Now that shareholders have secured their right to exercise control, Gramm’s compelling account raises questions about where...

DEAR CHAIRMAN

BOARDROOM BATTLES AND THE RISE OF SHAREHOLDER ACTIVISM

The rise and triumph of shareholder activism through the previously unpublished letters of some of the U.S.'s most successful investors.

A hedge fund manager who also teaches investing at Columbia Business School, Gramm looks at a variety of case studies, including Benjamin Graham and Northern Pipeline, Warren Buffett and his involvement in American Express, Electronic Data Systems founder Ross Perot and his battle with Roger Smith of General Motors, and Carl Icahn, who is still successfully chasing money-making deals after 50 years. Their battles to maximize shareholder rights—through takeovers, leveraged buyouts, cash distributions, or sales of public companies with underperforming or even incompetent managers—are told through their own correspondence. In the letters, which sometimes take the official form of Securities and Exchange Commission filings, investors outline their objectives and the motives that drive them to act. In a straightforward narrative, Gramm threads a path through abstractions about the rights of corporate ownership and the obligations of governance, highlighting the many ways conflicts of interest can develop “as long as investors are motivated by financial gain, and as long as they determine the makeup of boards of directors.” The process he traces has led to circumstances under which we must ask the question, “why did shareholders triumph in the struggle for corporate control? Who were the key players that ushered in this period of so-called shareholder primacy?” Each of the battles he recounts involved different ways of valuing and realizing the asset value of companies. Political campaigns played their parts, as well, whether conducted behind the scenes or in the full glare of publicity. Now, writes the author, “judging activism purely based on stock performance can be tricky and superficial.”

Now that shareholders have secured their right to exercise control, Gramm’s compelling account raises questions about where and how the new situation will affect the continuing maximization of profits.

Pub Date: Feb. 23, 2016

ISBN: 978-0-06-236983-3

Page Count: 320

Publisher: Harper Business

Review Posted Online: Dec. 6, 2015

Kirkus Reviews Issue: Dec. 15, 2015

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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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Occasionally wonky but overall a good case for how the dismal science can make the world less—well, dismal.

GOOD ECONOMICS FOR HARD TIMES

“Quality of life means more than just consumption”: Two MIT economists urge that a smarter, more politically aware economics be brought to bear on social issues.

It’s no secret, write Banerjee and Duflo (co-authors: Poor Economics: A Radical Rethinking of the Way To Fight Global Poverty, 2011), that “we seem to have fallen on hard times.” Immigration, trade, inequality, and taxation problems present themselves daily, and they seem to be intractable. Economics can be put to use in figuring out these big-issue questions. Data can be adduced, for example, to answer the question of whether immigration tends to suppress wages. The answer: “There is no evidence low-skilled migration to rich countries drives wage and employment down for the natives.” In fact, it opens up opportunities for those natives by freeing them to look for better work. The problem becomes thornier when it comes to the matter of free trade; as the authors observe, “left-behind people live in left-behind places,” which explains why regional poverty descended on Appalachia when so many manufacturing jobs left for China in the age of globalism, leaving behind not just left-behind people but also people ripe for exploitation by nationalist politicians. The authors add, interestingly, that the same thing occurred in parts of Germany, Spain, and Norway that fell victim to the “China shock.” In what they call a “slightly technical aside,” they build a case for addressing trade issues not with trade wars but with consumption taxes: “It makes no sense to ask agricultural workers to lose their jobs just so steelworkers can keep theirs, which is what tariffs accomplish.” Policymakers might want to consider such counsel, especially when it is coupled with the observation that free trade benefits workers in poor countries but punishes workers in rich ones.

Occasionally wonky but overall a good case for how the dismal science can make the world less—well, dismal.

Pub Date: Nov. 12, 2019

ISBN: 978-1-61039-950-0

Page Count: 432

Publisher: PublicAffairs

Review Posted Online: Aug. 29, 2019

Kirkus Reviews Issue: Sept. 15, 2019

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