Best of Book Bits 2017 (Part I)

Another year (almost) over, but before the new one begins let’s highlight ten books focusing on money, investing, and economics that were published in 2017 and showed up in The Capital Spectator’s weekly Book Bits column at some point over the past 12 months. For one reason or another, this short list caught your editor’s eye. Let’s start with a downpayment of five books from 2017’s archive, followed by the balance next week. Happy reading!

e.thorpe● A Man for All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market
By Edward O. Thorp
Summary via publisher (Random House)
The incredible true story of the card-counting mathematics professor who taught the world how to beat the dealer and, as the first of the great quantitative investors, ushered in a revolution on Wall Street. A child of the Great Depression, legendary mathematician Edward O. Thorp invented card counting, proving the seemingly impossible: that you could beat the dealer at the blackjack table. As a result he launched a gambling renaissance. His remarkable success—and mathematically unassailable method—caused such an uproar that casinos altered the rules of the game to thwart him and the legions he inspired.

● The Complacent Class: The Self-Defeating Quest for the American Dream
By Tyler Cowen
Q&A with author via NPR
In a new book, The Complacent Class, economist Tyler Cowen argues that the United States is standing still. People have grown more risk averse and are reluctant to switch jobs or move to another state, he says, and the desire to innovate — to grow and change — has gone away. In an interview with NPR’s Rachel Martin, Cowen says he’s worried that more and more communities are self-segregating — by income, education or race.

● Adaptive Markets: Financial Evolution at the Speed of Thought
By Andrew W. Lo
Summary via publisher (Princeton University Press)
Half of all Americans have money in the stock market, yet economists can’t agree on whether investors and markets are rational and efficient, as modern financial theory assumes, or irrational and inefficient, as behavioral economists believe—and as financial bubbles, crashes, and crises suggest. This is one of the biggest debates in economics and the value or futility of investment management and financial regulation hang on the outcome. In this groundbreaking book, Andrew Lo cuts through this debate with a new framework, the Adaptive Markets Hypothesis, in which rationality and irrationality coexist.

● Upside: Profiting from the Profound Demographic Shifts Ahead
By Kenneth W. Gronbach with M.J. Moye
Interview with author via
Q: Your book is about predicting the future with accuracy. Can you explain why demographics provide clear evidence of where we’re headed?
A: Demographics precipitates economics — not the other way around. Commerce is reliant on market size, and market size is determined by demographics. Cultural shifts are determined by demographic changes. Demography is dependent on live births, deaths and migration, and so is politics. People are easy to count. It is math. So much of what people influence is determined by their number, their age, and where they are.

● Can We Avoid Another Financial Crisis?
By Steve Keen
Review via NakedCapitalism
At first glance this book seems too small-sized at 147 pages. But like a well-made atom-bomb, it is compactly designed for maximum reverberation to blow up its intended target.
Explaining why today’s debt residue has turned the United States, Britain and southern Europe into zombie economies, Steve Keen shows how ignoring debt is the blind spot of neoliberal economics – basically the old neoclassical just-pretend view of the world. Its glib mathiness is a gloss for its unscientific “don’t worry about debt” message. Blame for today’s U.S., British and southern European inability to achieve economic recovery thus rests on the economic mainstream and its refusal to recognize that debt matters.