2 comments about Microeconomics.

1. This is probably a very, very good book. However, it turns out that this is simply one-half of the authors' book "Economics" and, currently, the complete book seems to sell for about the same price as this one piece of it! So, be economical -- buy "Economics" instead.



2. Samuel Weber's review implies this book is an excerpt; it's not. Microeconomics and macroeconomics are completely different subjects; the courses share only a few introductory chapters (e.g., supply and demand; production possibilities).
   
   Since they're different subjects, in most universities, they're taught by different professors, and students DON'T have the luxury of buying the big "Economics" book and having it last for two courses. I use K/W for micro; I think only one fellow prof uses K/W for macro.
   
   So Mr. Weber's comment is no more true for this book than any other mainstream text.
   
   Some good features of this book:
   (1) a separate chapter on decision-making, differentiating discrete from marginal (yes/no from "how much") choice;
   (2)choice under uncertainty, including discussion of risk tolerance and insurance;
   (3) situations when buyers know more about the product than sellers, or vice versa (issues: "lemons," supervision of workers, warranties);
   (4) a chapter on the economics of technology;
   (5) interesting stories to start each chapter (such as London's pre-sewer "Great Stink of 1858")
   (6) a mainstream focus in spite of Krugman's role as a political/econ

5 comments about Economics of Strategy.

1. Actually, this book is used as a text book in Competitive Strategy courses at U. of Chicago. Kudos to Dr. Besanko for writing such an interesting well-grounded book. Kellogg may not appreciate his writing and use this book and his other book as textbook, however, here at U. of Chicago, we do.
   
   I have enjoyed reading this book and his other book of Economics.



2. I teach strategic management to undergraduates at an Australian university and have used the 2nd and 3rd editions of this book in the past three years to supplement the theory from our prescribed texts. It is heavy going in some places for the students but I like the book's rigour. The only criticism I have is that the 4th edition I just received has some minor errors. For example, pages 20-21 in the "Economic Profit versus Acccounting Profit" section has errors in the figures quoted for economic profit for McDonalds and Starbucks. I think this has occured because the 3rd edition figures have been carried over to the 4th edition without a proper proof-reading. Another minor mistake is that Table 10.2 (page 329) should read "Five-Forces Analysis of the Commercial Aciation Industry" and not "Five-Forces Analysis of the Chicago Hospital Market". Sorry to be pedantic but I guess these things can detract from the perceived quality of an otherwise top-quality text. Please note I will be buying your next edition in a couple of years. Cheers from "DownUnder Australia!"



3. The reviewer L. Skoufa is correct; there's an error on pages 20-21 of the first printing of this text. We're fixing it in subsequent printings. Sorry for the mistake, and thanks for pointing it out. The paragraph should read as follows:
   
   As discussed earlier, an important cost excluded from a firm's
   accounting costs is the opportunity cost of its capital assets, such
   as its plant and equipment. When a firm's accounting earnings do not
   cover this opportunity cost, the firm will earn a positive accounting
   profit but a negative economic profit. For example, in 2002
   McDonald's had a positive accounting income of more than $2 billion,
   but it had a negative economic profit of $124 million. (Table
   P.3. shows McDonald's economic profit, and that for other selected
   food and beverage chains, between 1997 and 2004.) What does this
   negative $124 million mean? Just as with the owner of our software
   firm, a negative accounting profit indicates that McDonald's assets,
   when liquidated and deployed elsewhere, would have earned $124 million
   more in income for its owners than McDonald's earned in 2002. In this
   sense, in 2002 McDonald's "destroyed" $124 million of its owners'
   wealth because its owners could have earned $124 million more that
   year by deploying the funds they had invested in Starbucks in their
   best alternative use. Not all firms, of course, make a negative
   economic profit. In 2004, Starbucks earned an accounting profit of
   slightly over $390 million and a positive economic profit of $151
   million. This positive econoimc profit means Starbucks created $151
   million more in income for its owners than its sources would have
   created for themselves if they liquidated Starbucks assets and
   invested them in their best alternative use. In this sense,
   Starbucks "created" an additional $151 million in wealth for its
   owners that they could not have gotten elsewhere.



4. This was the text used in a graduate Economic Strategy course I took. The text provides a decent overview of economic strategy and is only slightly more advanced than what I learned as an undergraduate. The math involved was elementary.
   
   The text attempts to cover a very broad range of topics and does not go into any single topic very deeply. For example, only 3-4 pages are used to cover Game Theory; pricing is another area that's covered at a very high level, with not much at all about price optimization, an area growing in importance in industry.
   
   I did think Porter's Five Forces were covered sufficiently, and the watch-outs of such an approach were reviewed which is important in a class where the students were asked to test many of the topics empirically.
   
   In all, a good text to provide a broad overview of many sub-topics, but don't count on it for a rigorous review.



5. This is an excellent MBA first book through strategy. It covers not only the classic facts on competition, markets and so forth but also the economics of gambling, acquisitions and marketing strategy.
   
   It is ever full of examples, and very easy to read.
   
   It is used in most of the best MBA courses in US.

5 comments about Microeconomics.

1. We thought we had ordered the textbook, Microeconomics: Principles, Problems, and Policies by McConnell and Brue. This book however is Selected Material from Microeconomics. The Table of Contents is the same as the textbook, so this is really confusing. Be sure you get what you want.



2. Microeconomics by McConnell and Brue is a great text book. The explanation is very clear. I especially like the way they explain the graphs and concepts. It's very easy to understand. They give very good examples in each chapter. I use it for my class and I found the reading is very enjoyable. This textbook is definitely good for people who want to do self-study of microeconomics.



