Book Bits | 5.11.13

Political Bubbles: Financial Crises and the Failure of American Democracy
By Nolan McCarty, Keith T. Poole & Howard Rosenthal
Excerpt via publisher, Princeton University Press
By political bubble, we mean a set of policy biases that foster and amplify the market behaviors that generate financial crises. Political bubbles are procyclical. Rather than tilting against risky behavior, the political bubble aids, abets, and amplifies it. During a financial bubble, when regulations should be strengthened, the political bubble relaxes them. When investors should hold more capital and reduce leverage, the political bubble allows the opposite. When monetary policy should tighten, the political bubble promotes easy credit.

Comeback: America’s New Economic Boom
By Charles R. Morris
Essay by author via Reuters
By 2020 or so, the United States is expected to surpass Saudi Arabia in oil output, and Russia in gas, according to the International Energy Association’s best estimate. By then all of North America should be self-sufficient in energy, which will do wonders for the U.S. trade deficit. Daniel Yergin, one of the world’s leading energy experts, estimates that the U.S. turnaround in energy has generated 1.7 million new jobs, including direct and “induced” employment, and that number should almost double by 2020. U.S. energy industry capital investment this year is expected to be $348 billion, or more than 2 percent of the gross domestic product.
The End Is Near and It’s Going to Be Awesome: How Going Broke Will Leave America Richer, Happier, and More Secure
By Kevin D. Williamson
Summary via publisher, Broadside/HarperCollins
In The End Is Near and It’s Going to Be Awesome, Kevin Williamson, a National Review Online contributor, makes the bold argument that the United States government is disintegrating—and that it is a good thing! Williamson offers a radical re-envisioning of government, a powerful analysis of why it doesn’t work, and an exploration of the innovative solutions to various social problems that are spontaneously emerging as a result of the failure of politics and government. Critical and compelling, The End Is Near and It’s Going to Be Awesome: How Going Broke Will Leave America Richer, Happier, and More Secure lays out a thoughtful plan for a new system, one based on success stories from around the country, from those who home-school their children to others who have successfully created their own currency.
Beyond GDP: Measuring Welfare and Assessing Sustainability
By Marc Fleurbaey and Didier Blanchet
Summary via publisher, Oxford University Press
In spite of recurrent criticism and an impressive production of alternative indicators by scholars and NGOs, GDP remains the central indicator of countries’ success. This book revisits the foundations of indicators of social welfare, and critically examines the four main alternatives to GDP that have been proposed: composite indicators, subjective well-being indexes, capabilities (the underlying philosophy of the Human Development Index), and equivalent incomes. Its provocative thesis is that the problem with GDP is not that it uses a monetary metric but that it focuses on a narrow set of aspects of individual lives. It is actually possible to build an alternative, more comprehensive, monetary indicator that takes income as its first benchmark and adds or subtracts corrections that represent the benefit or cost of non-market aspects of individual lives.
The Body Economic: Why Austerity Kills
By David Stuckler and Sanjay Basu
Reference via Reuters
Austerity is having a devastating effect on health in Europe and North America, driving suicide, depression and infectious diseases and reducing access to medicines and care, researchers said on Monday.
Detailing a decade of research, Oxford University political economist David Stuckler and Sanjay Basu, an assistant professor of medicine and an epidemiologist at Stanford University, said their findings show austerity is seriously bad for health.
In a book to be published this week, the researchers say more than 10,000 suicides and up to a million cases of depression have been diagnosed during what they call the “Great Recession” and its accompanying austerity across Europe and North America.
China’s Growth: The Making of an Economic Superpower
By Linda Yueh
Summary via publisher, Oxford University Press
China’s economic growth has transformed the country from one of the poorest in the world to its second largest economy. Understanding the drivers of growth remains elusive as the country is affected by both its transition from central planning and the challenges of a developing country. This book examines the main themes of growth, offering micro level evidence to shed light on the macro drivers of the economy. It also focuses on law and informal institutions of the economy to highlight the importance of entrepreneurship and the development of the private sector.