Sound post-Keynesian economic reasoning well argued—a book that one hopes, against the odds, the heads of the Federal...

BLUFF

THE GAME CENTRAL BANKS PLAY AND HOW IT LEADS TO CRISIS

A financial cri de coeur from a banking insider.

Hoda, an erstwhile derivatives trader with J.P. Morgan and Swiss Re, among other houses too big to fail, offers a variation on the trope that the last great financial crisis was the product of “the greed and deceit of commercial and investment bankers and traders.” There was that, to be sure, but the instability that has followed suggests, she argues, that a more complete truth lies elsewhere. She locates this in the complex interplay of central banks with the larger financial world, serving up a program that encourages investors to borrow even if it leads to more debt, “trying to create economic momentum by intimidating people with a continued reduction in purchasing power.” Tied up in this is an oddly tilted, sometimes paradoxical system that punishes thrift—because too much thrift leads to impoverishment in an economy premised on consumer spending—by lowering interest rates below that of inflation, “effectively taxing our savings.” In a sense, the banks’ bluff is that the game can continue even as people realize that it’s rigged. Hoda examines the evolution of central banks over a long, bumpy history of previous financial panics, offering sidelights on the abandonment of the gold standard. Of more immediate interest is her take on the difficulty of investing in such a climate of uncertainty, with the real winners being the traders who “aim to extract value by anticipating the actions of the central banks.” Writing accessibly and without undue reliance on jargon, Hoda dissects efforts at regulating the financial industry, such as the Dodd-Frank Act, which she considers one that “confused correlation with causality,” and advocates for zero inflation, job creation, and other stability-improving policies. On the present course, writes the author in closing, “investors will stop believing the central banks, even when they should.”

Sound post-Keynesian economic reasoning well argued—a book that one hopes, against the odds, the heads of the Federal Reserve and the Bank of England will entertain.

Pub Date: July 12, 2016

ISBN: 978-1-78074-813-9

Page Count: 288

Publisher: Oneworld Publications

Review Posted Online: May 5, 2016

Kirkus Reviews Issue: May 15, 2016

Did you like this book?

No Comments Yet

Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our...

THINKING, FAST AND SLOW

A psychologist and Nobel Prize winner summarizes and synthesizes the recent decades of research on intuition and systematic thinking.

The author of several scholarly texts, Kahneman (Emeritus Psychology and Public Affairs/Princeton Univ.) now offers general readers not just the findings of psychological research but also a better understanding of how research questions arise and how scholars systematically frame and answer them. He begins with the distinction between System 1 and System 2 mental operations, the former referring to quick, automatic thought, the latter to more effortful, overt thinking. We rely heavily, writes, on System 1, resorting to the higher-energy System 2 only when we need or want to. Kahneman continually refers to System 2 as “lazy”: We don’t want to think rigorously about something. The author then explores the nuances of our two-system minds, showing how they perform in various situations. Psychological experiments have repeatedly revealed that our intuitions are generally wrong, that our assessments are based on biases and that our System 1 hates doubt and despises ambiguity. Kahneman largely avoids jargon; when he does use some (“heuristics,” for example), he argues that such terms really ought to join our everyday vocabulary. He reviews many fundamental concepts in psychology and statistics (regression to the mean, the narrative fallacy, the optimistic bias), showing how they relate to his overall concerns about how we think and why we make the decisions that we do. Some of the later chapters (dealing with risk-taking and statistics and probabilities) are denser than others (some readers may resent such demands on System 2!), but the passages that deal with the economic and political implications of the research are gripping.

Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our minds.

Pub Date: Nov. 1, 2011

ISBN: 978-0-374-27563-1

Page Count: 512

Publisher: Farrar, Straus and Giroux

Review Posted Online: Sept. 4, 2011

Kirkus Reviews Issue: Sept. 15, 2011

Did you like this book?

A declaration worth hearing out in a time of growing inequality—and indignity.

ECONOMIC DIGNITY

Noted number cruncher Sperling delivers an economist’s rejoinder to life, liberty, and the pursuit of happiness.

Former director of the National Economic Council in the administrations of Presidents Bill Clinton and Barack Obama, the author has long taken a view of the dismal science that takes economic justice fully into account. Alongside all the metrics and estimates and reckonings of GDP, inflation, and the supply curve, he holds the great goal of economic policy to be the advancement of human dignity, a concept intangible enough to chase the econometricians away. Growth, the sacred mantra of most economic policy, “should never be considered an appropriate ultimate end goal” for it, he counsels. Though 4% is the magic number for annual growth to be considered healthy, it is healthy only if everyone is getting the benefits and not just the ultrawealthy who are making away with the spoils today. Defining dignity, admits Sperling, can be a kind of “I know it when I see it” problem, but it does not exist where people are a paycheck away from homelessness; the fact, however, that people widely share a view of indignity suggests the “intuitive universality” of its opposite. That said, the author identifies three qualifications, one of them the “ability to meaningfully participate in the economy with respect, not domination and humiliation.” Though these latter terms are also essentially unquantifiable, Sperling holds that this respect—lack of abuse, in another phrasing—can be obtained through a tight labor market and monetary and fiscal policy that pushes for full employment. In other words, where management needs to come looking for workers, workers are likely to be better treated than when the opposite holds. In still other words, writes the author, dignity is in part a function of “ ‘take this job and shove it’ power,” which is a power worth fighting for.

A declaration worth hearing out in a time of growing inequality—and indignity.

Pub Date: May 5, 2020

ISBN: 978-1-9848-7987-5

Page Count: 384

Publisher: Penguin Press

Review Posted Online: Feb. 26, 2020

Kirkus Reviews Issue: March 15, 2020

Did you like this book?

No Comments Yet
more