3. My book arrived in the condition that the seller had posted and it arrived before the delivery estimate that I was given.



4. I never received the book. I have issued a complaint against the owner who I have contacted and has not replied.



5. The study guide is a great way to study the information from the textbook. Even if your instructor does not use it for classwork, it is a handy tool to study for quizzes, mid-terms, or any other tests you may be given during class.

5 comments about Intermediate Microeconomics: A Modern Approach, Seventh Edition.

1. As many others have noted it contains very few numerical examples. I didnt have the workbook so maybe that would have helped, but so far this book is completely useless. I wouldnt recommend this unless you really love the pure formulas an no examples. If its required i guess its better than nothing



2. Great book. Very useful. I have the textbook still in shrink wrap, and the workbook that goes along with it. I want to part with it. Sctops140 at aol dot com for details. I purchased it for a microeconomics class at Beloit College. The workbook helps understand the concepts explained in the textbook.



3. Its an excellent book that explains the microeconomical theory in a conscise, direct, easy to understand which in unison with a more mathematical book such as the structure of economics by silberberg can be a great tool to understanding micro economics



4. The book arrived in a timely manner and the condition was just as described. Very satisfied!



5. The book was i good condition only a few highlighted sections, but over all very good. I receieved the book very quickly as well a good deal.
   Thanks

5 comments about Essays on the Great Depression.

1. Bernanke rigorously explains the economics of the Great Depression. A massive monetary contraction (reduction in the money supply) was the cause of the Great Depression, in large part due to the flawed gold standard that was created following World War One. The massive banking collapse (due to weak regulation) further worsened the disaster. To a lesser extent, the Smoot-Hawley tarriff contributed to the cause. Sticky wages and other factors contributed to the slow recovery.
   
   Bernanke first shows that the countries that abandoned the gold standard the soonest, such as Britain, were the ones that recovered the quickest. The countries that clung to the gold standard the longest, such as France, were the ones that suffered the longest. The countries that were not on the gold standard - perhaps using the silver standard - avoided the Great Depression!
   
   Due to the gold standard and other misguided judgements, the Federal Reserve constricted the money supply again and again. The gold standard caused a run on the gold supply, followed by further Fed tightening of the money supply to defend the currency, leading to widespread bank panics, which constricted the money supply further due to the sharp drop in bank loans and the loss of consumer confidence in the financial services industry, which was hardly regulated.
   
   The economic crisis was made worse by the massive banking collapse. Thousands of undercapitalized banks went insolvent, and thousands of people lost their savings. Bank panics swept across the country. Other banks refused to make new loans for fear of loan default. The banking crisis resulted in a further contraction of the money supply. The banking industry completely collapsed at the end of Hoover's presidency.
   
   Sticky wages also contributed to the depression, although not as much as Keynesians think, according to Bernanke. Hoover and FDR may have made this worse by trying to maintain and increase the spending power of workers, although the counter argument is that this increased worker spending power increased spending and demand. The book examines many other factors too numerous to list in this review. This is the best book on the economics of the Great Depression.
   
   Once taking office in 1933, Franklin Roosevelt quickly removed America from the disastrous gold standard (which previous administrations would never have done) and FDR saved the collapsed banking industry. Recovery followed. According to Bernanke, industrial output in America grew 5% per quarter from 1933-37. Per quarter. Real wages grew substantially. Productivity grew substantially. Unemployment dropped.
   
   Bernanke says that Franklin Roosevelt's New Deal era of 1933-37 achieved strong economic growth by several different measurements. FDR reversed the contraction in 1933, so technically the depression ended in 1933. GDP grew over 50% in four years. This period of high growth was interrupted by a severe recession in 1937-38, which was followed by more high growth. According to Bernanke, "Quarterly growth rates for manufacturing employment, hours, and input in 1938-40 were 1.8, 2.8, and 4.9 percent, respectively."
   
   I used a pencil to highlight the conclusions in this book. A massive amount of rigorous economic data is included, so only an economist will understand everything, but anyone can understand the conclusions. Bernanke inserts summary sentences so anyone can understand the conclusions. Highest recommendation.



2. Overall Bernanke does a good job at looking at different theories, but his theories on the dangers of deflation have been refuted by many authors. It is too bad that this theory clouds his vision, or else his treatment of the depression would have a lot more authority.
   
   For the economist, I would highly recommend "America's Great Depression" by Murray N. Rothbard. He is by far the most thorough in his treatment of the period, delivering the most compete and well founded theory for the cause of the Great Depression, too bad Bernanke hasn't read it.



3. The Federal Reserve made the Great Depression almost inevitable when it inflated the money supply. The Fed inflated the money supply before it contracted it. With a true, pure gold standard, this initial inflation never would have been possible. Everything else about the contraction, corrections, tariffs, etc. would have been a moot point, and we wouldn't have had a great depression. Serious recession with some of the other bad decisions, maybe, great depression, nope.
   
   To claim that the gold standard caused the great depression is shady, lawyerly logic indeed--no matter how many reams of mathematical data you distort to fuzzy the matter, it just doesn't jibe.
   
   It all began with rampant inflation (increasing the money supply, ie printing or creating more paper money without a corresponding increase in gold, silver, or real goods and services. As more goods and services aren't created at the same instant new money springs into existence, prices should rise in proportion to the newly created money, but most people don't realize this is what is happening. They mistake the extra money for wealth (additional goods and services, or shifts in demand), and make illusiory assumptions/decisions that are later corrected.) It all began with rampant inflation by the Fed--the primary occurence a gold standard prevents. Period.
   
