paper 0-520-21486-2 A thorough academic study of the biggest government bankruptcy in US history. Baldassare, a scholar at the University of California, Irvine, likens the Orange County crisis to other recent municipal crashes—up to a point. Despite its image as an affluent, lily-white enclave, Orange County fell victim to several problems: increased costs from rapid population growth, including an influx of poor immigrants who were especially heavy users of services; post—Proposition 13 financial constraints which precluded county government from raising taxes commensurate with the voters’ desire for services; and the recession of the early ’90s, which caused the state government to reduce aid to counties. To this familiar mix was added an exceptionally large measure of malfeasance. Attempting to provide more for less, the county treasurer (whose activities received virtually no oversight from other elected officials) pursued a highly risky investment strategy that led to a severe shortfall and, ultimately, the December 1994 bankruptcy filing. A special election to raise the sales tax resulted in a ringing (and predictable) defeat. County leaders then developed a plan that depended on drastically cutting services, especially for the poor. Although the bankruptcy officially ended within a year, the ultimate resolution depends on speculative litigation against a number of financial institutions with which the treasurer did business, and Orange County’s credit may be diminished for years to come. Since politicians in suburban counties across the country are under similar pressures to raise revenues without raising taxes, the Orange County scenario could recur, and Baldassare devotes his closing chapters to a discussion of lessons learned and recommendations for policy changes. Although Baldassare writes clearly, he makes no concessions to the general reader; surely the fact that the treasurer took financial advice from psychics deserves more than passing mention. But the book is directed at “policy makers and scholars,” for whom it should be illuminating. Sober and sobering. (86 tables, one map, one line figure)
Pub Date: June 1, 1998
ISBN: 0-520-21485-4
Page Count: 320
Publisher: Univ. of California
Review Posted Online: May 19, 2010
Kirkus Reviews Issue: April 15, 1998
A readable, persuasive argument that our ways of doing business will have to change if we are to prosper—or even survive.
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. 16, 2020
Kirkus Reviews Issue: March 15, 2020
A welcome contribution from a newcomer who provides both a different view and balance in addressing one of the country's...
A fresh, provocative analysis of the debate on education and employment.
Up-and-coming economist Moretti (Economics/Univ. of California, Berkeley) takes issue with the “[w]idespread misconception…that the problem of inequality in the United States is all about the gap between the top one percent and the remaining 99 percent.” The most important aspect of inequality today, he writes, is the widening gap between the 45 million workers with college degrees and the 80 million without—a difference he claims affects every area of peoples' lives. The college-educated part of the population underpins the growth of America's economy of innovation in life sciences, information technology, media and other areas of globally leading research work. Moretti studies the relationship among geographic concentration, innovation and workplace education levels to identify the direct and indirect benefits. He shows that this clustering favors the promotion of self-feeding processes of growth, directly affecting wage levels, both in the innovative industries as well as the sectors that service them. Indirect benefits also accrue from knowledge and other spillovers, which accompany clustering in innovation hubs. Moretti presents research-based evidence supporting his view that the public and private economic benefits of education and research are such that increased federal subsidies would more than pay for themselves. The author fears the development of geographic segregation and Balkanization along education lines if these issues of long-term economic benefits are left inadequately addressed.
A welcome contribution from a newcomer who provides both a different view and balance in addressing one of the country's more profound problems.Pub Date: May 5, 2012
ISBN: 978-0-547-75011-8
Page Count: 304
Publisher: Houghton Mifflin Harcourt
Review Posted Online: April 3, 2012
Kirkus Reviews Issue: April 15, 2012
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