Jack Rasmus. Epic Recession: Prelude to Global Depression.

Iqbal, Nasir

Jack Rasmus. Epic Recession: Prelude to Global Depression. New York: Pluto Press. 2010. 340 pages. Paperback. 22.50 [pounds sterling].

The global financial crisis that erupted in the United States in August 2007 has spread rapidly from housing to other credits markets across the globe. This financial crisis has pushed the world into deep recession and the recessionary period now seems to have prolonged. This book, based on extensive research and deep analysis, attempts to identify the problems that now all the US economy, find the causes of such problems and offer some solutions. Rasmus draws upon the history of economic crises to show that the current predicament facing the US economy is neither a full blown depression, nor a short lived contraction to be followed by swift recovery. He fears that the US economy has by now faced an extended period of stagnation which may well descend into even a depression. The author argues that the only way to prevent the onset of the'feared depression is to radically restructure the economy through a massive job creation programme, nationalisation of the mortgage and consumer credits markets, introduction of new banking and tax regimes, and long run redistribution of income thorough better healthcare and retirement benefits.

Rasmus also conducts an analysis of the periods of depressions and recessions which the world has faced during the course of the 20th century. He identifies the common structural features and the differences in these periods of depressions and recessions. Employing this analysis, he comes up with a theory of epic recession, which is rich in explanatory power and predictive value. He identifies the quantitative as well as the qualitative characteristics of epic recession. The quantitative ones include: depth of the economic decline, its duration, the level of debt and deflation. On the other hand, financial instability and fragility, a large shadow banking system, consumption fragility, a shift to speculative investment and global synchronisation of the crises, are listed among qualitative characteristics. After drawing lessons from history, Rasmus makes a good attempt to explore the roots of the current recession, which he terms 'Epic Recession'.

He takes both the Bush and Obama administrations to task for injecting inadequate moneys into markets that could not put them on the recovery path, and then puts forth his own recovery programme which involves a radical restructuring of the US economy.