March 16, 2013
Book Bits | 3.16.13
● The Dividend Imperative: How Dividends Can Narrow the Gap between Main Street and Wall Street
By Daniel Peris
Q&A with author via The Globe and Mail
Q: You show that dividend payout ratios – dividends as a percentage of profits – for S&P 500 companies have fallen to 30 per cent, on average, from 50 per cent three decades ago. Why?
A: There are a lot of reasons. The one that I highlight is the relentless decline in interest rates. A lower interest rate allows companies to get away with offering a lower yield and still attract capital.
Q: And that’s a problem because …?
By taking their dividend payout ratios so low over the past three decades they have made investing in their companies to be a speculative endeavour rather than to be a business investment. To make money, you have to hope to sell the stock for a profit. People no longer view themselves as stakeholders in businesses they use on an everyday basis, but instead as speculators in the stock.
● Turnaround: Third World Lessons for First World Growth
By Peter Blair Henry
Q&A with author via Forbes
Q: Why did you decide to write this book and why now?
A: The world economy faces a critical moment. Former “Third World” nations have engineered a historic economic turnaround, becoming the emerging markets that now drive global growth. It seemed important to me that they did this with three decades of economic reforms that were pushed on them by the First World—nations now battered by crises, but whose governments appear loath to take their own prescriptions and seem trapped in ideological debates that today threaten to undermine their recovery. I was born in Jamaica but was educated by, and now serve, prestigious First World institutions, so I believe that I have a unique, dual perspective. To sidestep any biases I might have, I use the objective lens of the stock market to discover which policies actually delivered prosperity to emerging markets. Applying these lessons in the First World will, I believe, point a hopeful way forward for all nations.
● It's Not Over: Structural Drivers of the Global Economic Crisis
Summary via publisher, Oxford University Press
The recent world crisis, often likened to the Great Depression of the 1930s, has impacted the lives of millions of working people across the world. Quite dramatically, mainstream supply-side theories failed to predict the crisis. Moreover, these have treated the crisis as just another recession caused by a faulty fi nancial system—an argument that fails to explain why it has continued and spread, with little signs of abating. This book bringsthe real economy into focus and unravels how increased income and wealth inequalities have contributed to instability in the US and, thereafter, the world economy.
● The New Middle Class: Creating Wages and Wealth in the 21st Century
By Steve Gunderson
Summary via publisher, Greenleaf Book Group
In The New Middle Class, Gunderson explores the factors that caused the decline of America’s economic center and how we can build a middle class that is equipped for the realities of a twenty-first-century global economy. If we believe that a viable middle class is a critical part of a market-based democracy, this mission is of critical importance. Gunderson’s blueprint begins with a public and private sector commitment to substantial economic growth and investment in education. Calling for a new Middle Class Compact, he argues that the best core values of both political parties can enable Americans of all backgrounds to achieve real jobs and decent incomes. Higher incomes in turn lead to financial security—the true definition of wealth and the hallmark of a strong middle class.
● Game Theory: Anticipating Reactions for Winning Actions
By Mark L. Burkey
Summary via publisher, Business Expert Press
From its beginnings in the early 1900s game theory has been a very mathematical, technical subject. However, it also provides valuable, every day lessons that are important for managers and executives to understand. Current books and textbooks are mostly highly mathematical, and almost all are very long. This primer will deliver a focused and precise, but non-mathematical overview of topics in game theory that are directly relevant to managing an organization. Game theory is the science of action and reaction. While most standard economic analyses embody the science of making an optimal choice, this kind of analysis is largely undertaken in a vacuum. For example, every managerial economics textbook examines profit maximization for a firm to choose the optimal price and quantity given its cost structure and demand of its customers. However, when a firm raises or lowers its price, this is rarely the end of the story-competitors are likely to react by changing their prices and quantities as well. Game Theory adds in this extra layer of realism.
Posted by jp at March 16, 2013 3:58 AM