5 comments about The Great Depression of Debt: Survival Techniques for Every Investor.

1. What a cop out! Now that his 2007-2020 Second Great Depression has failed to materialize with 2008 2/3rds over, it is being repackaged as a newly titled "debt" book. A warm welcome Warren to the rather full club of authors who predicted disaster on a timeframe that didn't happen. You failed simply because you ignored the greatest force in the economy - the consumer. Every economist knows that the GDP is made up 90%+ by consumer spending - 60-70% directly plus government spending of the 28% of income they take in taxes. In other words GDP is ALWAYS driven by demographics over the longterm. There IS a monstrous crisis coming based on demographics however - go read Arnold's The Great Bust Ahead (published 2002), in which all his predictions have come to pass so far and the "big one" left is yet to come on his 2010-2012 schedule.



2. With all of the doom and gloom in our financial markets, I wanted to take in a few authors opinions and try and come to my own conclusion. (Cramer is not my fortune teller) With that said, the author lays out a lot of the structural problems in the financial industry and predicts what he think will become of it. He has updated the original version to include some of the latest information as well gloat (rightfully so) over being right on about 80% of his predictions.
   
   The more I read the book and realize that this guy has been quite accurate, the more I realize how dire our financial system is and how close to collapse we are. I applaud the author for his predictions but am not happy with his predictions for the future. So far, the best and most accurate doom and gloom book I've read.



3. One would expect a substantial number of facts and figures with a work like this. But in the opinion of this reviewer, the preponderence of same actually bogged this vital book down. Not for the average reader who lacks a basic understanding of economics. An aptitude for mathematics would also help someone to digest this material.



4. This book provided some interesting ideas about the future of the stock market. How much of it is valid, though? I have to admit that even with the stock market plummeting over the past two weeks, I still think this book's premise is a little shaky. After all, the author discounts other books that attempt to predict where the indices should be and claims they're simply data mining or are based on flawed concepts. In this book, the author tells a good story, but I'm not wholly convinced it's anything more than data mining with a good story.
   
   The second half of the book is unbearable, and I'm a guy who loves to analyze investments and do what-if calculations. It's filled with table after table, with repetitive information in between each set of tables. Why didn't the author keep the chapters simple and put the tables in an appendix?
   
   This book is in its second edition. I didn't read the first edition, but as the author claims in the introduction, the second edition contains the first edition text with second edition updates following each chapter. What's really disappointing is the minimal amount of content in these "updates." The charts aren't updated, the tables aren't updated, and the author doesn't even provide new sets of numbers in most cases. If I had purchased the first edition and then bought this one for an update, I would have been very unhappy.
   
   The book also suffers from HORRIBLE grammar. When describing changes to the second edition, the author says the first edition text has been corrected for grammar. I shudder to think about how poorly written the first edition must have been. (Or should I say that I shutter to think what the affect of the writing in the first addition would have had on me. In the author's credit, though, the primary grammatical error is using affect to describe effects.)
   
   I might have given this book four stars if it had been more carefully written, concise, and been more than just a simple story with a bunch of data mining. Moving the tables to the appendix would have helped, too. As it actual is, though, I give it two stars. It has some interesting parts, but a lot of it is a lot of content for only a little value. Grab the book from the library and save your money for the depression it says is coming.



5. The book was spot on regarding the current stock market meltdown. However, his advice to buy Treasury Inflation Protected Securities instead of stocks has not proven correct. So far his advice to buy TIPS has produced poor- in fact negativeinvestment results. And if there is in fact a deflationary period ahead, taking his advice on TIPS may end up costing you as much as listening to that moron Jim Cramer who told us to buy Google at 800, FCX at 80, COG at 40, and other HORRIBLE picks. But at least he correctly saw the current stock market meltdown, something all the cnbc experts didn't. Good book.[..]

5 comments about This Land Is Their Land: Reports from a Divided Nation.

1. a powerful, insightful, yet human and humorous insight into the events and politics of our times. a concise critique of the real power brokers in the u.s. that are making the our nation feared and hated throughout the world. a strong call to oust the bush regime and his followers (mccain et al) and wij back our country.



2. Why is it that I always get the sneaking suspicion that when Robin Hoods like Ehrenreich talk about the 'rich getting richer and the poor getting poorer' she has in mind a great big tax increase? What would happen if all those nasty rich people just opted out and took their compensation off-shore, in the form of long term share grants? I am not an uncritical fan of Ayn Rand, nor do I consider myself 'rich' - but gosh, when I keep reading about the nasty rich people (read: sucessful risk takers who already pay virtually all of the taxes in this country), I can't help but ask - Who is John Galt? You're poor and want to improve your situation? I would suggest that you get an education, put off having children until you can afford them, live within your means and save your money. Apparently that is too simple and smells of a Protestant work ethic. Gotta find those scapegoats.



3. "Throughout the [insert decade],...Barbara Ehrenreich was making field notes: social, cultural, political, and economic. The notes appeared as short essays - elegant, trenchant, savagely angry, morally outraged and outrageously funny. The [insert number] essays collected here as [insert book name] sum up what Ms. Ehrenreich sees as the decade's salient features: blathering ignorance, smug hypocrisy, institutionalized fraud and vengeful polarization - all too dangerous to be merely absurd."
   
   This blurb, a portion of which appears on the back book jacket of THIS LAND IS THEIR LAND, is actually taken from a 1990 New York Times review of Ms. Ehrenreich's 1990 work, THE WORST YEARS OF OUR LIVES, a rant against the 1980's. Yes, the savage anger is still there 18 years later, as is the moral outrage, but the funny is gone. Not that it matters, but two more of this book's blurbs come from reviews of the author's well-received NICKEL AND DIMED. Heaven only knows where the John Kenneth Galbraith blurb originates, but the great economist sadly passed away in 2006. Consider as well that Ms. Ehrenreich once rendered a gushing review of a Galbraith novel (yes, a novel!) entitled The Tenured Professor about which Library Journal commented with tongue firmly implanted in cheek, "...Galbraith shows that as a novelist, he is a fine economist."
   
