The Decline and Fall of the U.S. Economy

This highly original book puts the crash of 2008 into a broad perspective by digging deeply into the misguided theories behind the policies that allowed it to happen.

Who was responsible for the 2008 crash? The Decline and Fall of the U.S. Economy: How Liberals and Conservatives Both Got It Wrong makes it clear that both parties were at faul—and explains how and why. This broad and far-reaching book is the first to analyze the crash from the perspective of evolution, or "punctuated equilibrium." As it explains, the punctuated boom brings on change, the bust leads back to a tightly constrained equilibrium. Both conditions pose risks and both—as William McDonald Wallace argues—can be managed to reduce the odds that economic imbalances will arise.

Focusing on the policies that created bubbles in housing, stocks, and more, Wallace pinpoints historical events that gave rise to unrealistic theories and ideologies, showing how they, in turn, gave rise to policies that led to collapse. He explains how Darwin's now-discredited theory of "uniformitarianism" (evolution as a continuous, smooth process) led economists to ignore how evolution actually influences economies and economic behavior, and he shows what we can do so it doesn't happen again.