, TX

Today’s Financial Crisis Explained By Lesson From Great Depression Focus of January 26 Economic Perspectives

Posted by Hopeton on January 22, 2009

What lesson from the Great Depression can best illuminate today’s financial crisis? That neither lordsoffinance300dpiwas caused by an “Act of God” or the dark side of capitalism. Instead, in each case, it was the flawed judgments of a few key individuals argues Liaquat Ahamed, author of LORDS OF FINANCE: The Bankers Who Broke the World , who will be a guest on the January 26 edition of Economic Perspectives.

In a remarkably timely history that sheds light on today, Ahamed tells the fascinating story of how the Great Depression resulted from a series of catastrophic blunders of four powerful central bankers of the Jazz Age: Benjamin Strong in the U.S., Montagu Norman in England, Hjalmar Schacht in Germany and Emile Moreau in France. These powerful but flawed men straitjacketed the global economy by returning it to the gold standard and created a devastating bubble by holding down U.S. interest rates and keeping Germany afloat on borrowed money. “More than anything else…the Great Depression was caused by a failure of intellectual will, a lack of understanding about how the economy operated”, Ahamed writes.

Liaquat Ahamed has been a professional investment manager for 25 years. He has worked at the

Liaquat Ahamed

Liaquat Ahamed

World Bank in Washington D.C. and the New York based partnership of Fischer Francis Trees and Watts, where he served as Chief Executive. He is currently an adviser to several hedge fund groups, including the Rock Creek Group and the Rohatyn Group, is a director of Aspen Insurance Co. and is on the board of Trustees of the Brookings Institution. He has degrees in economics from Harvard and Cambridge Universities. His writing has appeared in Tina Brown’s The Daily Beast and Reuters.

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