   Most everything else is just goobley-gook by the rich to keep the poor duped and ignorant, and by corrupt social engineers who fancy themselves do-gooders. There are problems with gold standards, especially when some countries have honest gold standards, others countries don't, and their currencies and goods are exchanged freely, BUT these are far outweighed by the problems and wealth redistribution to the rich created by fiat money systems. Period.
   
   It serves the ultra-wealthy, and proponents of big government and socialism and collectivism, to dupe people about currency reform. Saying the gold standard caused the great depression is like saying raw vegetables cause heart attacks, or breathing clean mountain air causes lung cancer. To claim that the very thing which would have prevented a great depression is the cause is extremely audacious, and supremely sinister, but hardly surprising.
   
   When you are on a gold standard, and you inflate the money supply (ie, create more dollars out of thin air, or simply print more), of course there is a run on gold. This is what the gold standard is supposed to do! The gold standard will prevent governments from printing additional money, by calling their bluff (ie, making them honor their commitment to exchange each dollar for a fixed weight (not monetary value, but weight) of gold). If the government keeps printing, people keep redeeming money, they run out of gold, and the scam is up. In an honest gold standard, this isn't attempted, people know the gold is there, and they simply use the money for its intended purpose--to store value and trade.
   
   When money isn't tied to gold or a commodity, the government prints more, spends it, and each citizen holding money is taxed because their money is reduced in value so that the new money has value. No tax collectors are needed, but this is a bad way to tax because altering the money supply distorts the price signal that is the backbone of the marketplace. The crafty can speculate against these distortians, picking the pockets of honest working class people who, without realizing it, are paying a hidden currency tax.
   
   If banks hadn't commited fraud by circulating money not backed by assets, they wouldn't have failed. The massive banking collapse was fraud being realized, and the accounts being cleared. It sucks that so many middle class people took it on the chin, but the lesson is that we need honest banking in which more money cannot be created out of thin air, and contracts are honored, and liabilities on the ledger cannot be magically converted to assets, and pyramided ad fraudem. One more time: If the Fed hadn't inflated the money suppy, there wouldn't have been a depression. If there had been a pure gold standard, the Fed wouldn't have been able to balloon the money supply. Period. To simply begin halfway into the story by starting with the contraction is unfathomably dishonest.
   
   Countries can get screwed just like people in this system, especially those countries with honest money who can't print it out of thin air like non-gold-standard countries. If they aren't aware how much new money is printed, their imports/exports can suffer, and they end up conducting transactions for depreciating paper currency that ultimately screws them by declining in value faster than they realized, fall prey to gold speculation or price instability, etc. But placing primary blame on the gold standard is absurd. Its like saying the guy that left his house unlocked is guilty of felony robbery when all his possessions are stolen. The thief is the problem, not the gullible or un-streetsmart homeowner -- though he should certainly be wiser and limit his interactions with criminals (fiaters). The corrupt money was the problem, not the honest money. THe fiat system of currency printing was the problem, not the gold standard.
   
   "Undercapitalized". What a cozy euphamism. You mean a bank that fraudulently pryamided assets, misrepresenting time deposits as demand deposits?
   
   In an honest gold standard, a disastrous contraction of the money supply is not a worry, as it is never inflated disastrously, so a house of cards is never created in the first place.
   
   Roosevelt saved the banking industry. What a hero! In English, he perpetuated the fraud, and shifted the cost for all the banks' fraudulent contracts it couldn't honor immediately, but should have been forced to long term, to the people. Then he allowed the fraud to continue. Robin Hood in reverse. What a role model!
   
   All the rest is expected. After the correction, inflation was much more modest, meaning intervention in the marketplace via distorted price signals was much more modest, meaning citizens not machinated by corrupt currency did what they will usually do--busted butt and created prosperity.
   
   Many rigorous economic studies churn numbers, and then try to assign causes or meanings to those numbers, without truly assessing/considering what the numbers mean in terms of actual human behaviour, especially in terms of fundamental causalities that lead to the data. This is one of Rothbard's main problems with conventional economics.
   
   Read Rothbard's book for a real explanation of the Great Depression much more elegant and less scathing than mine. As long as propaganda like this masquerades as truth, the common man's freedom and standard of living will continue to decline.
   



4. Bernanke is ,unfortunately,ignorant of the preventive medicine approach to Bubbles and Depressions first postulated by Adam Smith in 1776 in the Wealth of Nations and then reapplied by J M Keynes with the additional analytic conclusion emphasizing the importance of clearly differentiating between tolerable security (risk)and uncertainty.
   Smith made it straightforward and easy. There are four categories of borrower to whom commercial and Wall Street investment banks can make loans available to-the prodigals,projectors,imprudent risk takers,and the sober people.The task of money and banking policy is to prevent loans from being made to the prodigals,projectors(Keynes's speculators of chapter 12 of the GT,1936),and imprudent risk takers(dealt with by Keynes in chapter 11 with his lender's risk versus borrower's risk distinction).Economists don't seem to get it.Neither do Fed chairmen.Allow the capital markets to be dominated by leveraged buyouts and hedge fund speculators guarantees that the inevitable bubble will be created.The only question that remains is whether or nor some type of bailout will prevent a panic and crash.This type of money and banking policy allows the problems to be created and then attempts to prevent the problem from mushrooming into a serious recession or depression.
   