   What lies between the front and back covers of this book is a series of 62 vignettes, nearly all of a uniform, three-page length. They are grouped into larger topic areas: inequality, mean-spiritedness, squeezing the middle class, workplace follies and inequities, health care, gender politics, and religion. Most of them read like Op Ed opinion pieces from a major metropolitan newspaper columnist, usually ending with a satirical comment that often loops back to the opening sentences for a more dramatic closure. Ms. Ehrenreich makes no bones about her liberal leanings, and readers of a similar persuasion (myself one of them) will likely find themselves nodding in agreement at both her assertions and her sense of outrage.
   
   Unfortunately, THIS LAND IS THEIR LAND emerges as not much more than a loosely-knit collection of short, caustic diatribes. It is a Dennis Miller rant or an episode of "Real Time with Bill Maher" (minus their humor) rendered in book form - entertaining for a few minutes with biting satire and self-righteous indignation, preaching to the choir exactly what they want to hear - but all hot air. There's nothing to show after the show beyond empty resignation and feelings of helplessness and hopelessness. A trail of cynicism and bitterness flows from the book like smoldering ashes, but little detail and nothing prescriptive emerges. Within hours of finishing, not one of the 62 "chapterlets" was memorable enough to recall in any but the vaguest of ways.
   
   I adored NICKEL AND DIMED (2000) and cheered Ms. Ehrenreich for her near-total immersion into the world of blue-collar work. Her next field-research-through-lived-experience effort, BAIT AND SWITCH (2005), fell somewhat short of the mark but still yielded some fascinating insights in areas that even the author herself might not have anticipated. Now, in this most recent book, she leaves her well-trod path for one that allows her freedom to vent on nearly everything. The result not only fails to satisfy, it may leave even left-of-center readers feeling sullied and dispirited. What THIS LAND IS THEIR LAND regrettably shows is that (to paraphrase the Library Journal commentary above) as an essayist, Ms. Ehrenreich is a fine observer and reporter of the lived experience of everyday Americans. Her greatest strength and most effective moral suasion comes in telling the memorable stories of real American people and their daily struggles -- for human dignity and against large institutions. One hopes that she will return soon to that well-trod but far more engaging path.



4. I consider this one of Ehrenreich's masterpieces. Having read some of her other books, I am by now familiar with her style of delivery and her ability to convey her experience and observations in readily "digestible" form.
   
   This short book is not short on information, warnings, observations, and truth. ON the one hand I found it highly informative -- on the other hand, I was struck by the disparity between "$$$$ Them $$$$" and "Us ($?)" -- BUT perhaps the tide is turning. And with that in mind, I hope that Ms. Ehrenreich takes a long hard look at what is going on in the economic sector right now (The Financial Meltdown - October 2008), and share her insights with us in another timely publication.



5. This collection of brief observations is pithy and to the point, and each one takes just a few minutes to read. But you should read slowly because otherwise the sudden rise in blood pressure they elicit may be harmful to your health. As I'm writing this, the economic collapses of late September are only emphasizing the points she makes regarding the mismanagement of America's economy and social systems -- mismanagement stemming from the absence of any sense of social conscience or responsibility in our national administration and our business and industry executives and the corporate cultures they foster.

5 comments about The Politically Incorrect Guide(tm) to Capitalism (Politically Incorrect Guides).

1. The book has many pros and cons. It's a quick easy read full of interesting insights into how money is used by private and government institutions and the roles played by individuals (consumers, workers, shareholders) in the economy (domestic and international - via free trade), as well as the potential positive effects of a free market on social issues like poverty, slavery, gender and race discrimination.
   
   On the other hand it suffers by being a purist economic doctrine: it assumes humans are rational (overly optimistic), it assumes government is always bad, it assumes the economic "laws" it proclaims are true when there are opposing economic theories to explain the same outcome, it doesn't take into account overall complexity of economies, it ignores human social evolution (centralized governments inevitably arise as human populations and population densities increase). Finally, it pigeon-holes those with dissenting views as "Marxists", "Socialists", and "Leftists", who "hate capitalism" to prove its point while using strawman arguments. The fact is, economic theory of the kind argued for in the book is not an all-or-nothing proposition. It can work well in most instances, but it's always going to have drawbacks and there will always be room for legitimate intervention since individuals are ultimately tied to central governments (which is why books that explain systems in a way that would be "best" without any government involvement are shouting in the wind).
   In other words, it provides a useful framework (like the Constitution) but the inner-workings are much more complicated and don't fit neatly into it (thus, in addition to the Constitution we have enormous legal books filled with laws of the land).
   
   I found it interesting that there isn't a chapter exclusive to the topic of income taxes, even though it's clear the author believes said taxes must certainly be bad since it's a government intrusion. I presume he thinks it's best if we have volunteer fire departments and police force. We should also fix the roads and bridges ourselves or privatize everything like it was done and failed miserably in places like Argentina.
   
   I found myself disagreeing with most of the analysis in the first half of the book. It was superficial and also demonstrated the authors lack of experience with his subject. For example, the when he argues that rent control causes housing shortages because landlords decide not to rent out apartments is bogus. Rent control is indeed negative for landlords but it doesn't cause housing shortages. When there is rent control, landlords rent out everything they can to make as much (or little) as possible since it's always better to have more money coming in. Having owned buildings myself, it's clear that the author is using Libertarian "education" rather than real world experience to build his cases.
   
   Likewise when he talks about CEOs getting huge paychecks even if they drive a company into the ground, he says it's ok because nobody would take on that job if it didn't provide big money. Fact is, plenty of people could and would do the job for far less than those salaries. He says shareholders agree to it so it's ok, but later in the book he admits that shareholders rarely wield power - instead, it's management that does. He goes on to say that workers get a paycheck even if a company isn't profitable so why complain about CEOs getting paid even if the company isn't profitable. This is absolutely absurd - workers get a pink slip, not a million dollar farewell package when the company is in the red. The book is rife with borderline retarded assessements such as these.
   
   The second half of the book is much better but this is partially because it deals with topics that are much harder to evaluate. But even here he often faulters into nonsense. He argues that outsourcing is good because cheap labor cuts costs and this savings is transmitted to consumers. That's not the case. When a manufacturer goes overseas, you don't start paying less for items. They remain the same price, but the company's profits increase because their expenses have decreased. Many times you often also get an inferior or dangerous product as a result, and inefficient customer service. But it's the consumer that feels this, not the manufacturers.
   
