Book Bits For Saturday: 10.15.2011

Red Alert: How China’s Growing Prosperity Threatens the American Way of Life
By Stephen Leeb with Gregory Dorsey
Review via Publishers Weekly
he U.S. was galvanized by the terrorist attacks of September 11, but according to economist Leeb, what we should have been worrying about was the contemporaneous emergence of China’s enormous impact on commodity conservation and use. By 2012, the Chinese will hold a leading position in every aspect of renewable energy. Leeb argues that we as a nation are not paying enough attention to the threat of China’s growing influence; he paints a picture of our government as fundamentally scattered and shortsighted, though his ire isn’t aimed at any particular administration. Our political and economic systems don’t lend themselves to tackling major problems until they reach crisis proportions, whereas the Chinese are relentlessly long-term thinkers (furthermore, their leaders don’t have to answer to a fickle electorate)… Terse, well-reasoned, and comprehensive, this is a much-needed shot in the arm for American complacency.

The Smartest Portfolio You’ll Ever Own: A Do-It-Yourself Breakthrough Strategy
Review via CBS MoneyWatch
Acclaimed and prolific investment author, Dan Solin, has written another terrific book that offers the reader timeless advice on building a portfolio. The Smartest Portfolio You’ll Ever Own concentrates on constructing a portfolio of low cost funds with a bent toward small cap and value stocks. Based on the Fama-French 3 Factor model, this type of portfolio construction can give you higher returns as compensation for taking more risk.
Portfolio Design: A Modern Approach to Asset Allocation
By Richard C. Marston
Excerpt via Investment News
There is a key concept in retirement planning that most Americans have not even heard of. That is the concept of a spending rule, a rate of spending in retirement that can be sustained through time. Foundations have spending rules that guide their activities through time. So must retirees, since they also must live off of their endowment — the wealth they have accumulated for retirement. If the retiree has a defined-benefit retirement plan, spending can be tied to the income from that plan (plus Social Security). Most of us are not fortunate enough to have such a plan. For the many Americans with only defined-contribution retirement plans, there is no guaranteed income from those plans, and retirement spending must depend on returns from accumulated wealth. So a spending plan is necessary.
The Age of Equality: The Twentieth Century in Economic Perspective
By Richard Pomfret
Summary via publisher, Harvard University Press
In 1900 the global average life expectancy at birth was thirty-one years. By 2000 it was sixty-six. Yet, alongside unprecedented improvements in longevity and material well-being, the twentieth century also saw the rise of fascism and communism and a second world war followed by a cold war. This book tells the story of the battles between economic systems that defined the last century and created today’s world.
Keynes Hayek: The Clash that Defined Modern Economics
By Nicholas Wapshott
Summary via publisher, WW Norton
Can government fix a broken economy? Two great economists disagreed eighty years ago, and their debate dominates politics to this day.As the stock market crash of 1929 plunged the world into turmoil, two men emerged with competing claims on how to restore balance to economies gone awry. John Maynard Keynes, the mercurial Cambridge economist, believed that government had a duty to spend when others would not. He met his opposite in a little-known Austrian economics professor, Freidrich Hayek, who considered attempts to intervene both pointless and potentially dangerous. The battle lines thus drawn, Keynesian economics would dominate for decades and coincide with an era of unprecedented prosperity, but conservative economists and political leaders would eventually embrace and execute Hayek’s contrary vision. From their first face-to-face encounter to the heated arguments between their ardent disciples, Nicholas Wapshott here unearths the contemporary relevance of Keynes and Hayek, as present-day arguments over the virtues of the free market and government intervention rage with the same ferocity as they did in the 1930s.