   Smith's advise to Bernanke and his coauthors would be to, first, fix the rate of interest permanently a little bit above the prime rate and then maintain it at that level for the long run and ,second,only permit loans to be made to the sober people.Otherwise,periodic financial crises will occur. It's as simple as that.None of the essays deal with the fundamental goal of banking policy-Prevent the problem from arising in the first place.Of course,if you believe in the Efficient Market Hypothesis fairy tale, where all price changes in financial markets are normally distrbuted,as does Bernanke,no problem is supposed to occur.But they do.



5. Anyone can spin a story about anything using the various mumbo-jumbo parts of mainstream economics. Bernanke here has decided to ravage the gold standard. Suffice to say, it is extremely tedious, banal, and antithetical to common sense.
   
   Ludwig Von Mises predicted the Great Depression in 1919.
   
   Here's two easy steps to understand the real cause of the crash.
   
   1. Read Murray Rothbard's America's Great Depression
   2. Google "Benjamin Strong", the first Federal Reserve chairman who served until his death in 1928. Bernanke does not mention Strong at all. You will find almost all the answers in Strong's tenure. For the severity and length of the recession, please read Jim Powell's "FDR's Folly".

5 comments about Microeconomics (7th Edition) (MyEconLab Series).

1. I currently use this book to teach at the University of Michigan. (I chose it because it's what has been used here before.) The book is written in an accessible, reader-friendly style. It has many examples and pictures, which make it attractive -- a feature, I suppose, that is necessary to hold an undergrad's attention in these times we live in.
   
   But what annoys me is the absence of conceptual rigor/detail and the sudden jumps in explanation. I want my students to be able to see what is going on and appreciate the simple elegant logic of microeconomic theory. Instead the book reads like it's delivering information to you, but isn't really explaining why it makes sense.
   
   Here's an example. In Section 4.2 on Income and Substitution Effects, the effect of a price change is decomposed into income and substitution effects using constant utility. But as many of us know, there's an alternative way to do this too, which is holding purchasing power constant. For some reason that approach isn't mentioned. Instead, the text reads as though we were interested in the constant purchasing power approach, but then suddenly switches to a constant utility approach by saying "This substitution is marked by a movement along an indifference curve." But why? Wouldn't any intelligent student at this point start wondering how we went from purchasing power to utility? Flip back to Section 4.1 and find that the word utility has been quietly introduced there in a sentence that's in parentheses: "(Because the price of food has risen, the consumer's purchasing power -- and thus attainable utility -- has fallen.)"
   
   Pooh. I don't like books that sneak important ideas into parentheses in order to avoid answering the all important question -- i.e. "Why?"



2. I used the 6th Edition in my executive MBA class at Wharton. It is a good book if you are looking for an introductory level description of the subject. The authors did a great job explaining the intuitions behind the concepts and effectively used graphs as an illustration tool. Authors took the effort to link key definitions back to where they were first introduced throughout the book. I found it very useful, whenever I am not so sure about the definition, I could easily go back to the original discussion to remind myself. The cases used in the book help to ground the theoretical discussions in economical reality. I enjoyed most of them.
   However, this book is not for readers looking for advanced rigorous treatment of the subject. The mathematical treatment is very basic -- no differential equation is used in the analysis. All of the supply and demand curves are assumed to be linear. These choices do not necessarily represent a comprmise in learning as long as the readers know what the book has to offered.



3. It arrived on time and the condition is just what I expected from the description online.



4. If you have to purchase it for your class - sure, go for it, however, I would never recommend it a bedside reading for people interested in microeconomics - the content is very dry and puzzling at times...



5. Brand new book, awesome pricing, and excellent delivery time. Perfect alternative to buying over-priced books at your College Student Store. This was about $50 less even including tax and s&h.

5 comments about Financial Armageddon: Protecting Your Future from Four Impending Catastrophes, Revised and Updated Edition.

1. Financial Armageddon: Protecting Your Future from Four Impending Catastrophes, Revised and Updated Edition
   Excellent book for giving you an idea of how things might happen. Roving bands of mercinaries, Etc. Etc. Not to sound like a Pollyanna here but I think you left out the part where we downsize to the community/Township size & take care of our own. Yes, the government can & probably will have control of the money..But it's their's to start with isn't it? We the people are the ones who give it value. I enjoyed the book, gained some insight from it, and will incorporate some of the measures. If what you want is solution for Mr. Panzer's future, I suggest you get busy reading the foxfire series (A Serious course in "Self-Reliance")



2. 1. Hedge funds are structured around a performance-based compensation system. Hedge fund advisors are paid an incentive fee based on how well they do. Hedge fund advisors get a 20 percent cut above a preset benchmark, in addition to a 2 percent fee, of the total funds under management. Many hedge funds have become comfortable using large amounts of debt to boot returns. Many on Wall Street switch sides and became a hedge fund. The goal is too generate the highest possible returns in the shortest period of time, ignoring any long-term consequences.
   
   2. The pricing of options is dependant on time remaining until maturity, interest rates, and investor expectations on market volatility.
   
   3. According to Towergroup, US brokerage firms expected to generate $33.2 billion from derivatives-related revenue in 2006.
   
   4. Credit Default swaps make up the fastest growing segment of the $415 trillion derivatives market. "The credit derivative has one party making periodic payments to other and receives the promise of a payoff if a third party defaults. The former party receives credit protection." (Wikipedia)
   
   5. Credit Default Swaps can be used to manage risk without selling the corporate bond or government bond. Credit Default Swaps are a form of insurance for banks, pensions, and hedge funds (Party A) too protect themselves against the companies they invest in against debt default.
   