   There is something to be said for allowing monopolies because they do tend to bring prices down. Still, there is a balance - fierce competition also brings down prices as well as spurns innovation for better products. Additionally, monopolies have a knack for crushing competition even if that competition has a superior product so that potential buyers don't even get the opportunity to utilize it.



2. Dr. Murphy does a great job destroying the myths about capitalism. His book deals with every argument ever made against capitalism. His writing style is very engaging. This book is a pleasure to read and a great resource for libertarians. Great work Bob!
   
   Michael Beitler, Ph.D.
   Author of "Rational Individualism: A Moral Argument for Limted Government & Capitalism"Rational Individualism: A Moral Argument for Limited Government & Capitalism



3. Some democrats will find this book horrifying, but can't argue all of the facts presented. The author skips through various subjects, presenting cases for Capitalism along the way. While one or two are somewhat weak, most are strongly presented and can sway the most left leaning liberal into seeing the authors point. I really enjoyed reading it and agree whole-heartedly with 90% of the arguments presented. I have been passing it around to friends, and each of them has enjoyed it as well. It is certainly worth the price to purchase.



4. I heard about this book on "Pro Business With Dr. Mike Beitler," a free-market, libertarian internet-radio talk show. Dr. Murphy and Dr. Beitler systematically destroyed the myths about capitalism one after another. It was the most intelligent discussion I've heard in a long time. How refeshing after the socialist vs. socialist debates we saw with Obama and McCain.
   
   I would recommend this book along with Beitler's "Rational Individualism" Rational Individualism: A Moral Argument for Limited Government & Capitalism.
   
   You will find both books direct and insightful.
   
   Paul Bauer



5. This book is a great addition to the politically incorrect series. What's incredible is how wide the breadth is--everything from antitrust to the IMF--in a short 200 pages. It's rare to see such a concise book cover so many topics.
   
   For readers who are familiar with introductory economics and/or have read Thomas Sowell's Basic Economics, Milton Friedman's Free to Choose, etc., most of the arguments will be familiar. For example, Murphy shows how price controls create shortages, unions lead to unemployment, monopoly is hard to achieve in a free market/most antitrust suits are filed by competitors better at winning battles in courtrooms than free markets, how discrimination is difficult in a free market, how the environment is best secured through strong property rights, etc.
   
   Murphy does present some Austrian perspectives that many readers (even of Friedman/Sowell/etc) who read the book may not be familiar with. Even if you don't embrace Murphy's more reactionary proposals like "free banking" and highway privatization, he presents food for thought.
   
   The main reason I'm writing this book a positive review is its final few chapters on trade and on financial markets. The book expands on traditional arguments for why free trade is good and demonstrates how some modern day assaults on free trade (for example, some assaults on comparative advantage as an outdated theory) are flat out wrong.
   
   His explanation of financial markets is really the cream of the book. Even those with familiarity with economics are sure to learn a lot from his rather original explanation of how such markets function. At a time when speculation has become especially unpopular, Murphy brilliantly demonstrates how speculation on stocks/bonds, futures contracts, and derivatives make markets more efficient.

5 comments about Limits to Growth: The 30-Year Update.

1. I read today yet another reassuring news article saying that supplies of crude oil and other vital resources are just fine, no reason to worry. "Limits to Growth" shows that's just not true. Supplies may be adequate for today's needs--but with human population growing all the time, pollution adding up, and soil fertility declining, that can change very fast. In fact, a serious economic collapse is very likely in the next twenty years unless humanity changes course.
   
   Environmental economics has been an interest of mine for years. I didn't bother to read this book when it came out, figuring that it would have little that I didn't already know. Reading it now, I found that "Limits to Growth" is a fantastic book explaining the economics of sustainability. I recommend it to everyone. Mainstream economists in particular--even if you disagree, you owe it to society to read this book. If you think the authors got it wrong, please explain what variables their computer model missed and why. I actually felt that for many of their variables, the authors' assumptions were, if anything, overly optimistic.
   
   Some of my favorite quotes from the book:
   
   "In most World3 runs . . . the world system does not totally run out of land or food or resources or pollution absorption capability. What it runs out of is the ability to cope. . . .[Problem-solving capabilities] can process and handle just so much. when problems arise exponentially and in multiples, problems that could theoretically be dealt with one by one can overwhelm the ability to cope."
   
   "To be materially and energetically sustainable, the economy's throughputs would have to meet Herman Daly's three conditions: Its rates of use of renewable resources do not exceed their rates of regeneration. Its rates of use of nonrenewable resources do not exceed the rate at which sustainable renewable substitues are developed. Its rates of pollution emission do not exceed the assimilative capacity of the environment."
   
   "Because of delays in the feedback from limits, the global economic system is likely to overshoot its sustainable levels. Indeed, for many sources and sinks important to the world economy, overshoot has already occurred. Technology and markets operate only on imperfect information and with delay. Thus, they can enhance the economy's tendency to overshoot."
   
   The book does have a few things I don't agree with. The authors describe nitrogen pollution from fertilizer drainage off agricultural land as too dispersed to be reduced by ordinary pollution controls. This is simply not the case. Fertilizer is as much a point source pollution as any. The point is simply the nozzle filling the fertilizer container at the factory. This is the point at which fertilizer releases must be controlled. Fertilizer releases should be considered under law as if they are released into the environment at the nozzle point, because in effect they are.



2. 30 years ago these same people predicted devastation and havoc by today. They got teachers and professors to buy the book in bulk, making the authors wildly successful. But the conclusions proved hilariously wrong.
   
   Now they want another generation of students to be forced to buy this joke of a book to make the authors even wealthier as they predict--yet again!--planetary doom.
   
   This is a disgrace and should give pause to all those well-meaning people who tend to believe 'climate change' alarmists. They lied 30 years ago. Why believe them now?



3. Maybe the last version. Not much different from the 20-year update, but interesting to see how reports and outlook has changed since 1970.



