July 6, 2013
Book Bits | 7.6.13
● The Great Degeneration: How Institutions Decay and Economies Die
By Niall Ferguson
Excerpt via MSNBC
The voguish explanation for the Western slowdown is ‘deleveraging’: the painful process of debt reduction (or balance sheet repair). Certainly, there are few precedents for the scale of debt in the West today. This is only the second time in American history that combined public and private debt has exceeded 250 per cent of GDP. In a survey of fifty countries, the McKinsey Global Institute identifies forty-five episodes of deleveraging since 1930. In only eight was the initial debt/GDP ratio above 250 per cent, as it is today not only in the US but also in all the major English-speaking countries (including Australia and Canada), all the major continental European countries (including Germany), plus Japan and South Korea. The deleveraging argument is that households and banks are struggling to reduce their debts, having gambled foolishly on ever rising property prices. But as they have sought to spend less and save more, aggregate demand has slumped. To prevent this process from generating a lethal debt deflation, governments and central banks have stepped in with fiscal and monetary stimulus unparalleled in time of peace. Public sector deficits have helped to mitigate the contraction, but they risk transforming a crisis of excess private debt into a crisis of excess public debt. In the same way, the expansion of central bank balance sheets (the monetary base) prevented a cascade of bank failures, but now appears to have diminishing returns in terms of reflation and growth.
● Capitalism's Last Stand?: Deglobalization in the Age of Austerity
By Walden Bello
Summary via publisher, Zed Books
In this eye-opening and often scathing book, Walden Bello provides a forensic dissection of contemporary capitalism's multiple crises. Trenchant but constructive, Bello's analysis of the collapse of the global real economy - covering such issues as the Wall Street meltdown, the disintegration of the Greek economy and the rise of China - emphasizes the ever more pressing need to engage in a radical process of 'deglobalization' towards a decentralized, pluralistic world system. Only then will we be able to construct a fairer and more equitable society.
● Seeing What Others Don't: The Remarkable Ways We Gain Insights
By Gary Klein
Summary via publisher, Public Affairs Books
Insights—like Darwin's understanding of the way evolution actually works, and Watson and Crick's breakthrough discoveries about the structure of DNA—can change the world. We also need insights into the everyday things that frustrate and confuse us so that we can more effectively solve problems and get things done. Yet we know very little about when, why, or how insights are formed—or what blocks them. In Seeing What Others Don't, renowned cognitive psychologist Gary Klein unravels the mystery.
● The Metropolitan Revolution: How Cities and Metros Are Fixing Our Broken Politics and Fragile Economy
By Bruce Katz and Jennifer Bradley
Excerpt via The Brian Lehrer Show
A revolution is stirring in America. Cities and metropolitan areas are the engines of economic prosperity and social transformation in the United States. Like all great revolutions, this one has been catalyzed by a revelation: Cities and metropolitan areas are on their own. The cavalry is not coming. Mired in partisan division and rancor, the federal government appears incapable of taking bold action to restructure our economy and grapple with changing demography and rising inequality. In traditional political science textbooks, the United States is portrayed neatly as a hierarchical structure—the federal government and the states on top, the cities and metropolitan areas on the bottom. The feds and the states are the adults in the system, setting direction; the cities and metropolitan areas are the children, waiting for their allowance. The metropolitan revolution is exploding this tired construct. Cities and metropolitan areas are becoming the leaders in the nation: experimenting, taking risk, making hard choices, and asking forgiveness, not permission.
● Circle of Friends: The Massive Federal Crackdown on Insider Trading--and Why the Markets Always Work Against the Little Guy
By Charles Gasparino
Summary via publisher, HarperCollins
In Circle of Friends, award-winning journalist Charles Gasparino—one of Wall Street's most knowledgeable observers—follows government investigators and prosecutors as they pursue one of the most aggressive and broad-reaching series of insider-trading cases in the nation's history. A richly textured page-turner of investigative journalism based on extensive reporting, Circle of Friends chronicles the massive federal crackdown that has already put some of the biggest names on Wall Street behind bars, including Raj Rajaratnam, founder of the Galleon Group, and Rajat Gupta, a former CEO of consulting giant McKinsey & Co. Other similarly sized targets are still waiting nervously, including the biggest one of them all—financial impresario Steve Cohen of SAC Capital, the giant hedge fund that has confounded regulators for years by cranking out a steady stream of market-busting returns.
● Financial Crises, 1929 to the Present
By Sara Hsu
Summary via publisher, Edward Elgar
This fascinating volume offers a comprehensive synthesis of the events, causes and outcomes of the major financial crises from 1929 to the present day. Beginning with an overview of the global financial system, Sara Hsu presents both theoretical and empirical evidence to explain the roots of financial crises in general. She then provides a thorough breakdown of a number of major crises of the past century, both in the United States and around the world.
Posted by jp at July 6, 2013 4:27 AM