Book Bits | 9.22.2012

Paying the Price: Ending the Great Recession and Beginning a New American Century
By Mark Zandi
Interview with author via Bloomberg TV (Sep 17)
U.S. Economy Doesn’t Need More Stimulus, Zandi Says: Mark Zandi, chief economist at Moody’s Analytics Inc., talks about federal stimulus programs and the impact on the U.S. economy. Zandi also discusses the U.S. budget deficit and Federal Reserve monetary policy. He speaks with Trish Regan on Bloomberg Television’s “Street Smart.”

Automate This: How Algorithms Came to Rule Our World
By Christopher Steiner
Review via USA Today
Christopher Steiner’s new book, Automate This: How Algorithms Came to Rule Our World, is a fascinating exploration of how the mathematics behind automated trading revolutionized business worldwide. But it is also a cautionary tale of how automated trading can get completely out of hand. As an example, he points to the “flash crash” of May 6, 2010. “At 2:42 PM on the East Coast, the markets began to shudder before dropping into a free fall. By 2:47 PM — a mere 300 seconds later — the Dow was down 998.5 points, easily the largest single-day drop in history. Nearly $1 trillion of wealth fell into the electronic ether.” He continues, “Some share prices crashed to one penny — as in $0.01 — rendering billion-dollar companies worthless, only to bounce back to $30 or $40 in a few seconds. Other stocks swung wildly up. At one point, Apple traded at $100,000 a share (up from about $250). The market had been gripped with violent turbulence and nobody knew why.”
What’s the Use of Economics: Teaching the Dismal Science after the Crisis
Edited by Diane Coyle
Summary via publisher, London Publishing Partnership
This book examines what economists need to bring to their jobs, and the way in which education in universities could be improved to fit graduates better for the real world. It is based on an international conference in February 2012, sponsored by the UK Government Economic Service and the Bank of England, which brought employers and academics together. Three themes emerged: the narrow range of skills and knowledge demonstrated by graduates; the need for reform of the content of the courses they are taught; and the barriers to curriculum reform.
Free Market Revolution: How Ayn Rand’s Ideas Can End Big Government
By Yaron Brook and Don Watkins
Q&A with co-author via Washington Times
Q: Today, many people tend to confuse the concepts of free markets, free trade, and fair trade with one another. How would you describe each?
Watkins: “Free markets” refer to the economy of a capitalist system. A market is free when the government outlaws force and fraud but otherwise leaves individuals free to produce and trade. In other words: no regulation, no wealth redistribution, just freedom.
“Free trade,” broadly speaking, is the activity that individuals engage in on a free market. In common usage, however, the term refers to measures that reduce or eliminate coercive restrictions on international trade, such as government-imposed tariffs, subsidies, and quotas.
“Fair trade” is an invalid term made up by those who want us to view free trade as unfair. But if fairness means justice, then free trade is fair trade. What could be more fair than an interaction that is voluntary and mutually beneficial? All of the actual problems and injustices commonly attributed to free trade are in fact the result of restrictions on freedom. The actual solution is more freedom—and not, as “fair trade” supporters advocate, less.
The Financial Domino Effect: How to Profit Now in the Volatile Global Economy
By Ben Emons
Summary via publisher, McGraw-Hill
Originated during the Vietnam War era, the Domino Theory has been used to describe how political unrest becomes contagious, resulting in a chain reaction of events—events that the most knowledgeable and astute observers can predict. The Financial Domino Effect gives you the insight you need to spot political and financial events that signal an impending fall of dominoes—and use this knowledge to direct your investing decisions for maximum profit and minimum risk. The book covers the disintegration of the European Monetary Union, liquidity traps, financial repression, complacency, and debt dynamics.
Intelligent Commodity Indexing: A Practical Guide to Investing in Commodities
By Robert Greer, Nic Johnson, and Mihir Worah
Summary via publisher, McGraw-Hill
In the mid-1970s, when Bob Greer scrolled through miles of microfilm in the basement of a public library in order to record commodity prices in his yellow legal pad, the idea of commodities being an investable asset class was way outside the mainstream. Now, it’s a multibilliondollar vehicle for achieving portfolio diversification and inflation hedging–and he and his colleagues have written the book on earning better returns than the indexes themselves! In Intelligent Commodity Indexing, Bob joins his fellow leaders of PIMCO’s Commodity Practice, Nic Johnson and Mihir Worah, in opening up commodity indexes. Never before has there been a more thorough explanation of how a commodity index works coupled with a powerful set of strategies for making it work for you.
Regulating to Disaster: How Green Jobs Policies Are Damaging America’s Economy
Review via The Weekly Standard
Diana Furchtgott-Roth, former chief economist at the Department of Labor and now a senior fellow at the Manhattan Institute (as well as a former colleague of mine at the Hudson Institute), likes to tilt at windmills, and in her latest book she has an opportunity to do so—and at actual windmills, no less…. She attempts, successfully, to show that the concept of “green jobs” is a fiction, that the 3.1 million such jobs the Obama administration claims to have created include a reclassification of employees at bicycle shops, drivers of hybrid buses, and manufacturers of paper cups with a “Save Energy” logo (but not of those without that imprint).