Summary Of Barry Eichengreen's Hall Of Mirrors

“Hall of Mirrors: The Great Depression, The Great Recession, and the Uses-and Misuses of History” by Barry Eichengreen is an analytical book that compares and analyzes the two biggest financial crisis in history; the Great Depression and the Great Recession. The author is one of the few people that has gone to such great lengths to both explained and speculated as to why things happened the way they did during the two crisis and how society learned from most of their mistakes during the Great Depression but repeated others. It provides the reader with some deep critical thoughts as to whether or not society is better equipped for another financial crisis or will history keep repeating itself?
The book was very well written, and informative for someone who had only the basic understanding of the two crisis, what
exactly happened and the similarities that the two crisis shared with each other. For example, both financial crisis were due to the crashes of the stock markets and the real estate market. And how both crisis had the same type of pattern leading up to the crash but yet the Great Recession was still a surprise to most and become a financial crisis. Eichengreen claims that more could have been done to prevent the Great Recession and that it was the policymakers and the Government that were at least partly at fault for the Great Recession. Eichengreen was slightly sympathetic and understanding to the government and policymakers in the 1930’s which I agree with because this had never happen to them before and they were doing what they thought was right at the time, with no one to guide them. Some things could have been done better but they did the what they thought was best during that time. However, in 2008, people should have realized that another financial crisis was upon them, especially since both had such similar patterns. They had history to look back upon and learn from the mistakes that were made then and than make sure they did not repeat. Yet, they did not catch the crisis in time and once they did look towards history for answers, it seemed to only hinder rather than help. Therefore, Eichengreen claim that the fault lies with the policymakers has some credibility towards it. In the 1930’s, at the start of the Great Depression, there was a lack of regulation and nobody really knew how to respond to the situation. Which is most likely one of the reasons this crisis lasted as long as it did. There was a lack of accountability in the office and people were dissatisfied with the president, Herbert Hoover’s, lack of action during this crisis which led to a change of office to Franklin Delano Roosevelt. Who then took immediate action in fixing the banking system and creating new regulations and reforms. In 2008, policy makers and the President administration believed that they knew enough to prevent the a repeat of history and responded immediately but it still was not enough. They came to the wrong conclusions and tried to fix the wrong thing like the banking system but that was not the main problem this time. Then when they thought the problem was fixed, they stopped too soon which just led society into a bigger recession which ensured slower results.
So the main question now is whether or not we are better prepared to handle another financial crisis. Eichengreen seems to think that we are relatively more prepared for another financial crisis as long as we do not repeat the same mistakes. It seems that society today, at least has the resources to react in a more improved manner which he illustrates in his book. He shows the comparison between the two crisis and how the Great Recession could have been sooner detected and fixed before it turned into a crisis. However, he also explains that even with all that information, the policymakers and government drew the wrong conclusions which resulted into a longer recession. Another main argument that Eichengreen makes is that policymakers should have seen the Great Recession coming which I can agree with.
However, I think it is hard to react the correct way once the crisis is actually happening. The most effective way to prepare may be to make sure research is being done and use past information and data to come up with the best solution. However, it is also best to form a solution that works the best for the crisis that is happening rather then trying to fix it the same way that was done previously. Therefore, if another financial crisis ever occurs, people should recognize the similar patterns and use history to avoid repeating it. I believe we are more prepare for another crisis then we were in the past but we were never 100 percent be ready. Because although the crisis may be similar, they all are different which will require the crisis to have their own unique solution to solve the issue. Therefore, I came to the conclusion that it is hard to prepare for the unknown but that patterns do repeat themselves and as long as one makes smart and educated decisions, then we are indeed better prepared then we were in the
past. “Hall of Mirrors:The Great Depression, The Great Recession, and the Uses-and Misuses of History” by Barry Eichengreen is an excellent way for someone to get a better understanding of the Great Recession and the Great Depression. The book was incredibly well done and was very informative. The way Barry Eichengreen uses a comparative method between the two financial crisis is very helpful in explaining the similarities and differences between them. The only issue is that the book is a bit difficult to understand with all the policies and with following with what exactly is happening but it is very informative. It is well worth the read if someone wishes to understand more about the two crisis and offers many great points and arguments that will really inspire some critical thinking.