The 1980s opened with the prime interest rate at an astonishing21.5 percent, leading to a severe recession with unemploymentreaching nearly 11 percent. Depression-like conditions befell theagricultural sector, a bubble burst in the energy sector, a rollingreal estate recession swept the country, the entire thrift industrywas badly insolvent and the major money center banks were loadedwith third world debt. Some 3,000 bank and thrifts failed,including nine of Texas' 10 largest, and ContinentalIllinois, which, at the time, was the 7thlargest bank inthe nation. These severe conditions were not only handled withoutcreating a panic, the economy actually embarked on the longestpeacetime expansion in history.
In Senseless Panic: How Washington Failed America,William M. Isaac, Chairman of the Federal Deposit InsuranceCorporation (FDIC) during the banking and S&L crises of the1980s, details what was different about 2008's meltdown thatallowed the failure of a comparative handful of institutions tonearly shut down the world's financial system. The book alsotells the rousing story of Isaac's time at the FDIC. Withaccessible and engaging prose, Isaac:
* Details the mistakes that led to the panic of 2008 and2009
* Demystifies the conditions America faced in 2008,and
* Provides a roadmap for avoiding similar shutdowns andpanics in the future
Senseless Panicis a provocative, quick-paced, andthoughtful analysis of what went wrong with the nation's bankingsystem and a blunt indictment of United States policy.