There’s a certain guilty, craning-to-see-the-accident pleasure in these pages, which could have benefited from a careful...

CONSPIRACY OF FOOLS

A chatty, overly long, but highly readable account of the collapse of Enron and the reasons the energy empire fell.

New York Times reporter Eichenwald (The Informant, 2001, etc.) is careful to separate what is reliably known from what can only be inferred in the Enron affair. Still, the narrative is rich in implication. Early on, for instance, Eichenwald ventures that top executive Andy Fastow threatened Enron head Ken Lay with some sort of exposure on being fired: “Had his chief financial officer, a man he had trusted implicitly, really been a crook all along?” Eichenwald quickly cautions that there’s much more to the collapse of Enron, an energy-trading firm that traded in many intangibles besides, than simple lawbreaking: “Shocking incompetence, unjustified arrogance, compromised ethics and an utter disregard for the market’s judgment all played decisive roles.” But then we’re back to crime or criminally stupid behavior: Here Enron execs are playing fast and loose with “squirrely numbers,” trying alternately to show profit where none existed or to hide profit, but sometimes paying far more tax than the law required; there they’re making incredibly poor investment decisions (“Skilling worked his jaw. . . . Seven billion dollars invested to earn $100 million in profits. Hell, if they had stuck the money in a bank account earning three percent, the earnings would have been higher!”). All the while, Lay hovers above the scene, merrily joining George W. Bush’s inner circle while apparently never quite grasping what was happening inside his own corridors of power—and placing trust in bad lieutenants, some of whom were “secret participants in Fastow’s schemes,” others of whom were simply bad. Interestingly, toward the end of the book, one of the few good lieutenants to emerge earns sidelong praise from Lay—namely, Sherron Watkins, the whistleblower who helped establish federal cases against the company and author of an early insider account of the debacle.

There’s a certain guilty, craning-to-see-the-accident pleasure in these pages, which could have benefited from a careful trimming. Likely not the last word on the Enron affair, but also likely to endure as a standard account.

Pub Date: March 8, 2005

ISBN: 0-7679-1178-4

Page Count: 750

Publisher: Broadway

Review Posted Online: May 20, 2010

Kirkus Reviews Issue: Dec. 15, 2004

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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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