   6. Insurance is bought to protect against loss. Without insurance, if company X defaults on debt, the bond value is lost. For example, a pension fund (Party A) buys a CDS and pays a 2% premium per year broke up over four quarterly payments, payable too a derivative bank; on the books, the risk of default is eliminated by the insurance; and CDS coverage lasts 5 years.
   
   7. Since the CDS is not tie to a physical asset it can be bought and sold. Speculation on the credit-spread works drives buying and selling of CDS contracts. Without a CDS, a third party profits by identifying, a company with weak financial performance and offers to pay $900k for a $1 million bond from party B and profits $100k, if the company paid its debt. With CDS, party B profits: "Alternatively, one could enter into a credit default swap with the Party B, by selling credit protection and receiving a premium of $100,00. If the company does not default, one would make a profit of $100k without investing anything." Speculation profits are on the margin. Swap prices decline as credit quality increases and rise when quality worsens. "Some who believes that a company's credit quality will change could potentially profit more from investing in swaps than in the underlying bonds."
   
   8. Problem: Party A buys the CDS from Party B, Party B can assign the insurance contract to another party; the final party may or may not be in a position to pay the bond's full value in the case of Party A default. If companies default on their obligations, buyers of credit default swaps would lose money, banks would tighten credit, and interest rates would rise.
   
   9. In 2006, at least $200 billion of General Motor's CDS were estimated to exist, covering $30 billion of bonds. There is a risk that major financial operators are in over their heads leading to dangerous systematic pressures. The danger occurred in 2005 when 100,000 CDS had been verbally agreed to but not settled.
   
   10. According to the US comptroller, JPMorgan Chase, Bank of America, Citibank, Wachovia, and HSBC accounted for 96 percent of the $100 trillion of derivatives controls outstanding among the 836 US banks. JPMorgan being the largest derivate player. Fannie Mae and Freddie Mac had $1.5 trillion of derivates to hedge against risk in their portfolios.
   
   11. "Credit derivatives have never been tested in times of acute market stress, such as a collapse of the real estate market, a cratering economy, or a 1987 type stock crash."



3. If you care about your family's future financial well being, this book is a must read. This is the second edition of the work, but Panzer made some predictions in the first edition, written a few years ago, that have come to pass alrady. While, I hope we never see the "armageddon" that Paznzer lays out, I do believe that we are poised for a massive recession or depression due to the recent credit and houing bubbles. Panzer lays out a series of events led by a weakening dollar, national trade budget shortfalls, and credit derivative misuse that could ultimately change the face of America and our current way of life. I would also recommend "The Demise of the Dollar" as a follow on read to this work.



4. I seldom buy financial books because most of them are simply print "scams". I bought this one because of the reviews and a recommendation by someone, and Mr Panzner's credentials. He certainly has the background to write a meaningful book on the subject. However, I was stunned at how extraordinarily superficial the book was, and thus felt compelled to write a review. The book takes some similar events in history and paints a potentially very scary future. And that future may come to pass, but you've got almost 200 pages of extrapolating those historical events into the future and very little else. Seems little more than an attempt to sensationalize and commercialize what "can" and possibly will happen. There is little digging into what precipated some of the events, and the "advice" offered is really pathetic. The fact that this got such high ratings is either a testimony to how many friends he has in the industry or how ill informed and poorly read our society is. The one thing for sure is that there was indeed a wealth transfer that occured here: my wallet to his. But other than that, there is absolutely no reason to purchase this book. Given his credentials, I would have thought he would have been mildly embarrassed to pen this. He could undoubtedly do better.



5. We are in perilous times. Now (i.e., late September 2008), we all realize it. Several years ago, virtually alone, Panzner predicted (in great detail) exactly what has now actually come to pass over the last few years, and---perhaps much more importantly, he warned us exactly what is coming in the near future.
   
   Several years ago, he was regarded as being "an alarmist"; now, we recognize that he was (and is) a PROPHET!
   
   I believe we all should read this book very carefully, and use it to plan for our families' futures. Buy copies of this for your friends---they'll soon be very grateful that you did.

5 comments about The Great Crash 1929.

1. Galbraith does an excellent job in demonstrating how the private sector commercial bankers' unregulated short run,short sighted, penny wise ,pound foolish profit and sales maximizing behavior provided the financing and leverage for the real estate and stock market bubbles of the mid to late 1920's that led to the financial collapse of the DOW by mid 1931.The writing and analysis is excellent.
   
   I have one major criticism.No mention is made of the analysis provided by Adam Smith of precisely the problem discussed by Galbraith in this book. Smith's analysis covers nearly 100 pages and correctly identifies what the problem is-loans made by private commercial banks to 3 different categories of borrower-prodigals,imprudent risk takers(the "new" balloon payment financing of the 1925-1928 real estate bubble closely resembles the sub prime and alternative- A loans of the 2003-2006 period).Galbraith certainly could have used the analysis provided by Smith on pp.250-340 of The Wealth of Nations [1776;Modern Library (Cannan)edition] to buttress his position . Unfortunately,it appears that Galbraith never read Smith's book. He could have made use of the support provided by Smith,universally acknowledged as the world's greatest economist. The WN is a timeless classic that is just as applicable and relevant today as it was in 1776. Washington and Hamilton used Smith as the base of early American economic policy .The reader of Galbraith's book is advised to purchase a copy of WN as well.