4. Main points are these:
   - People normally use only cause-effect associations (input - output models).
   
   - They need to understand that the effect can "send a message" to the input, and this can only be viewed using dynamic models.
   
   - They do not think that all exponential process are terminated by
   the activation of strong negative limiting feedback forces.
   
   
   - The first edition was wrong and this edition will be wrong concerning the timing of the events because:
   1) no one knows who will play the game (China phenomenon for example would be thought as an "impossible" event viewed from 1972 perspective)
   Notice however that venerated Yellow River has received a very large pollution charge in these "growth" years.
   
   2) It is very difficult (impossible) to set accurate parameters for the model.
   
   
   
   
   But the MAIN point is:
   The conclusions (although the timing is not precise) are true, or have a high probability of occur, so that, as the credit growth busted, the pollution growth and the end of natural resources can spoil the world.
   
   In this case, we will not be able to borrow pure water, pure air, and food etc... from GOD or from a Natural Resources Central Bank.
   
   ------------------------------------------
   
   PS: So that the only way to not spoil the world is to control several key
   parameters (population growth, natural resources usage, pollution etc...) and some are interdependent.



5. This is a book that tells us what lies ahead of us and what we need to do. It could save the world from a collapse, if our policy makers and ourselves could get a good understanding of what the authors tried to say, and make necessary changes accordingly. In my opinion this book should be everyine's text book if we don't want our children to suffer too much. Too many people focus on making more money to satisfy our greed, and ignore the great danger that is quickly approaching us.

5 comments about Greenspan's Fraud: How Two Decades of His Policies Have Undermined the Global Economy.

1. Batra correctly points out that Greenspan is responsible for mishandling monetary policy by continually bailing out the Wall Street investment banking houses,as well as their all to willing commercial bank accomplices following the 1999 repeal of the Glass -Steagall Act, that have been primarily responsible for converting America from an entrepreneurial-enterprise-investment economy to a speculator economy based on manipulating the financial assets and balance sheets of American corporations in order to generate paper profits without production .The result has been that 3 stock market bubbles have been created-one in the 1980's,one in the 1990's,and one in the 2000's.This last bubble is potentially the most dangerous.It has significant similarities with the Great Depression of the 1930's and the Japanese Depression of 1994-2003.
   
   The real question then becomes how responsible was Greenspan ? Batra glosses over the fact that there are three other regulatory players involved besides the Federal Reserve System's Federal Open Market Committee(FOMC),a quasi private,quasi public agency that controls monetary policy.The other 3 regulatory agencies are the Comptroller of the Currency,the Securities and Exchange Commission(SEC),and the Federal Deposit Insurance Corporation(Federal Savings and Loans Insurance Corporation).All of these agencies have failed to enforce basic loan and creditworthiness standards and requirements.Probably the greatest blame can be assigned to the various chairmen of the SEC after Bill Casey.They have all failed egregiously by failing to protect Main Street from the Wall Street bubble makers.None of these bubbles would have had a chance to get going if Casey were still running the SEC.Greenspan can be assigned no more than 25% of the blame. Batra's other criticisms,such as Greenspan's statements on Social Security and its future prospects as the Baby Boomers retire,is not really relevant since Greenspan had no explicit policy making power in this area.



2. Factual and detailed, this book helps people understand just what happened to cause the present downfall of our once great country. I highly recommend this book to all. I also recommend Kotlikoff's book The Generational Storm...another winner with some solid investment advice.



3. This is probably the best book I have read on economics. The authors really simplifies macroeconomics in laymen's terms. I would recommend this to everyone who want to understand why american economy is so weak and will continue to be so unless fundamental changes happen.



4. I have been a fan of Dr. Batra's work for many years, since the Dow-Jones meltdown in 1987. By following his advice and considering his economic arguments carefully, I have managed to avoid all of the financial pitfalls that have wrecked havoc with the nest eggs of many of my fellow Americans. Dr. Batra carefully and clearly deconstructs the myths of supply-side economics to show why it doesn't work and always leads to economic meltdowns. Dr. Batra is able to make accurate predictions about future economic, social and political events because he views economic cycles in conjunction with historical cycles. In Greenspan's Fraud, Dr. Batra discusses Alan Greenspan's family and educational background and delves into his relationship with Ayn Rand, who had a profound effect on him. He also discusses Greenspan's relationship with Milton Friedman , founder of the Chicago School of Economics, who was instrumental in shaping Greenspan's world view. The book, simply put, punctures the image of Greenspan as the Oracle, or the Maestro, to show him for what he really is--a self-serving opportunist.



5. Dr. Batra rightly predicts and analyzes the economic situations. When recently Mr. Greenspan admits that he was mistaken in the subprime mess, it was like one more of Dr. Batra's predictions come true. This book was written a few years back but it rightly analyzed the mistakes or we should rather say blunders committed by Mr. Greenspan

5 comments about The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor.

1. Landes is the man, and this book pretty much sums it up. His primary thesis, that when humans are given the freedom to be innovative and pursue their own interest, is familiar from Adam Smith, but Landes does it better, it's a convincing argument. Culture is the determining factor in the success and failure of nations, not chance, not geography, not even resources, and Landes makes it obvious, it seems.



2. A good and informative read, more so, the second time around. Landes, raises many excellent points for debate between socio-economics and cultural influences of peoples and their leaders, more ofter imposed upon them, as opposed to chosen to lead.
   
   The book chosen for an economics class just finished at Lund University, Lunds, Sweden. As, a retired American ex-patriot with a background in international finance, still interested in learning, this book is highly recommended for anyone seeking to gain a better understanding on the question "how did we get to where we are?" And divides the world's peoples into three catagories: those that spend billions yearly on losing weight; those that eat to live; and, those who don't know where their next meal is coming from! That our wealth (the West) is dependent on others less fortunate. What they can't make, they will take! That wealth is, in and of itself, a magnet for exporting of commodities or products, but when all else fails or is denied -- people (migration) will be the end product that swamps the west.
   
   We'd better wake-up and understand our need to declare World War III, not nation on nation, region on region, or religion against another religion, but a unified "War on Poverty" led by the west.



3. Landes provides an interesting and credible explanation of the differences in income/capita (now about 400:1, about 5:1 250 years ago) between the richest and poorest nations. En route, Landes also provides a useful perspective on today's globalization debate.
   
