October 20, 2012
Book Bits | 10.20.12
● The Big Flatline: Oil and the No-Growth Economy
By Jeff Rubin
Excerpt via Bloomberg
For most of the last century, cheap oil powered global economic growth. But in the last decade, the price of oil has quadrupled, and that shift will permanently shackle the growth potential of the world’s economies.
The countries guzzling the most oil are taking the biggest hits to potential economic growth. That’s sobering news for the U.S., which consumes almost a fifth of the oil used in the world every day. Not long ago, when oil was $20 a barrel, the U.S. was the locomotive of global economic growth; the federal government was running budget surpluses; the jobless rate at the beginning of the last decade was at a 40-year low. Now, growth is stalled, the deficit is more than $1 trillion and almost 13 million Americans are unemployed.
● Why I Left Goldman Sachs: A Wall Street Story
By Greg Smith
Analysis via New York Observer
It’s been a leaky week leading up to the publication Why I Left Goldman Sachs, with the firm giving guidance on the potential motivations of its former employee, and reporters getting their hands on copies of the embargoed title. A week ago yesterday, The Financial Times reported on the results of Goldman’s internal investigation into the allegations that Greg Smith made in a New York Times op-ed published in March. What the probe turned up? Prior his very public departure from the firm, Mr. Smith had submitted compensation requests that his superiors believed to be out of line with his performance; 99 percent of the time Goldman employees wrote the word “muppet” in an email, they were referring to the 2011 movie—not about the firm’s know-nothing clients. Perhaps discontented with the attention received by the FT reports, Goldman went and slipped a 9-page summary of the so-called muppet hunt to Bloomberg, which reported today that “the documents paint a picture of Smith that is at odds with the image he fashioned for himself in the op-ed: an altruistic kid from Johannesburg, out of place in the rapacious, wealth-obsessed world of American high finance.”
● Bet the Farm: How Food Stopped Being Food
By Frederick Kaufman
Q&A with author via Marketplace
Natural disasters from drought to flood and almost everything in between can do quite a number on farmers and their crops -- and the prices consumers wind up paying. A prime example: the Midwest this summer. But nature's not the only reason food prices go up. In his new book, "Bet the Farm: How Food Stopped Being Food," Frederick Kaufman says banks are "food neutral" but the transformation of food into a commodity that gets traded has caused food prices to artificially rise.
● Producing Prosperity: Why America Needs a Manufacturing Renaissance
By Gary Pisano and Willy Shih
Q&A with authors via Quartz
The new manufacturing worker is a knowledge worker. No longer equipped with a high school diploma and union card, he’s got advanced skills in programming and statistics. That’s what’s needed for a manufacturing renaissance. Here’s the catch: It might take 50 years. In their new book, released Oct. 16, Harvard Business School professors Gary Pisano and Willy Shih say there is no quick fix but that the sector’s growth is vital to maintaing the US’ competitive advantage in innovation. President Barack Obama has pledged to add 1 million manufacturing jobs over the next four years, which may not be possible, in the eyes of these experts. “The jobs coming back are different than the jobs that went. So while we are sympathetic to the president’s goal, we think it’s not quite framed properly,” says Pisano.
● The Sensible Guide to Forex: Safer, Smarter Ways to Survive and Prosper from the Start
By Cliff Wachtel
Summary via publisher, Wiley
The Sensible Guide to Forex: Safer, Smarter Ways to Survive and Prosper from the Start is written for the risk averse, mainstream retail investor or trader seeking a more effective way to tap forex markets to improve returns and hedge currency risk. As the most widely held currencies are being devalued, they're taking your portfolio down with them—unless you're prepared. For traders, the book focuses on reducing the high risk, complexity, and time demands normally associated with forex trading. For long-term investors, it concentrates on how to hedge currency risk by diversifying portfolios into the strongest currencies for lower risk and higher capital gains and income.
● A Nation of Takers: America's Entitlement Epidemic
By Nicholas Eberstadt
Debate with author via video from American Enterprise Institute
In an American Enterprise Debate on Wednesday, Nicholas Eberstadt of AEI and William Galston of the Brookings Institution squared off on whether America has become a nation of takers. As Eberstadt pointed out, a huge percentage of the American populace now receives transfer payments such as food stamps, Medicaid, Medicare, disability benefits, or Social Security. This indicates that the individualistic, hard-working fiber characteristic of American generations of the past has been supplanted by an entitled, self-centered mentality.
● Boom, Bust, Boom: A Story About Copper, the Metal that Runs the World
By Bill Carter
Summary via publisher, Scribner
Copper is a miraculous and contradictory metal, essential to nearly every human enterprise. For most of recorded history, this remarkably pliable and sturdy substance has proven invaluable: not only did the ancient Romans build their empire on mining copper but Christopher Columbus protected his ships from rot by lining their hulls with it. Today, the metal can be found in every house, car, airplane, cell phone, computer, and home appliance the world over, including in all the new, so-called green technologies. Yet the history of copper extraction and our present relationship with the metal are fraught with profound difficulties. Copper mining causes irrevocable damage to the Earth, releasing arsenic, cyanide, sulfuric acid, and other deadly pollutants into the air and water. And the mines themselves have significant effects on the economies and wellbeing of the communities where they are located.
● Founding Finance: How Debt, Speculation, Foreclosures, Protests, and Crackdowns Made Us a Nation
By William Hogeland
Summary via publisher, University of Texas Press
Recent movements such as the Tea Party and anti-tax “constitutional conservatism” lay claim to the finance and taxation ideas of America’s founders, but how much do we really know about the dramatic clashes over finance and economics that marked the founding of America? Dissenting from both right-wing claims and certain liberal preconceptions, Founding Finance brings to life the violent conflicts over economics, class, and finance that played directly, and in many ways ironically, into the hardball politics of forming the nation and ratifying the Constitution—conflicts that still continue to affect our politics, legislation, and debate today.
● The Founders and Finance: How Hamilton, Gallatin, and Other Immigrants Forged a New Economy
By Thomas K. McCraw
Review via Publishers Weekly
A Pulitzer Prize winner and Harvard Business School emeritus professor, McCraw sheds light on personalities and policies in this overview of the development of early American finance. The newly independent United States “had long been bankrupt”; both the fledgling national government and the states were in hock for the War of Independence. According to McCraw (Prophets of Regulation), brilliant immigrants, such as Alexander Hamilton and Albert Gallatin, lacked the parochial vision common to their peers, who saw the basis of wealth mostly in land. With at least 50 “coinages and currencies... in circulation” in 1789, banking was in turmoil. The main economic resource for the federal government was tariffs on imports, mostly from Britain. Hamilton’s decisive advocacy of a national bank and assumption of state war debts laid the basis for economic expansion and cemented the dominance of federal power. McCraw then turns to Gallatin’s ascendency in Congress, where in 1796 he denounced the growth in the national debt and decried high military spending.
Posted by jp at October 20, 2012 4:03 AM