2. There are bigger and more detailed accounts of the 1929 Crash, but Galbraith's effort is excellent at distilling and depicting what happened and why. It's a great place to begin a study of the Great Depression. I was surprised at how well Galbraith wrote, and his command of the subject. None of it is difficult to grasp, which is why it's a great place to begin.



3. I found this book captivating, in a "gallows humor" sort of way.
   
   Although written many years ago, and recounting events in the distant past, it should be required reading for anyone in the markets today. More specifically, it should have been required reading a year ago (mid 2007) for those invested in finance and property sectors.
   
   Whether the malaise in those sectors (some stocks down 90%) spreads eventually to the general indexes remains to be seen.
   
   Tony Loton, author --
   DON'T LOSE MONEY! (in the Stock Markets)
   Financial Trading Patterns



4. Given the recent turmoil in world financial markets, it is hardly surprising that, from the rubble, an army of economic pundits has arisen, replete with historical parallels and a cookbook of remedies for the mess. Being of a cynical disposition, I favor those pundits who reinforce my own certainties that perfidy, greed, speculation, lack of regulatory oversight and failed government policies are at fault for the current debacle. I found validation in "The Great Crash, 1929".
   
   John Kenneth Galbraith, is a "giant" in the field. In this book, he identified five salient weaknesses of the 1920s economy that appear to me to be strangely evocative of the current financial crises. These are: 1). Gross inequalities in income distribution, with a tiny fraction of the
   population owning the vast majority of the wealth. The level of CEO compensation nicely illustrates this point (it's nearly 350 times that of the average "prole"), 2). Flawed corporate structure, one in which, "American enterprise in the twenties had opened its hospitable arms to an exceptional number of promoters, grafters, swindlers, impostors and frauds". The analogy to the present is perhaps to hedge fund managers, short-sellers, leveraged traders, purveyors of derivatives and "sub-prime" mortgages and real estate speculators, some of whom appear to share these characteristics, 3). Bad banking structure, enabled, in part, by Congress rescinding Depression-era legislation separating commercial from investment banks and by allowing unregulated investment activity on a large scale. Other components extend to failure of the SEC to regulate mortgage instruments, "naked" short selling, government-mandated requirements for the use of "fair value accounting". I'm sure there are others., 4). "Dubious" state of foreign balance. Now (in a reverse of the situation in the 1920s), the US is the chief borrower nation, with the preponderance of debt held by foreign governments (chiefly Asian and increasingly Middle Eastern) and, 5). The poor state of economic intelligence. In the present crisis, I take "intelligence" to mean "smarts", rather than access to accurate and timely data. It might also be taken to mean "responsibility". An example of lack of "smarts" might be E. Stan O'Neal of Merrill Lynch who blandly asserted his lack of understanding of "derivatives" as an excuse for his firm's demise, while allowing their purchase and sale. Dick Fuld of Lehman is a nice illustration of lack of responsibility. His activities destroyed a perfectly goodfirm, yet, he still serves as Lehman CEO (note: the current Lehman is a 14 year-old company, spun off from American Express, so don't wax too nostalgic about the demise of a "150 year-old firm").
   
   Yes, it seems obvious that regulation will be required as, left to their own devices, the "masters of the universe" will continue to refine and evolve their penchant for making lots of money by devising new financial instruments, which will lie outside the latest regulatory umbrella. Yes, people will live beyond their means, if given the option and easy credit is an enabler. This all seems to be part of human nature. Yes, it's a mess. However, it is unlikely to be "a national disaster for the United States". It's just business. However, you never know...



5. I wish that I had purchased another book. This is not a good book at all

5 comments about Principles of Microeconomics.

1. My book came right on time as it said and you could track the order the entire time. The book is in great condition and was packaged very well.



2. Joseph Schumpeter once encouraged his readers to make up their mind whether they wanted simple or useful answers, because both could not be had at the same time. Mankiw opts for the former option. A student who knows little about economics and who will be exposed to the discipline for the first time by using this textbook will get a very narrow view of economics. He or she will have no idea that there are strong disagreements about economic phenomena and even different schools of thought. This can be expected: Mankiw is a neoclassical economist, that school is dominant for one reason or another, so few would expect him to go out of his way to point out that there are different intellectual traditions in economics. However, Mankiw does not even bother much to point out disagreements within the mainstream either. For him, economics is a quasi-scientific discipline that clearly explains how things are; thus, economists disagree solely because of values.
   
   That is a gross mischaracterization: neoclassical economists disagree a lot on theoretical issues, too. Mankiw's own colleague at Harvard - Dani Rodrik - described these disagreements mainly springing from the division between "first-best economists" and "second-best economists". The former group (Becker, Cowen, Mankiw) almost always finds a solution in the supply-demand framework and competitive markets. The latter group (Stiglitz, Rodrik, Akerlof) search for more nuanced and contextual explanations. Mankiw's only reference to "second-best" issues like imperfect information and behavioral economics is relegated to a couple paltry pages in the end of the book where it can be safely forgotten. The minimum wage is a case in point: Mankiw uses the simple supply-demand framework to "prove" that minimum wage causes unemployment. In fact, this view has lost popularity even among neoclassical economists. Recently over 600 American economists (including several Nobel laureates such as one of the fathers of modern neoclassical economics Kenneth Arrow!) signed the petition to increase the minimum wage in the US. Some of the most important research disproving Mankiw's claim has been done by people as mainstream as David Card (Berkeley) and Alan Krueger (Princeton).
   
