Five years ago, Charles Morris, a banker-turned-writer, produced a compelling and highly prescient book. It pointed out all the problems with subprime mortgages and credit derivatives several months before the crisis at Lehman Brothers. To my mind, that made it one of the most lucid and timely accounts of the mess in the western financial system (the title was The Trillion Dollar Meltdown, later revised to The Two Trillion Dollar Meltdown, as the disaster got worse).
Earlier this year, Morris published another book. And with the fifth anniversary of that Lehman disaster looming, it is worth taking note of this new tome - and what it reveals about the current mood in America. For Morris's latest offering, Comeback, is distinctly optimistic. Yes, you read that right: the man who first revealed the rotten excesses in western finance is now forecasting “America's new economic boom”, to cite the book's subtitle.
This is not, let me stress, because Morris thinks that those troubled banks have been truly fixed; finance remains riddled with flaws. But what has happened, he suggests, is that the problems in the banks are being dwarfed by developments elsewhere. Most notably, America is heading for a potential industrial renaissance on the back of an energy boom, centred on shale gas, Morris says. If that can be combined with some modest reforms to healthcare and a little infrastructure spending, then America could also be poised to see a golden streak of growth that might even resolve the seemingly intractable problem of the national debt.