An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy

After World War II, there was a level of optimism in government control of the economy. It was thought that government had the levers to be able to easily maximize employment and minimize inflation. Government social welfare programs provided a safety net, while the private sector provided gainful employment opportunities. The optimism seemed boundless. Civil rights movements were able to seek out enfranchisement and rights because of the great stability.

Then around 1973, everything started to unravel. Inflation started to rear its ugly head. People begin to rebel against high taxes and ineffective government. (Turns out those tax and spend levers could easily be turned up when needed, but turning them down when conditions improved was a little more challenging.) 

The "third world" had its own problems. Import substitution was a popular mechanism for ramping up an economy. Unfortunately, while this did help some industries, it left consumers with more expensive, low-cost goods. Governments also took in large amounts of loans for development projects. They were seen by the banks as sure things that would build up infrastructure that would easily be paid back. Alas, there was a large amount of graft and inefficient usage. Currency devaluation provided the nail in the coffin that led to devaluation.

Nixon brought in Arthur Burns (a Democrat) as an economic advisor. He ushered in the age of the fed as the "controller of the levers" in the economy. However, he was still learning the way. 

People became disenchanted with government intervention. Reagan and Thatcher road this disenchantment to office. They preached small government and deregulation. Alas, this approach did not return things to the "golden age".

The book has some interesting analysis, but an overly broad thesis results in a lack of focus. Government lost its ability to control, but nothing else seemed to work better. This scope allows for pretty much anything in the past half century.