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The rise and triumph of shareholder activism through the previously unpublished letters of some of the U.S.'s most successful investors.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

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