Despite some overwrought generalizations, this is a trove of well-researched, underreported international data that will be...




A macroeconomic travelogue and lively jeremiad against expansionist monetary policies around the globe.

David (Australia: Boom to Bust, 2014) warns that excessive currency printing by central banks is inflating asset values, particularly those of real estate and stocks. These bubbles are doomed to burst, he contends—probably by 2017. In this book, he reviews how mortgage-backed securities and collateralized debt obligations triggered the 2008 global financial crisis and then compares the Federal Reserve’s actions before and after it. He argues that monetary easing should have ended in 2010, using an analogy of an emergency shot of morphine (as opposed to heroin addiction). Japan, Europe, China, and his native Australia each merit chapters in which he surveys central-bank profligacy and economic indicators, focusing on the widening gap between wages and housing costs. To avoid another meltdown, David recommends stricter mortgage rules, such as limiting mortgages to 70 percent of purchase price, requiring 10 months of payments in a reserve account, and prohibiting loans with payments exceeding 30 percent of household after-tax income. He also urges central banks to raise minimum interest rates to 4 percent by 2017 to help retirees and savers earn income without further fueling asset bubbles. David writes in a breezy, informal style that leavens his gloomy predictions, lightens his subject’s heft, and beckons lay readers. That said, he does risk leaving some people behind with unfamiliar terms such as “Tier 1 capital requirements” or “Basel III”—referenced early on but not defined as “agreements that bind all global banking institutions” until more than 150 pages later. Similarly, he coins and uses the term “IZNOP” (“Ponzi” spelled backward) to describe credit-fueled, asset-inflating business models but doesn’t explain it until Chapter 5. The concept of quantitative easing as an addiction is by now a familiar trope, and David doesn’t resist such clichés here. However, he makes his points clearly and supports them with hard figures and easy-to-read tables. Although the text lacks citations, it does list its sources in order at the end. Overall, the idea that asset bubbles pose serious risk is persuasive, but the notion that a replay of 2008 is imminent seems hyperbolic.

Despite some overwrought generalizations, this is a trove of well-researched, underreported international data that will be new to many readers.

Pub Date: Feb. 24, 2015

ISBN: 978-1505251357

Page Count: 206

Publisher: CreateSpace

Review Posted Online: June 12, 2015

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


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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Essential reading for citizens of the here and now. Other economists should marvel at how that plain language can be put to...

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A French academic serves up a long, rigorous critique, dense with historical data, of American-style predatory capitalism—and offers remedies that Karl Marx might applaud.

Economist Piketty considers capital, in the monetary sense, from the vantage of what he considers the capital of the world, namely Paris; at times, his discussions of how capital works, and especially public capital, befit Locke-ian France and not Hobbesian America, a source of some controversy in the wide discussion surrounding his book. At heart, though, his argument turns on well-founded economic principles, notably r > g, meaning that the “rate of return on capital significantly exceeds the growth rate of the economy,” in Piketty’s gloss. It logically follows that when such conditions prevail, then wealth will accumulate in a few hands faster than it can be broadly distributed. By the author’s reckoning, the United States is one of the leading nations in the “high inequality” camp, though it was not always so. In the colonial era, Piketty likens the inequality quotient in New England to be about that of Scandinavia today, with few abject poor and few mega-rich. The difference is that the rich now—who are mostly the “supermanagers” of business rather than the “superstars” of sports and entertainment—have surrounded themselves with political shields that keep them safe from the specter of paying more in taxes and adding to the fund of public wealth. The author’s data is unassailable. His policy recommendations are considerably more controversial, including his call for a global tax on wealth. From start to finish, the discussion is written in plainspoken prose that, though punctuated by formulas, also draws on a wide range of cultural references.

Essential reading for citizens of the here and now. Other economists should marvel at how that plain language can be put to work explaining the most complex of ideas, foremost among them the fact that economic inequality is at an all-time high—and is only bound to grow worse.

Pub Date: March 10, 2014

ISBN: 978-0-674-43000-6

Page Count: 640

Publisher: Belknap/Harvard Univ.

Review Posted Online: April 30, 2014

Kirkus Reviews Issue: May 15, 2014

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