Book Bits | 1 February 2020

Arguing with Zombies: Economics, Politics, and the Fight for a Better Future
By Paul Krugman
Interview with author via
The zombies that haunt Paul Krugman aren’t undead people, but ideas — false ideas about how the economy works that just won’t die, despite evidence proving them wrong. According to the New York Times opinion columnist and Nobel laureate in economics, they won’t die because politicians won’t let them. “The ultimate zombie, the one that you see most often, is that tax cuts pay for themselves,” Krugman told “Marketplace Morning Report” host David Brancaccio. This is the premise of Krugman’s new book, “Arguing With Zombies: Economics, Politics, and the Fight for a Better Future.”

Sabotage: The Hidden Nature of Finance
By Anastasia Nesvetailova and Ronen Palan
Review via Publishers Weekly
The finance industry profits not by making productive investments but through fraud and other crimes, according to this provocative yet haphazard exposé. Nesvetailova and Palan, economists at City, University of London, rehash a litany of misdeeds by financial institutions: Goldman Sachs sold clients investment deals it knew would lose money; Wells Fargo created accounts for clients without their knowledge and charged them extra fees; HSBC helped Mexican drug cartels launder money; mortgage lenders signed up unqualified borrowers and sold the bad mortgages to unsuspecting investors; and banks and insurance companies concocted murky financial instruments like credit default swaps and collateralized debt obligations to bamboozle investors, and used a variety of methods, including Cayman Islands shelters and bitcoin, to evade regulations and taxes. Nesvetailova and Palan argue that these scams and dodges aren’t the work of a handful of bad actors or the effects of deregulation, but a form of “sabotage” of competitive financial markets that companies must undertake to earn profits.

The Future Is Faster Than You Think: How Converging Technologies Are Transforming Business, Industries, and Our Lives
By Peter H. Diamandis and Steven Kotler
Summary via publisher (Simon & Schuster)
Technology is accelerating far more quickly than anyone could have imagined. During the next decade, we will experience more upheaval and create more wealth than we have in the past hundred years. In this gripping and insightful roadmap to our near future, Diamandis and Kotler investigate how wave after wave of exponentially accelerating technologies will impact both our daily lives and society as a whole. What happens as AI, robotics, virtual reality, digital biology, and sensors crash into 3D printing, blockchain, and global gigabit networks? How will these convergences transform today’s legacy industries? What will happen to the way we raise our kids, govern our nations, and care for our planet?

The Overtaxed Investor: Slash Your Tax Bill & Be a Tax Alpha Dog (revised edition)
By Phil DeMuth
Summary via
The 2017 Trump Tax Cuts and Jobs Act has lowered tax rates for the beleaguered American taxpayer. We live in a Golden Age of Taxes. The clock is ticking. The Trump tax cuts are slated to expire in 2025, while a regime change in Washington could undo them as early as 2021. Like grave robbers opening King Tut’s tomb, Congress — with no debate or public discussion — plans to raid your retirement accounts for even more money under the so-called “SECURE” Act. Hang on to your wallet.

Curing Corporate Short-Termism: Future Growth vs. Current Earnings
By Gregory V. Milano
Excerpt via Fortuna Advisors
The quarterly earnings call has taken on increasing importance for public company managers and often triggers decisions that limit success over the longer term. Executives tend to fear that their share prices will crater if they don’t deliver earnings per share (EPS) that meets or exceeds consensus estimates.
And their reaction may be justified in the short term. Fortuna Advisors’ research shows that, over a single quarter, beating consensus estimates of securities analysts had a larger effect on share prices than whether EPS improved. But when we extend the timeframe to a year and beyond, we found that EPS growth over the prior period mattered more than beating consensus.