Powerful ideas from top nonfiction
Try Blinkist to get the key ideas from 7,000+ bestselling nonfiction titles and podcasts. Listen or read in just 15 minutes.
Start your free trial
Blink 3 of 8 - The 5 AM Club
by Robin Sharma
Listen to the Intro
Fault Lines summary
Raghuram G. Rajan
How Hidden Fractures Still Threaten The World Economy
20 mins
Brief summary
Fault Lines by Raghuram G. Rajan is a non-fiction book that explores the root causes of the 2008 global financial crisis, focusing on interrelated failures of the financial and political systems. Rajan argues for policies that address inequality and tackle the underlying structural issues.
Table of Contents
Fault Lines
Summary of 9 key ideas
Audio & text in the Blinkist app
Key idea 1 of 9
The advent of cheap loans was one fault line of the crisis, and banks and politicians were complicit.
One of the most significant fault lines that led to the global financial crisis was growing income inequality in the United States.
In the years leading up to the crisis, the wage gap grew. While the average income of top earners increased, the average median income stayed nearly the same. For example, in 1997, the median household income was $51,704, yet by 2009, it had barely budged to $52,196.
Why the growing gap? Basically, the country’s workforce couldn’t meet the labor demands of the market. America needed more and more highly educated people to work in the growing technological sector, but schools weren’t producing enough qualified candidates.
This drove the top income level up while the median stagnated. It also explains why the income gap was strongly related to education level: In 2008, the median income of a high school graduate was $28 per hour, while the median for a college undergraduate was $48, some 72 percent more.
Every worker is a potential voter, of course; so U.S. politicians sought to do something about the problem. Seeing that their electorate needed more money, they encouraged cheap loans.
With the support of politicians, banks began expanding easy credit, especially to low-income households. This so-called subprime lending, which we'll look at more closely later became popular, while interest rates were lowered.
The immediate positive effects were straightforward: more spending meant more growth. Yet the growth was fueled by debt. People were essentially just postponing paying their bills.
And as you'll see in the following blinks, this American spending spree didn’t just affect the United States but also the rest of the world.
Want to see all full key ideas from Fault Lines?
Key ideas in Fault Lines
More knowledge in less time
Read or listen
Get the key ideas from nonfiction bestsellers in minutes, not hours.
Find your next read
Get book lists curated by experts and personalized recommendations.
Shortcasts New
We’ve teamed up with podcast creators to bring you key insights from podcasts.
What is Fault Lines about?
In Fault Lines, author Raghuram Rajan unveils the global economy’s hidden fractures that led to the 2008 financial crisis. These blinks show that greedy bankers weren’t the only ones to blame; our economic system had deep systemic flaws as well. Importantly, they outline what we can do as a society to prevent similar crises in the future.
Fault Lines Review
Fault Lines (2010) by Raghuram G. Rajan is a thought-provoking exploration of the underlying causes of the 2008 global financial crisis. Here's why this book is definitely worth your time:
- It offers a fascinating analysis of the faults in the financial system, shedding light on how various factors contributed to the crisis.
- By delving into the interplay of economics and politics, the book unveils the complexities surrounding the crisis, allowing readers to grasp its full implications.
- Rajan's ability to present complex concepts in accessible terms ensures that even those without an extensive background in finance can understand and appreciate the book.
Best quote from Fault Lines
What is best for the individual actor or institution, is not always best for the system.
—Raghuram G. Rajan
Who should read Fault Lines?
- Anyone who wants to understand the financial crisis of 2008
- Anyone curious how future economic crises could be prevented
- Anyone interested in global economics or international trade
Categories with Fault Lines
Book summaries like Fault Lines
People ❤️ Blinkist
Sven O.
It's highly addictive to get core insights on personally relevant topics without repetition or triviality. Added to that the apps ability to suggest kindred interests opens up a foundation of knowledge.
Thi Viet Quynh N.
Great app. Good selection of book summaries you can read or listen to while commuting. Instead of scrolling through your social media news feed, this is a much better way to spend your spare time in my opinion.
Jonathan A.
Life changing. The concept of being able to grasp a book's main point in such a short time truly opens multiple opportunities to grow every area of your life at a faster rate.
Renee D.
Great app. Addicting. Perfect for wait times, morning coffee, evening before bed. Extremely well written, thorough, easy to use.
People also liked these summaries
4.7 Stars
Average ratings on iOS and Google Play
31 Million
Downloads on all platforms
10+ years
Experience igniting personal growth
Fault Lines FAQs
What is the main message of Fault Lines?
The main message of Fault Lines is that economic inequality and political polarization are closely intertwined.
How long does it take to read Fault Lines?
The reading time for Fault Lines varies depending on the reader's speed, but it typically takes several hours. However, the Blinkist summary can be read in just 15 minutes.
Is Fault Lines a good book? Is it worth reading?
Fault Lines is worth reading as it provides insightful analysis on the causes and consequences of economic crises.
Who is the author of Fault Lines?
The author of Fault Lines is Raghuram G. Rajan.
What to read after Fault Lines?
If you're wondering what to read next after Fault Lines, here are some recommendations we suggest:
- This Is How They Tell Me the World Ends by Nicole Perlroth
- Pegasus by Laurent Richard and Sandrine Rigaud
- The Fund by Rob Copeland
- Elon Musk by Ashlee Vance
- Visual Thinking by Temple Grandin
- 7 Strategies for Wealth & Happiness by Jim Rohn
- 100 Ways to Change Your Life by Liz Moody
- Be Seen by Jen Gottlieb
- The Future Is History by Masha Gessen
- A History of Fake Things on the Internet by Walter Scheirer