Sunday Telegraph names Trouble with Markets 'Economics Book of the Year' (December 2009)

"Compelling prescriptions from an economist unusually able to speak with authority - because unlike most of his peers, Bootle spotted that the boom was unsustainable."
Robert Peston, BBC Business Editor and author of Who Runs Britain?

“This book will stand out in the explosion of financial crisis literature.

Roger Bootle is one of the top, practical economists in the financial world

but he is not afraid to tackle the bigger, deeper questions around the future of capitalism, the role of markets and government.”

Vince Cable, MP, and author of The Storm: The World Economic Crisis and What it Means

 "An excellent explanation of what led to the 'Great Implosion' ... what marks this book out is the admirable care that Bootle has taken to address concerns that a reader who is new to the top might have. Bootle is also diligent in shooting down some of the most common canards that have flapped their way through the crisis. A clear and cogent guide to the problems - and the solutions - that lie ahead.”

Financial Times

“In his last book, Money For Nothing, Roger Bootle predicted with great accuracy the property crash and subsequent financial crisis. In The Trouble With Markets, he offers us a way out of the almighty mess that excessive debt created. It should be made compulsory reading for all policy-makers.”

Jeff Randall, Sky News business presenter and Daily Telegraph’s editor-at-large

“Roger Bootle knows how markets work, and also when they don't work.

Everyone who wants a real understanding of the strengths and weaknesses

of the market economy should read this book.”

John Kay, leading economist, Financial Times columnist and author of The Long and The Short of It

"Bootle has skilfully assembled all the elements of the crisis: its causes in financial deregulation and global imbalances, the pros and cons of a monetary versus fiscal stimulus, and how to design a system that can avoid repeating such disasters.

Bootle's explanation of the crisis emphasises the relationship between the east Asian (especially Chinese) "saving glut" and the American "money glut", which he rightly regards as two sides of the same coin.

The crescendo of Bootle's criticisms of bankers, regulators and credit-rating agencies culminates in a well-directed attack on the economists, especially those at Chicago University, who taught that markets know best, and that governments should stay out of economic life.

Bootle robustly engages with those monetarists who believe that printing money is a sufficient condition of recovery. As he points out, this presupposes a stable relationship between the supply of money and the demand for loans.

Bootle goes through the conventional roster of reform projects, adding neat touches of his own.

There is a good discussion of macro policy. Bootle is rightly critical of the large deficit incurred by this government before the crisis struck, which left it in a weak position from which to expand the deficit to deal with the downturn."
Review by Robert Skidelsky, The New Statesman. Lord Skidelsky, Emeritus Professor of Political Economy at the University of Warwick, is the author of Keynes: the Return of the Master.

"The Trouble with Markets is a good run across the desolate battlefields of financial markets after two years of meltdown. Bootle bayonets the wounded brutally and efficiently. He writes fluently, his instincts are sound and his criticisms mainly well-based."

Management Today

"A brilliant book that puts markets in stunning perspective. Once again, Roger Bootle tackles, head on, some of the toughest economic questions of our time.
An extraordinarily penetrating and absorbing analysis."
Sir Brian Pitman, Former Chairman, Lloyds TSB Group

“The Trouble with Markets has a fair claim to the status of must read. Clearly and compellingly written, provocative in its critique and with many suggestions for reform, The Trouble with Markets will command attention from practitioners and lay readers alike."
Review by Bill Jamieson, Executive Editor The Scotsman, in The Spectator

“Society has always had to grapple with the market’s imperfections and to tame them. In order to save capitalism from itself we now have to do this with the financial sector. Such a thought will offend those who tend the flame of the pure free market ideal. But the market was made for man, not man for the market.”

 

The Trouble With Markets is a trenchant, topical and thought-provoking exploration of both our economic future and the future of the market system itself.

 

The crisis did not have one cause but many – greedy bankers and naïve borrowers, mistaken central banks and inept regulators, insatiable Western consumers and over-thrifty Chinese savers. But underlying all these there was a single super-cause –

the idea that the markets are always right and consequently that they can be left alone. Belief in this idea not only explains the extreme risks that both banks and borrowers took, but also the passivity and insouciance of central banks and regulators in letting them get on with it.

 

Indeed, the “Great Implosion” has revealed not only the markets’ excessive risk-taking and how fragile the financial system is, but also how bloated the financial sector has become. It has demonstrated a failure of the market with regard to the setting of executive compensation in general, and pay in the financial sector in particular.

 

The result has been the revelation of a financial sector hell-bent on pursuing its own profit, while imperilling not promoting the public good, and a system of corporate governance where managers have been pursuing either their own interests, or the short-term performance of the share price – which often came to the same thing.

 

Bootle, one of the City’s best-known economists, not only offers a serious critique of

the free-market mindset, but also a plan for radical reform of the system and a way out of the economic mess. Despite some signs of recovery, the economic outlook in the real economy is for an extended period of weakness amounting to a depression. And while so many people worry about a resurgence of inflation, the greatest threat is the emergence of sustained deflation.

 

It will only be possible to get back to full employment and stability if China leads the super-saving countries by changing course to a policy of increased domestic demand. In order to persuade her to do this, China needs to be offered both a seat at the top table and a change in the international position of the dollar. Ironically, the excesses of cowboy capitalism could lead to the evolution of a global money and to the beginnings of global governance.

 

With his trademark clarity and acerbic wit, Roger Bootle’s new book lays out the pathway for saving capitalism from itself.

 

Roger Bootle is one the City’s top economists, and has worked in or around the financial markets since 1978. He is a regular columnist for The Daily Telegraph and also appears frequently on national television and radio. His now classic bestseller The Death of Inflation, originally regarded as extreme is now widely recognized as prophetic.

 

As well as being the founder and Managing Director of Capital Economics, he is also Economic Adviser to Deloitte, a Specialist Adviser to the House of Commons Treasury

Committee and an Honorary Fellow of the Institute of Actuaries. He was formerly Group Chief Economist at HSBC, and under the previous Conservative government he was appointed one of the Chancellor’s panel of economic forecasters, the so-called “Wise Men”. He studied Economics at Oxford, and began his career in the academic world as a lecturer in Economics at St Anne’s College, Oxford. www.capitaleconomics.com

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