What We Are Reading Today: A Crisis of Beliefs

Updated 17 September 2018

What We Are Reading Today: A Crisis of Beliefs

AUTHORS: Nicola Gennaioli and Andrei Shleifer

The collapse of Lehman Brothers in September 2008 caught markets and regulators by surprise.

Although the government rushed to rescue other financial institutions from a similar fate after Lehman, it could not prevent the deepest recession in postwar history.

A Crisis of Beliefs makes us rethink the financial crisis and the nature of economic risk, says a review on the Princeton University Press website.

In this comprehensive book, two of today’s most insightful economists reveal how our beliefs shape financial markets, lead to expansions of credit and leverage, and expose the economy to major risks.

Nicola Gennaioli and Andrei Shleifer carefully walk readers through the unraveling of Lehman Brothers and the ensuing meltdown of the US financial system, and then present new evidence to illustrate the destabilizing role played by the beliefs of home buyers, investors, and regulators.

They present a new theory of belief formation that explains why the financial crisis came as such a shock to so many people — and how financial and economic instability persist.


What We Are Reading Today: Privilege and Punishment by Matthew Clair

Updated 27 November 2020

What We Are Reading Today: Privilege and Punishment by Matthew Clair

The number of Americans arrested, brought to court, and incarcerated has skyrocketed in recent decades. Criminal defendants come from all races and economic walks of life, but they experience punishment in vastly different ways. Privilege and Punishment examines how racial and class inequalities are embedded in the attorney-client relationship, providing a devastating portrait of inequality and injustice within and beyond the criminal courts.

Matthew Clair conducted extensive fieldwork in the Boston court system, attending criminal hearings and interviewing defendants, lawyers, judges, police officers, and probation officers. In this eye-opening book, he uncovers how privilege and inequality play out in criminal court interactions.

When disadvantaged defendants try to learn their legal rights and advocate for themselves, lawyers and judges often silence, coerce, and punish them. Privileged defendants, who are more likely to trust their defense attorneys, delegate authority to their lawyers, defer to judges, and are rewarded for their compliance.

Clair shows how attempts to exercise legal rights often backfire on the poor and on working-class people of color, and how effective legal representation alone is no guarantee of justice.

Superbly written and powerfully argued, Privilege and Punishment draws needed attention to the injustices that are perpetuated by the attorney-client relationship in today’s criminal courts, and describes the reforms needed to correct them.