   Trade is another example. When arguing for "free" trade, Mankiw goes through possible counterarguments. The "infant industry" argument (supported by the "father" of economics Adam Smith himself) is dismissed after one paragraph. If these infant industries are of any promise, Mankiw proclaims, the private sector will take them up. Never mind uncertainty (not risk, but uncertainty). Never mind the fact that the US used protective barriers designed by Hamilton to allow its industries mature, never mind the fact that Japan and Korea developed using the same method. Never mind the fact that a very recent Commission on Growth and Development (which includes someone as mainstream as the Nobel laureate Bob Solow) concluded that "Government intervention in the economy, and a degree of protectionism, will be needed in the early stages of development".
   
   My final example is the agency assumption. To act with a degree of self-interest is one thing, but to be a selfish and calculating sociopath is another. The mainstream is more and more open to alternative ideas about agency. Kenneth Arrow himself once said that if human beings were to act as utility-maximizers all the time, society and all of its social ties would be pretty much destroyed. The mainstream borrows more and more from behavioral economics, behavioral game theory, etc. Samuel Bowles, for one, does a good job of effectively combing the ideas of the mainstream with alternative ideas about agency. Of course, Mankiw does not care. I could go on, but I think this is enough.
   
   Adbusters Magazine called "one of the most effective and talented propagandists of our times". That might be an exaggeration, but beware and hope that your instructor will add at least some nuance to Mankiw's exposition of economics. I was quite fortunate since my instructor, while thoroughly neoclassical, at least made sure to spell out the assumptions and point out which ones were more arbitrary than others (e.g. constant marginal utility of money in welfare economics) and when exactly economists are being sneaky (e.g. gains from free trade, even if all assumptions hold, are only a potential Pareto improvement). Some others may not be so lucky.



3. The book was in really good shape with minor markings inside...very good buy and very pleased. Thanks!



4. Great text so far however the problems vary between 4th editions based on weather or not it was made for the US or Canada!



5. Well described product. This book is very easy to follow along with the lectures, and is a great resource for introducing the basic principles of microeconomics.

5 comments about Manias, Panics, and Crashes: A History of Financial Crises (Wiley Investment Classics).

1. As I write this review, we are waiting to see if the Fed's somewhat drastic cut in the federal funds rate will stop the slide into recession. Bank of America is acquiring Countrywide mortgage lenders. UAE has bought an $7.5 billion worth of junk bonds from Citigroup in a manner similar to the late Dr. Kindleberger's lender of last resort. So we have an event going here as I write.
   
   As a Southern California homeowner, I am certainly not surprised at what is happening. Houses constructed and first sold for $30,000 in the late 1950's were selling for $600,000 and up a year ago. I would go to lunch and all anyone would talk about was real estate. I got a lot of crazy advice ("sell your home, move out to the desert, and live off the interest.") I would turn on the TV and watch Jim Cramer screaming "They're not making any more land out there!!!!!" How could that last? I decided it was time to read this book.
   
   Manias, Panics, and Crashes is a scholarly work of Economic History. It sets up a model of a crash or panic and then explores each phase in succession. He writes narratives of events, such as the South Sea Island Bubble, and how the events transpired. Dr. Kindleberger examines the mania or bubble phase, the critical stage, and then examines two ways in which it ends. The two ways to end the panic are either to let it burn itself out or through a lender of last resort. He focuses on the economic more than the psychological factors that make up these cycles.
   
   Kindleberger favors the lender of last resort solution as it cuts the duration of the crisis. He notes that the Great Depression could have been stanched more quickly had there been a lender of last resort. But, I think he presents opposing ideas to his in a fair and gentlemanly manner.
   
   Yes, this book is not an easy book to read. Few books in economics are easy to read. No it doesn't give advice on profiting from a panic. The Late Harry Browne used to write such books before he began running for President. Those books are useless generally; by the time you want to read them, its already too late. Gold, foreign currencies, and the like will be at all time highs, as they are currently.
   
   I recommend this book because this is a recurrent phenomena that is part of human nature. Optimism is a good thing. But if you are channel surfing late night television and an infomercial comes on with guys sitting in lounge chairs around a pool sipping margaritas and telling stories about how they became millionaires while working 2 hours a week, it's time to read Dr. Kindleberger's book.
   
   Update: Last weekend, the Fed arranged a deal where JP Morgan-Chase acquired Bear Stearns for $2 per share to forestall a panic. There are many critics of this deal. Some say the corporate headquarters alone was worth many more times than what Morgan paid for the company. Most of the press gave the credit for the deal to Ben Bernanke, but Robert Novak in the Washington Post gives the credit to Timothy Geithiner, President of the NY Federal Reserve Bank.
   
   So, the Fed is following the Kindleberger strategy of finding the buyer of last resort rather than the Milton Friedman strategy of letting the fire burn itself out. I suspect we will know in a month or so whether this strategy has succeeded or not.
   
   
   I am reviewing and recommending the edition of this book released in 2000.



2. The REALITY is that the small super-over-incredible-tons rich globalist groups that control the world finances are behind this "financial crisis".
   
   They , in their plans to globalize the world need from one side to remove the middle class in order to build its socialist type (without saying that name) of world and at the same time they need to force a buy-out of banks and industries; that way the biggest ones eat the smallest ones and just a group of transnationals ( which they, of course, are the owners) will control the world economy, and wanted or not, they will impose their will all around the world, making of us modern slaves, just happy to have a car and a permanent job to pay the permanent debts while they will live in limitless richness.
   
   That has been the human history, no matter which one label is used for the System; a group controls the majority with force or beautiful lies. We, that lived communism, we know that, but this is more "perfect" perpetrated, because they will give "bread" and a sense of "false peace".
   