   Most of the differential is attributable to cultural values. Some, however, is geographical. If one marks off a belt a couple thousand miles in width circling the earth at the equator, one finds within it no developed countries. Year-round heat encourages proliferation of disease and parasites. Poor soils and extreme dry areas are added problems, as well as the debilitating heat's effect on workers.
   
   From about 750-1100, Islamic science and technology far surpassed those in Europe - then something went wrong and science became denounced as heresy by religious zealots. Similarly, state control allowed Chinese innovations to fall into disuse. China's flotillas far surpassed Europe's. The biggest ships were about 400' long and 160' wide (Columbus' Santa Maria was about 85' long), and the fleet totaled 317 vessels and 28,000 men. Then new leadership brought an emphasis on agriculture and all ocean-going ships were destroyed in 1525.
   
   Europe enjoyed a monopoly on corrective lenses for 3-400 years, beginning in the 1300s, more than doubling the availability of skilled craftsmen and allowing the further development of microscopes and telescopes around 1600.
   
   Cotton from India proved capable of multiple washings (vs. wool), thereby transforming standards of cleanliness and health.
   
   "Easy money" (eg. gold from Spanish colonies, Holland's discovery of North Sea natural gas) makes for a lazy economy that fails to develop the talents of its people.
   
   The Protestant Reformation gave a big boost to literacy, and spawned dissents that are at the heart of scientific endeavor. Data show a much greater percentage of scientists from Protestant vs. Catholic backgrounds. Unfortunately, after Luther, cleanliness became a particular cause for suspicion of heresy, and smuggling non-approved books led to the death penalty. Thus, the fate of Catholic southern Europe was sealed for 300-some years. Sicily also suffered from intolerance and superstition of Jews, forced them out, and imposed a backwardness in trade on itself.
   
   Landes then goes on to ask "Why did the Industrial Revolution occur in England?" Protestants were persecuted and expelled from France. Weavers from the southern Netherlands sought refuge in England and brought trade secrets with them, while Jews from Spanish persecutions brought networks of trade connections. England also had a much better system of roads, along with an emphasis on transport speed and time in general. Meanwhile, France was undergoing the upheaval of the French Revolution, India's craftsmen avoided using iron and steel (had made no progress in scientific knowledge for centuries), while Russia was hobbled by serfdom's tying peasants to the land to do forced labor. China and Japan had walled themselves off from the rest of the world - in fact, China lost many of its early innovations through disuse.
   
   Another problem for Russia was that serfdom left so much wealth in the hands of the nobility that overall consumer demand was limited. Russia's poor industry was only able to produce inferior rifles, resulting in enormous losses in the Crimean War (1854-56), the war with Japan (1904-05), and WWI. Finally, the Baltic states remained poor because they were tangled in an endless struggle for freedom.
   
   Regardless, once started, the Industrial Revolution proved difficult to copy because division of labor complicated industrial espionage. Across the Atlantic, scarcity of labor in the early U.S. led to high wages and a push for innovation. Thus, European devices were copied and imported, and skilled European craftsmen encouraged to move to high American wages. (Side Note: By the time of the Civil War, firearms production in the North vs. Confederacy was 32:1 due to the South's emphasis on agriculture.)
   
   The Spanish in South America kept Protestants and Jews out; independence came not because of the settlers' strength, rather Spain's weakness. Spain also brought a macho society attitude that adulthood brought males complete independence and idleness; South American immigrants were also less educated than those in North America and the immense landownings lent themselves to simple ranching enterprises. (American immigrants created a squatters' rights culture, with small landownings and a high motivation for self-sufficiency.)
   
   China and Japan both resisted foreigners; the latter persecuted Christians and their converts after being told these groups were part of Spain's control mechanism. Following a period of anti-foreigners, Japan committed to learning from and copying the U.S. and Europe. (The Chinese did also, but much, much later.)
   
   Muslims (Ottoman Empire) cut themselves off from the mainstream of knowledge via banning the printing press - had a problem with a printed Koran. Another major limiter was their diminishment of women. (The Japanese did also, but to a much more limited extent - eg. girls were well educated, they worked until married, and continued to work afterwards if their income was needed.)
   
   The Japanese realized they lost WWII because of greater U.S. industrial output. Landed attributes this to their support for a large, exporting auto industry - American occupiers saw no need for such an industry (comparative disadvantage). Japan's auto producing disadvantages (small market, lag in technology) were turned into advantages through the Toyota Production System.
   
   Landes points out that today's comparative advantage rationality can easily become tomorrow's mistake. His example is Germany - the British economist John Bowring lamented that the foolish Germans wanted to make iron and steel instead of sticking to wheat and rye and buying their manufactures from Britain. Had they heeded him, they would have pleased the economists and ended up a lot poorer. Similarly, the Japanese.
   
   Bottom Line: The most successful cures for poverty come from within. Educated, eyes-open optimism pays; pessimism only offers the empty consolation of being right. Gains from trade are unequal. Some activities are more lucrative and productive than others.



4. The historian who hates facts
   
   David Landes' The Wealth and Poverty of Nations is at once an impressive display of scholarship and a mortally flawed analysis of, as the author put the question "why some nations are wealthy and others desperately poor." The reason why I say it is flawed is not because I disagree with the main thesis - that attitudes towards innovation and openness to new ideas determine wealth - but rather that the way this thesis is argued is completely a-scientific, if not anti-scientific. In particular, David Landes' contempt for quantifiable facts, banishes the book from the land of scientific inquiry to the land of pure ideology.
   
   Historians who despise facts are nothing new. Marxist historians insisted for half a century, even in the face of the highest economic growth rates seen in human history, that the internal contradictions of capitalism were dragging it to its grave. Professor Landes' contempt for numbers, though, is much more damning than that of the Marxist historians. While they based their analysis exclusively on Marxist theory, and thus had no problem trumpeting their contempt for "bourgeois statistics," he stakes his analysis on the same facts he disparages throughout the book. The Wealth and Poverty of Nations is one long account of experiences of economic growth (or lack thereof) of various nations and thus one would expect it to be empirical.
   
