Financier Jeffrey Leeds talks with Liaquat Ahamed, author of the acclaimed Lords of Finance

Financier Jeffrey Leeds talks with Liaquat Ahamed, author of the acclaimed Lords of Finance, about why the bear market is actually a good thing—and how much longer it will last.

Your book is in large part about the importance of the individuals who managed—or mismanaged—the global economic crisis that arose after 1914 and that led to the Great Depression. How did the managers of our economy err this time around?

The central theme of my book is that a group of people had ideological blinkers. The question is did they, this time around, have a different set of ideological blinkers that prevented them from seeing what was happening. Secondly, more importantly this time than last time, is the element of hubris. They were so successful weathering storm after storm, including the storm after the dot-com crash. So, I do think the people who ran economic policy, Alan Greenspan, people who had been in the Clinton administration, people who have come afterward, really thought they knew how to keep the car on the road. And they didn’t.

The economy responded to things as predicted. For example, let's take the Asian crisis. They went in and came up with a policy, they threw a lot of money at the problem, a lot of people told them it would be a disaster, and lo and behold a year later Asia was recovering. They sort of patted themselves on the back. Then, the same story with the dot-com bubble. ..