   They take us as stupid and cretins that will be part of the choir which will sing the song of the "good purpose and righteousness plan". My friends, common citizen of this world, they have no ideology, it only matters for them just power and control. Now as never before.
   
   As soon as such a control is possible, any "circus" can be orchestrated against any opponent or opponents. Look back to over 6000 years of human history.
   
   Alejandro.



3. Kindleberger does a great job of demonstrating what the root cause of economic downturns is.The process starts as bubbles of speculation on a sea of enterprise and entrepreneurship as pointed out by Keynes.However,as time passes the bankers decide to shift loans to speculators as well as starting to engage in speculation themselves.The situation changes as one observes a sea of speculation with few bubbles of enterprise floating on top.This sets the stage for the bubble to start growing with the finance coming from the bankers who fuel the expansion in the bubble.This leads to the mania stage.All it takes here is for some tiny liquidity disruption to set off a panic of selling which leads to the Crash as various participants discover that their paper wealth has evaporated ,leaving them with crushing debt loans as their debt leveraging and margin account financing now becomes an albatross around their necks.The end result is various bankruptcies and defaults and a recession or depression.
   
   
   Kindleberger shows how this pattern occurs over and over again in history.Unfortunately,Kindleberger fails to provide the reader with a simplified summary from the earlier work of Adam Smith and J M Keynes that explains the crucial steps involved in inflating,but not creating, the bubble-(a)loans from the commercial bankers to loanees whom the bank knows for certain are going to be engaged in speculative behavior and (b)the decision by the banks themselves to enter the market as active speculators.It is true that the bubbles themseves start irrespective of the banking system since individuals are free to engage in speculative finance with their own money and assets.However,the bubbles could not grow and expand over time if the bankers refused to allow the speculators to leverage their debt position by obtaining extensive lines of credit from the bankers to expand their debt positions.
   
   
   Everyone who reads this book should also read pp.290-340 of The Wealth of Nations[1776;Modern Library(Cannan)edition]and chapters 12 and 22 of The General Theory of Employment,Interest and Money(1936).Keynes proves mathematically that it is uncertainty and speculation(the speculative demand for money) that cause involuntary unemployment in chapter 21 on pp.305-306.The neoclassical(monetarism,rational expectations,real business cycles,etc.) schools must,therefore ,deny that there is anything called uncertainty or ignorance;there is only risk, which is represented by the standard deviation sigma.Similarly ,they must deny that there is any significant speculative demand for money;there is only a transactions demand for money.Kindleberger essentially demonstates that the neoclassical schools have absolutely no historical support.This also means that there would be no statistical support for their claims that the normal probability distribution is applicable to a wide range of industrial and financial markets.Kindleberger, as well as the new coauthors of this latest edition, overlooked the immense support that Kindleberger could have used to buttress his overwhelming historical evidence that has been madee available by Benoit Mandelbrot. Benoit Mandelbrot has presented massive amounts of statistical evidence, for over 50 years ,demonstrating that the neoclassical school's claims about the normal distribution do not have a shred of evidence to support them.It should not be surprising to discover that NO neoclassical economist in the 20th or 21st century has ever done a single goodness of fit test on the various time series data sets in order to supply support for their claims that price changes in all markets are normally distributed over time.
   
   
   
   I recommend this book .It will allow a reader to understand the negatives that could very well happen in the 2008-2010 time period.Ben Bernanke's 1.2 trillion dollar banker and Wall Street bailout,from August,2007-May,2008, has merely delayed the inevitable while creating massive new bubbles in oil and commodities and driving the value of the dollar to new lows.Bernanke has merely substituted future stagflation for recession.



4. I gave this book to my grandson who is majoring at UCSD in economics. He has not had any course yet covering the history of financial crashes, etc. and finds it fascinating to compare past times with the present economic slowdown. Manias, Panics, and Crashes: A History of Financial Crises (Wiley Investment Classics)



5. I am no economist and just an interested general reader. I expected to read narratives about past financial crises and how they played out. But this book is not organized that way. It doesn't tell any story from start to finish. Instead it references lots of different crises in a kind of shorthand way, without giving the background or the overall narrative.
   
   Many of the references are pretty darn obscure, at least to me. So fine, if he's talking about how a certain phenomenon works and he says, "as in 1932," or "as in the S&L crisis," I'm with him. But when he says, "just as in the 1762 case in Belgium" (made up example)--well, my eyes start to glaze over, because he hasn't told me the story of 1762 Belgium, but referenced it as if it should be as familiar to me as the Great Depression in the US.
   
   I also think there's something wrong with the writing style. He seems not to start out with topic sentences that show us where he's going, or to end with a summing up of the significance of what he's just said. Certain details recur within a few pages of each other. The effect is pretty scatter-shot, as if it was not carefully edited and made to flow.
   
   There is plenty of raw material here for anyone watching our current economic crisis and wondering how it happened, but you have to work for it. What I get from it is that in certain circumstances, if everyone does what seems best to him or her in the market, the end result will be disaster for all. It's not really irrational to buy when prices are increasing by the day, because huge profits can indeed be made. But the more people that make that individually rational choice, the more irrational the whole thing becomes.
   
   Maybe I could compare it to a stampede to an exit door in a fire. Each person's individual best choice is to get out as quickly as possible. But if you allow that psychological reality to play out, you might have people trampled to death at the door who then block everyone else from escaping.
   
   Reading this was like listening to a rather elderly professor of history who is intimately familiar with many obscure incidents, but doesn't provide the context for his young students to follow his train of thought.