21 Books That Don't Know What Caused The Financial Crisis

If someone tells you they know what caused the financial crisis – especially if they are from Hollywood and/or wear a baseball cap – don’t believe them. Andrew Lo, a finance professor at the MIT Sloan business school, wrote a review of 21 books on the financial crisis and concluded that we can’t even agree on the facts surrounding the crisis, much less interpret them. In one of the better insights of the paper he says:

While journalistic accounts of the crisis have the flaws of their genre—they are necessarily subjective, often moralistic, and they may attempt to shape a narrative beyond what the facts will strictly bear—the accounts of economists and policymakers may have their own form of biases.

The entire paper is only 36 pages long and you can skim it pretty easily. What is really interesting in the paper is what books he chose to review and some of the irrefutable conclusions that are easily refuted. As with most academics he concludes that more research is needed – i.e. give government funding to a bunch of professors for a long time so they can study more stuff and write more papers. This is known as the academic job security ploy.
I saw Andrew Lo interviewed on MSNBC last week and he easily dispelled several myths about the financial crisis that the media and the government have latched onto. It’s well worth sitting through the 15 second commercial and spending 3 minutes watching:

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