Paul Krugman is a Nobel laureate economist and highly opinionated writer for the New York Times. He's had sharp shooter like accuracy for calling the housing bubble, stimulus package size, and the catastrophe of the Bush years. Whether you think he's a genius or partisan swine, he at least has the credentials to write about the current economic situation. And what he writes is quite disturbing.
In Return of Depression Economics and the Crisis of 2008, Krugman argues we're back in the 1930s. The lesson: we need to look back in history to get back to prosperity and an economy that creates jobs instead of bread lines. Since Krugman stands at the intersection of policy and economics, the analysis and stories are all from that view. You get a quick overview of financial crisis from Argentina to small Asian countries like Thailand. Then you learn what their economy was like, what the central bank can do, what the central banks did, how the IMF interacted, and the end result. For example, a country can either get a stable currency with limited monetary policy options or a fiat money system with a stronger central bank. What do you choose? Advanced countries shoot for a fiat currency while those with a weak currency peg their currency against the dollar. The whole book is a crammed lesson on global macro economics and central bank policies. All these examples allow Krugman to cultivate a case for the current financial crisis of 2008 and the return of Keynesian economics.
Most of the previous crisis' stories were told in relative isolation. You read about how the Asian crisis in the 1990s started in southern Asian countries and then moved up to damage South Korea's economy, but at least it was contained within Asia. Krugman then examined Mexico's central bank policies that ultimately affected Argentina, again limited to South America. Then we see that the rules changed in the past 10 years due to globalization, and the resulting destruction happening right now. This is why Return to Depression Economics is a somber yet essential read. This book illuminates you as to why more pain is coming. It gives insight as to why the fed is doing what it has been doing, and what we should be doing based on history. You gain a little more understanding of the insane complexity that is our economy and how we got here. If you really want to at least have a glimmer of hope as to comprehend what's going on and don't know where to start, read this book.