   Professor Landes' disdain for numbers that do not agree with his theory is a recurrent theme throughout the book. It begins with an affirmation that Western Europe is the best place for agriculture because it receives more rainfall than any other area that flies in the face both of rainfall data and agricultural production data. Professor Landes seems especially disgusted by cliometrics. Now cliometrics is one of the most interesting developments in historical analysis. It is the application of the best and most sophisticated statistical methodologies to historical facts in order to shed new light upon historical process than is possible with the paltry pre-existing data. It is, of course, imperfect and cliometricians argue amongst themselves over many of their findings. However, cliometrics is one of the most interesting developments of historical inquiry, showing many pre-existing interpretations to be incoherent with the facts.
   
   When confronted with cliometrical evidence, instead of judging his thesis against this historical evidence, Professor Landes chooses instead to disqualify it, behaving exactly like the Marxist historians he (rightly) criticizes. One passage is particularly illustrating:
   
   "Some historians would argue that these strangers saw and understood less than they thought, or that they blackened the Indian picture by way of brightening the European. A few have even asserted - on the strength of estimates of food intake - that the Indian ryot lived better than the English farm laborer.
   
   Such calorimetric cliometrics seem to me implausible in the light of the gulf between European and Asian techniques. Nor am I persuaded by efforts to project twentieth-century comparative income estimates back to the eighteenth century. The opportunities to distort the result are endless, and the leverage of even a small mistake extended over two hundred years is enormous.
   
   In these speculative exercises, the numbers deserve credence only if they accord with the historical context. That context, for India, was one of limited property rights and technological backwardness. Western Europe, well on its way to the Industrial Revolution, was inventing and improving ingenious, labor-saving devices, in particular, both hand- and power-driven machines. It had long since passed Asia by. It's as simple as that: more productive techniques translate into higher incomes."
   (page 165 of the paperback edition)
   
   The numbers deserve credence only if they accord with the historical context. In other words: My analysis is, by hypothesis, correct. Therefore, any evidence to the contrary must be wrong. Dr. Goebbels could not have said it better. No matter that there is a reasonable literature stating that Europe did not have the most productive techniques nor the most complete property rights. (see China Transformed: Historical Change and the Limits of European Experience by R. Bin Wong and The Great Divergence: China, Europe, and the Making of the Modern World Economy by Kenneth Pomeranz). No matter that various stories can, and have been, told in which the economy with the higher wages is not necessarily the one that surges ahead. If it disagrees with me, it is wrong. It's as simple as that.
   
   Mr. Landes' lack of proficiency with numbers is evident even with regard to those that are not at odds with his thinking. For example, when analyzing the war between Paraguay and the Triple Alliance he states that 70% of Paraguay's male population died as a result of the brutality of allied occupation. While the brutality of the occupation is beyond dispute, the number is preposterous. The occupation of Poland for five years by Nazi Germany resulted in 20% reduction of the Polish population. The idea that the Brazilian and Argentinean occupation troops could be 3 ½ more efficient than the Nazi death machine with no concentration camps, machine guns, airplanes or even roads, trucks and railroads for that matter, really makes very little sense. These silly numbers have been re-estimated by more recent historians and cliometricians and have been shown to be much smaller.
   
   Ernest Rutherford is quoted as saying "All science is either empirical or stamp collecting." (actually, he used the word physics, but physics at the time meant empirical). Professor Landes' book is quite an impressive stamp collection, but fatally flawed empirical analysis.



5. We're reading this in my Business in World History class. The book makes me want to stab my eyes out and jump off of a sky scraper. Yay! :)

5 comments about Confessions of an Economic Hit Man.

1. PRO: At the end of the book, he says you, the reader, are the reason the world is the way it is. After listening to his nonstop bashing of corporations and governments, I expected him to conclude with a final "coup de grace" on those two entities, but I was wrong! He puts the blame where it should be: all of us. We are those people in the corporations and the governments reflect what we want. If we want to blame someone, let's start with ourselves. I commend Perkins for saying that. "Any fool can criticise, and most fools do," said Andrew Carnegie. Those few paragraphs almost took the book to two stars. Unfortunately, the rest of it was terrible.
   
   CONS: Many other reviewers will point out the myriad of flaws and shortcomings of this book. I'll illustrate how Perkins would read all these one star reviews. He would say:
   
   - They're written by jackals, government officials, and corporate hitmen trying to discredit me.
   - They're people who are so naive that they don't understand how the real world works. They say this is a fantasy. It's no fantasy, baby, this was real life!
   
   PSYCHOLOGICAL ASSESSMENT OF PERKINS: Perkins is a man filled with regret. He dreamed of living an exciting life, but ended up living just a mediocre one. For example:
   
   - He wanted to go to Ivy League Schools, but went to a ho-hum schools.
   
   - He wanted to be an executive, but he never got beyond middle management.
   
   - He wanted to be a spy for the NSA, but all he got was an interview.
   
   - He wanted to live a glamourous life, but he got all the pedestrian glamour of a typical international corporate job.
   
   - He wanted babes, but he just got a divorce and a few flings.
   
   In short, he feels like a failure. He's frustrated by that so he's decided to reinterpret his whole life, make it more exciting, boost his ego a bit by writing a book that makes his life seem more interesting than it was. He fills it with cloak and dagger intrigue, but there's really nothing there. It's obvious that it's all in his mind.
   
   He depicts himself as an "insider," but offers scant interesting insider stuff. Most of his theories are backed by his daily news source: the NY Times.
   
   His opinion that construction projects drive our economy and decisions is wrong. Foreign infrastructure projects make up less than 1% of the US government budget and not even 0.1% of our economy. Furthermore, he says that "very few" benefit from the new electricity plants we build in Ecuador or Indonesia. Really? So we build a multi-billion dollar plant to power three rich people's homes? Wrong. Thousands of poor people benefit from the roads and electricity plants. That's why they invite us there. Duh! Do we also benefit? Sure! We probably wouldn't do it otherwise! DUH!
   
