Top Menu

The ABCs of the Economic Crisis: What Working People Need to Know


The economic crisis has created a host of problems for working people: collapsing wages, lost jobs, ruined pensions, and the anxiety that comes with not knowing what tomorrow will bring. Compounding all this is a lack of reliable information that speaks to the realities of workers. Commentators and pundits seem more confused than anyone, and economists—the so-called “experts”—still cling to bankrupt ideologies that failed to predict the crisis and offer nothing to explain it.

In this short, clear, and concise book, Fred Magdoff and Michael D. Yates explain the nature of the economic crisis. Contrary to conventional wisdom, the authors demonstrate that this crisis is not some aberration from a normally benign capitalism but rather the normal and even expected outcome of a thoroughly irrational and destructive system. No amount of tinkering with capitalism, whether it be discredited neoliberalism or the return of Keynesianism and a “new” New Deal, can overcome the core contradiction of the system: the daily exploitation and degradation of the majority of the world’s people by a tiny minority of business owners.

While the current economic maelstrom has laid bare the web of greed, corruption, and propaganda that are central to capitalism, only an aroused public, demanding the right to health care, decent employment, a secure old age, and a clean and healthy environment, can lead the United States and the world out of the worst crisis since the Great Depression and toward a system of production and distribution conducive to human happiness. This book is aimed primarily at working people, students, and activists, who want not just to understand the world but to change it.

Rich, powerful, highly-educated people created the economic crisis of 2008–09, while hundreds of millions of working people suffer the consequenceslost homes, lost jobs, rising insecurity, and falling living standards. How could this happen? In The ABCs of the Economic Crisis, Fred Magdoff and Michael Yates tell the story clearly, simply, and briefly. Here’s one way to become part of the solution: think hard about everything Magdoff and Yates write in this book.

—Robert Pollin, Professor of Economics and Co-Director, Political Economy Research Institute (PERI), University of Massachusetts, Amherst

Fred Magdoff and Michael Yates have written a sorely needed and extremely clear guide to the economic crisis. They pull back the curtains to reveal the role and power of the Wall Street financial interests and the economic policies that brought us to this point. The book is both a quick read and a clear, easy-to-understand explanation of the economic system and how it has been rigged to benefit corporate and financial interests at the expense of working people. The glossary alone is worth the price of the book but the chapter detailing the role and influence of Wall Street in the U.S. government is invaluable.

—Carol Lambiase, UE Education Director and International Representative

Clear and well written! The ABCs of the Economic Crisis also includes the XYZs. Magdoff and Yates’s systemic analysis of the crisis shows both how and why the crisis occurred, while pointing to the kind of actions required to prevent a repetition.

—Michael Perelman, Professor of Economics, California State University, Chico

Despite the severity of the current economic crisis, few people have been able to explain what has happenednot just the technical details of the housing market, but the larger economic trends that impact wages, employment, and equality. Yates and Magdoff provide a sharp analysis of how we got to this moment and how most of the proposed solutions will do little to change the deeper underlying problems most people have been facing not just in the last year, but in the last several decades. Clear, accessible, and timely, this book will be a valuable resource for anyone trying to understand our economy.

—Stephanie Luce, Associate Professor, Labor Center of the University of Massachusetts, Amherst

Fred Magdoff taught at the University of Vermont in Burlington, is a director of the Monthly Review Foundation, and has written on political economy for many years. He is most recently the author (with John Bellamy Foster) of The Great Financial Crisis: Causes and Consequences (Monthly Review Press). Michael Yates is associate editor of Monthly Review and editorial director of Monthly Review Press. He is the author of Why Unions Matter (Second Edition), and Cheap Motels and a Hot Plate (both Monthly Review Press).

Publication Date: September 2009

Number of Pages: 144

Paperback ISBN: 9781583671955

eBook ISBN: 9781583674024