Book Bits | 7.7.2012

Behavioral Finance and Investor Types: Managing Behavior to Make Better Investment Decisions
By Michael Pompian
Excerpt via publisher, Wiley
Why are somany people across the United States and other developed (and currently developing countries) in a position to accumulate wealth but have such a difficult time doing so? More often than not, the reason for this failure is that one’s own financial choices and behaviors sabotage otherwise well-intentioned efforts to achieve stated financial goals—assuming one’s goals are stated. For the purposes of this book, we will leave aside any discussion of the current outlook for the global economy, take no notice of the wealth distribution or wage levels, and stick primarily to the subject of personal financial management.

Einstein of Money: The Life and Timeless Financial Wisdom of Benjamin Graham
By Joe Carlen
Review via The Economist
Before Benjamin Graham started to work on Wall Street, investment analysis was a hit-and-miss affair, focusing more on recent price movements than on the merits of individual companies. Graham, a brilliant mathematician, took the process to a much higher level. By doing so, he inspired a generation of investors, including Warren Buffett, one of the world’s richest men, who studied under him. Graham showed it was possible to find companies that were underpriced by the market, often because investors were too focused on short-term bad news. This “value” approach, based on careful analysis of a company’s cashflows and balance-sheet, is still popular today.
Genesis of the Financial Crisis
By Roderick Macdonald
Summary via publisher, Palgrave Macmillan
A complete and accessible explanation of the factors contributing to the onset of the 2007 financial and economic crisis. The myriad factors are explained in an orderly way with simple terms. The anticipation (or not) and reception of the crisis by mainstream economists and by Austrian economics leads to reflection on the state of economic theory.
Delusions of Power: New Explorations of the State, War, and Economy
By Robert Higgs
Summary via publisher, Independent Institute
Why has the U.S. government become a growing threat to the civil and economic liberties of ordinary Americans? Does the nation suffer from a lack of democracy or have we deluded ourselves into believing that democratic institutions can deliver more than they actually can? Is contemporary democracy the best political system for securing the blessings of liberty—or should we search for better alternatives to government as we know it? In Delusions of Power: New Explorations of the State, War, and Economy, economist and historian Robert Higgs offers penetrating insights about fundamental issues surrounding democracy and the legitimacy of the state, as well as fresh observations about the turning points in American history during the past century: the world wars and the Cold War; the post-9/11 national-security state; and major economic calamities, including the financial crisis of the 2000s.
The Economists’ Voice 2.0: The Financial Crisis, Health Care Reform, and More
Edited by Aaron Edlin and Joseph Stiglitz
Summary via publisher, Columbia University Press
This collection contains thirty-two essays written by academics, economists, presidential advisors, legal specialists, researchers, consultants, and policy makers. They tackle the plain economics and architecture of health care reform, its implications for society and the future of the health insurance industry, and the value of the health insurance subsidies and exchanges built into the law. They consider the effects of financial regulatory reform, the possibilities for ratings reform, and the issue of limiting bankers’ pay.
Rethinking the Keynesian Revolution: Keynes, Hayek, and the Wicksell Connection
By Tyler Beck Goodspeed
Summary via publisher, Oxford University Press
While standard accounts of the 1930s debates surrounding economic thought pit John Maynard Keynes against Friedrich von Hayek in a clash of ideology, this reflexive dichotomy is in many respects superficial. It is the argument of this book that both Keynes and Hayek developed their respective theories of the business cycle within the tradition of Swedish economist Knut Wicksell, and that this shared genealogy manifested itself in significant theoretical affinities between the two supposed antagonists. The salient features of Wicksell’s work, namely the importance of money, the role of uncertainty, coordination failures, and the element of time in capital accumulation, all motivated the Keynesian and Hayekian theories of economic fluctuations.