   The other irritation about this book is that he thinks he's making novel arguments, when they're usually obvious to all. For example, corporatations are self-interested. Wow. I never would have guessed that. Let's add: humans are self-interested. What do you expect Exxon to do? Sell oil for less than it costs them to make it? Do you expect the salesman of a construction firm to not try to get the best deal he can get for his company? Doesn't he want to get a bonus and send his children to a good college?
   
   He whines about people working for a dollar a day in "sweatshops." Are we holding them at gunpoint? No. On the contrary, people in Asia work at Nike's factories to earn their $1 a day for two reasons:
   
   1. It's better than getting 50 cents a day, which is what the local companies pay. Working for a foreign company is PRESTIGIOUS and coveted.
   
   2. Their daily costs are 90 cents a day. Some love to focus on how little people in third world countries make, but they often forget how little it costs them to live. Imagine their conversations about us: "It costs $100/day to live in America. How do they do it? We're much better off here because it costs just 90 cents per day." There are two sides of the equation, Perkins.
   
   CONCLUSION: There were only two reasons I listened to this misleading and overrated book till the end. First, my friend recommended it. Second, I was curious to see what SOLUTION he proposed. It's easy to complain. But what do you think we should do instead?
   
   As I mentioned at the beginning, he places part of the blame on you and me. Great. Well said. Now what? He tells us to drive less. I bet he drives and flies much more than any of us because he's promoting his book. He tell us that we should have a more fair world. That we should have medical services available for all, information should be widespread, and that we should think of the consequences of our actions. Blah... blah.. blah... as you can see: no specifics. Why not? Because it's nobody would like to do what would need to be done. He's asking us to change human nature. Sorry, Perkins, it's ain't going to happen. And Perkins is proof that it won't happen because lives in a nice house, buys food from corporations, votes for the political establishment, doesn't send 50% of his income to third world countries, etc....
   
   Get this if you want to laugh.



2. I think this is a great book. I had to read different chapters for a class, but I liked it so much I decided to read the whole book. The writing is simple to read and understand, and the message and information within the chapters is powerful and very interesting. Not too many people know about the seedy underside of multinational corporations. This book brings that to light in a way that is interesting.



3. For the people who want to know what is hidden behind the fact that America has become so strong over the years, this is the book to read. No conspiracy theories, no spy games, just pure imperialism in the worst manner. I always thought that economic development the Western way was what everyone would want in the world, but I never thought that not everyone is like us, not everyone cares about our materialistic world. And as much as they don't care about us we should not care about them and let them develop the way they want to develop.WATCH ZEITGEIST AND JOIN THE ZEITGEIST MOVEMENT.



4. This is the most awe-inspiring, and provocative book that I've ever read. I've found myself between a couple pages thinking "how could they do that? Why?" This has further heightened my desire to research into the corporation, money, and the manipulation that our "system" relies on every day. Well worth the while. I've started reading his sequel, and it has exceeded my expectations with more info and more interviews and quotes from the hundreds of people that have come forth. Man, just buy it, borrow it, steal it... what ever you have to do to soak in the information that John has to offer. (Try not to steal it...)



5. Just finished the book and have to say the author's stories seemed very contrived. While many historical facts are presented like the Iraq War or the Control of Panama Canal, the author's stories of meeting "local people" seem made up and don't provide any useful evidence to the reader beyond attempting to help the author's own conspiracy agenda. I was hoping for a lot more from this book, but it fails in so many ways, and believe this guy is in the same category as James Frey.

5 comments about Bear-Trap: The Fall of Bear Stearns and the Panic of 2008.

1. The book is very well written. Contents and events are explained in a manner that is very approachable for the non finance professional. The book gives you a very good blow by blow account of what it is like to be in the trenches of a financial institution that is about to fail.



2. Nothing new here. If one read the papers, he would be as informed as after finishing the book. Moreover, the author wants us to understand how intellectual he is by presenting historical facts which for the most part are irrelevant. And the whole discourse on being a "tragic hero" is just pitiful. I am not sure where the author is now, but I think he should stick to trading derivatives!



3. Now more than ever this book should be required reading in every American High School. Prior to reading this book listening to business commentary was like listening to a square dance mc. In a square dance everyone seems to know just what to do, and when to move, but for me, a native new yorker, it's just jibberish. So I was worried when i picked up this book that I wouldn't be able to understand what the hell the author was talking about. But was I wrong! The author did an exceptional job explaining to me, a person who never took a class in business, how an investment bank works. Now I know what leverage is and what hostile takeovers are, and now when i watch business news and they they talk about CDOs, and LIBOR, and basis points, I know what they are talking about. The author also did an exception job explaining exactly what a sub prime mortgage is, and I know that a lot of Americans hear this word every day, and don't really know what they are and how they helped cause a lot of the problems that are occurring today. So to all my fellow Americans you must go out and read this book, now more than ever it's imperitive that we learn about the basics of banking so we can make informed decisions about our economy, and dance to the rewards



4. This book provides a step by step account of life on the trading floor and
   it gives good insight into what happened to this powerful company.
   I believe the author did an excellent job of describing the mood of
   everyone involved and was written in a way almost everyone could understand.
   I was somewhat familiar with what was happening however this definetly
   added a good amount of first hand insight.
   Overall I found this to be a good read that helped increase understanding
   of why things came crashing down.



5. My heart goes out to everyone at Bear, and the author here was first to get a book on this topic off the press. Unfortunately, it was written from the perspective of an "unconnected observer" of the events, and therefore lacks any credibility regarding "providing an insiders account". I got more info from reading the Financial Times than this book. It also shows the speed to rush this to the press because the number of typos in the book actually compelled me to return it to Amazon for a refund, aside from the fact that 80% of the way through the book, I still haven't read a single thing worth my dime. Why did I give 2 starts instead of 1? Because this author got the book out first. That deserves some recognition.

1 comments about Capitalism with Chinese Characteristics: Entrepreneurship and the State.

