THE TRUTH ABOUT THE NATIONAL DEBT

FIVE MYTHS AND ONE REALITY

A career technocrat's immensely informative, albeit against- the-grain, analysis of the perceived problems of federal budget deficits. Drawing on more than four decades' experience as a Washington insider (as a senior government economist under seven presidents and as head of the Federal Retirement Thrift Investment Board), Cavanaugh offers a remarkably clear, often engrossing rundown on government finance by setting the record straight on frightening fictions that have become staples of political rhetoric. First off, the author puts paid to any notion that the national debt imposes an unconscionable burden on future generations, arguing that the country owes its grandchildren progress in the utilization of human and material (rather than financial) resources. Nor does he put much stock in the assumption that Big Brother crowds out private investment, because federal deficits tend to be greatest when the domestic economy is slumping and credit demand is low. Cavanaugh also addresses the widely held belief that the national debt's interest costs are unsustainable; while such expenditures are completely uncontrollable, they are manageable, he asserts, concluding that interest should not be included in the federal budget (whose principal purpose is to contain spending). The author goes on to dismiss fears that US debt is enriching either the affluent or foreigners, pointing out most obligations of the Treasury are held by and for the benefit of middle-income Americans. He also shows that there's precious little risk of default by the Social Security trust fund (which has nothing to do with the federal deficit). Cavanaugh finishes with some modest reform proposals, notably, introduction of a system that would make legislators more accountable by subjecting them to the discipline of levying new taxes whenever federal outlays exceeded budgeted receipts. An uncommonly sensible challenge to conventional wisdom on a complex issue that's sure to be a focus of partisan debate in the 1996 presidential election and beyond.

Pub Date: Sept. 9, 1996

ISBN: 0-87584-734-X

Page Count: 192

Publisher: N/A

Review Posted Online: May 20, 2010

Kirkus Reviews Issue: July 1, 1996

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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

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A readable, persuasive argument that our ways of doing business will have to change if we are to prosper—or even survive.

REIMAGINING CAPITALISM IN A WORLD ON FIRE

A well-constructed critique of an economic system that, by the author’s account, is a driver of the world’s destruction.

Harvard Business School professor Henderson vigorously questions the bromide that “management’s only duty is to maximize shareholder value,” a notion advanced by Milton Friedman and accepted uncritically in business schools ever since. By that logic, writes the author, there is no reason why corporations should not fish out the oceans, raise drug prices, militate against public education (since it costs tax money), and otherwise behave ruinously and anti-socially. Many do, even though an alternative theory of business organization argues that corporations and society should enjoy a symbiotic relationship of mutual benefit, which includes corporate investment in what economists call public goods. Given that the history of humankind is “the story of our increasing ability to cooperate at larger and larger scales,” one would hope that in the face of environmental degradation and other threats, we might adopt the symbiotic model rather than the winner-take-all one. Problems abound, of course, including that of the “free rider,” the corporation that takes the benefits from collaborative agreements but does none of the work. Henderson examines case studies such as a large food company that emphasized environmentally responsible production and in turn built “purpose-led, sustainable living brands” and otherwise led the way in increasing shareholder value by reducing risk while building demand. The author argues that the “short-termism” that dominates corporate thinking needs to be adjusted to a longer view even though the larger problem might be better characterized as “failure of information.” Henderson closes with a set of prescriptions for bringing a more equitable economics to the personal level, one that, among other things, asks us to step outside routine—eat less meat, drive less—and become active in forcing corporations (and politicians) to be better citizens.

A readable, persuasive argument that our ways of doing business will have to change if we are to prosper—or even survive.

Pub Date: May 1, 2020

ISBN: 978-1-5417-3015-1

Page Count: 336

Publisher: PublicAffairs

Review Posted Online: Feb. 17, 2020

Kirkus Reviews Issue: March 15, 2020

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