When Northern Rock first ran into trouble in the autumn of 2007, worried customers queued outside branches from the early hours in an attempt to get their money out. ‘This is the first run on a British bank since Mary Poppins,’ said someone. It was one of those easy jokes which succinctly sum up what is going on. In the film Mary Poppins the run on the bank is a mistaken one, triggered by a child loudly demanding the return of the money which a benign father has banked for him. The idea that depositors might lose their money in Northern Rock was equally mistaken.
The credit crunch has been a difficult but exciting time for financial journalists. After all, chaos and crisis are what we journalists really enjoy most. It has also been a baffling time. Almost any expert you cared to call had no real idea what was going to happen next and what the best remedy might be. But friends and family, and sometimes total strangers, tended to ignore this. A financial journalist ought, they thought, to know some of the answers. In fact the only wisdom I could offer was that an understanding of human nature was likely to be a better guide than economics. The last thing which would be of any use was books on business or management. Almost universally these are worthless, though occasionally enjoyable. But still people wanted help in understanding what might happen next, or what was happening day-to-day.
And for that there were really only two things I could provide. I could hand them my dog-eared paperback copy of J. K. Galbraith’s The Great Crash, 1929, which provides an astonishingly vivid account of what happened the last time around and which makes it clear that almost everything that happened then is also happening now. Then as now, bankers tried to save their own skins and politicians filled the air with pledges, overarching solutions and grandiose schemes.
But the book which best fits the bill is one which has long been
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