1. Professor Huang has written a brilliant critique of China's economic development (and of necessity, debunks much of what others have written about China's economy). He shows that China's development started in the 1980's with government programs focused on the rural economy, with programs designed to encourage rural entrepreneurs. Unfortunately with the Tiananmen Square crackdown, the new government leaders (technocrats from Shanghai) focused on major programs for urban areas, including massive construction projects and encouragement of foreign investment. Rural enterprises (and their required informal and official funding networks) were shut down. Although there was a proliferation of highrise buildings and massive construction projects (Three Gorges Dam, Shanghai's maglev, the Olympics,...) the result was slower income growth (especially in the rural areas), increasing illiteracy (parents could not afford to pay rapidly increasing tuitions), declining health care (hospitals, like schools, also became profit centers for local bureaucrats), expropriation of farmers' land, and much much more corruption, all of which has led to increasing social disorder among peasants who are finding themselves worse off. Party cadres' pay has rapidly increased and there are now far more of them. And productivity growth has declined or has even straight-lined. A return to the policies of the 1980's is clearly in order, but the current leaders, while trying to fix things, are still relying on top down commands and controls, and they have a much larger bureaucracy to keep happy.
   Anyone trying to understand China's economic development over the last thirty years must read this. The causes of China's growth are badly misunderstand; too many economists and analysts have been overwhelmed by the vision of Shanghai's massive development without understanding the tremendous cost and waste involved, and the penalties paid by the common people (income for the poorest Shanghaiese has actually been going down).
   The book should also be a lesson for Western politicians who think that China's methods of centralized planning and control of industrial policy can be applied in the West. Or maybe our politicians also understand how government control can lead to huge payoffs for politicians (as with Countrywide Credit's payoffs of at least two senators and lots of others politically connected, not to mention the huge salaries paid to Democrat politicians 'working' at Fannie Mae).
   Read this book if you have any interest in China or economic development!

5 comments about Empire of Wealth: The Epic History of American Economic Power (P.S.).

1. this book is very nationalistic and pro-america in the phrasing. which made me want to stop reading instantly and i couldn't take some things seriously. there were some claims about america that were made in the book that were just included and unexplained while things that is common knowledge to most people were given detailed summaries.



2. I first heard Mr. Gordon on 20/20 talking about the 1987 mini-crash of the stock market, and when he said, "The Fed did the right thing then, it injected huge amounts of liquidity into the market." If people believe creating money out of thin air and giving it to the politically connected helps the economy, they really need to go back to Econ 101. Oh wait, Econ 101 these days says exactly that in almost every government run school in America. For a much more detailed and insightful look at the History of Banking and the true cause of the booms and busts (hint: The Federal Reserve itself), read Murray Rothbard's "A History of Money and Banking in the United States," or his "The Mystery of Banking." There you will find sound logic, as opposed to this trash.



3. It is amazing to me that someone could read this book - as the publisher's weekly reviewer and some of these Amazon reviewers have - and conclude this is an "unfair", biased account of American economic history because it completely ignores the disparity of wealth our capitalist system created.
   
   Really?
   
   Then you have missed the point of this book...missed the forest of the trees, as it were.
   
   This is an epic history of an epic nation. Think about your comments in the epic context of this book. Let me help: Answer these questions about the percentage of Americans in 1780/1880/1980 that could:
   
   - Travel to family or friends 100s, or even 1000s of miles away for a meal? For an emergency?
   - Communicate with loved ones, not in the same room?
   - Hear music that wasn't being played in the same room?
   - Have an iced beverage in the summer time?
   - Enjoy a warm bath in the winter?
   - See 50/70/90/99% of their children grow to adult-hood?
   - Live to see grandchildren? Great grandchildren?
   - Have the ability to show their grand children/great grandchildren/etc pictures of themselves?
   - Spend less than 80/60/40/20/5% of their waking moments feeding themselves?
   - Have fresh, out of season, produce?
   - Have access to virtually any book ever published in the last 100 years? Content not published?
   - Expect to catch typhoid/tuberculosis/small pox/pneumonia/mumps/measles/polio?
   - Survive childbirth/a heart-attack/diabetes/a broken femur/
   - Survive to 40/60/80/90?
   These are the perspectives of this book. It never occurred to me a significant number of people in 1850 didn't even know what ice was. That is, before ships and insulation improved to the point where New England ice could be exported to Central America and India. That is, until refrigeration took over (one can imagine the local politician bemoaning the loss of jobs in the ice-farming industry). This book is page after page of these obvious-in-hindsight, incredibly entertaining tidbits.
   
   But, back to you narrow minded reviewers: the above doesn't even address the core economic fallacy inherent in your phony wealth statistics -unlike the socialist systems you no-doubt favor, ours isn't a caste system - the wealthiest 1% and poorest 10% are not the same people year after year. One of the greatest explanatory variables of % wealth disparity in this country is time spent in this country, governed by both age and immigration status. A pre-med college student is poor, yet 20 years later as a surgeon, is rich; a craftsman at 20 who puts away 10% of his income over a 40 year career starts poor, ends "rich"; a Mexican immigrant who arrives with nothing sees his children go to college.
   
   We are living in the greatest economic environment of opportunity and prosperity in the history of the world and, yet, a significant number of people are finding ways to be miserable, ingrates, and ruin it for the next generation. Read this book and gain some perspective, for your sake and (unfortunately, given our political climate, for my sake and my children's sake as well).



4. This book sat on my shelf for a couple years. It looked thick and everytime I read the back cover I put it back down. An economic history of the US? Ugh. Well, I finally read it and I'm sorry I waited. This is a very entertaining and informative book. After every chapter I would share with my wife some new piece of information I had learned or share some story he had written about some of the characters that present themselves. Honey did you know...? This turned out to in fact be a quick and highly enjoyable read. I highly recommend this book to everyone who thinks they might want to have a better understanding of how the US economy developed from founding to present day - and doesn't have a degree in economics or math. I find myself referencing this book constantly as I discuss the current economic situation of our country with friends and family. Given the current situation with the automakers in Detroit his chapter on the development of GM and Ford and the auto industry should be required reading. Read about Wall Street shenanigans in the 19th century and you won't be nearly as shocked at the current situation. And all this with not one eye-glazing chart, graph or formula. Well done.



5. Gordon's explication of the genesis of the US banking system is exceptionally interesting and highly readable for most people with modest financial backgrounds. He helps provide some facts that enable one to understand what is occuring in todays financial economy. I recommend this book for general reading to all those who doubt our ability to manage our financial affairs; clearly, we have been in many "ditches" before.