economy

Stabilizing an Unstable Economy
$34.95
This is and has really re-emerged as a classic and prophetic book on the endogenous factors that drive instability. Again, the book is referred to a little too late and undoubtedly the same will happen in whatever next bubble next pops. To give a quick overview, most people study economic growth as as function of the economy's factors of production (including human capital) and their dynamics (modern economists are updating methods and ideas but people are still taught the solow growth model as foundational). The "trajectory" of an economy is usually smooth and the stochastic growth drivers/detractors are technology and exogenous shocks, where exogenous are not known from a substance or timing perspective a priori. Minsky explores a form of instability that is not discussed in most growth models, he discusses the instability that is embedded in our economies resulting from the use of currency its fluctuation from being scarce to abundant.

To me his insights as to the dynamics of what drives asset bubbles, in particular, banks propensity to lend as well as agents propensity to borrow against assets as a function of recent history was so spot on it makes you smile were it not so sad that it just happened. Minsky has identified a particularly dangerous form of the animal spirits that Keynes and more recently Schiller have written about, especially in a fiat currency environment in which we are separated from the pricing of money mechanism that the central bank is empowered to control. This book is worth reading for a multitude of reasons. Not only does it make one think about the worlds inherent instability, for which no obvious solution exists, it reminds us that we need to work on policy that tries to generate negative feedback to counteract the positive feedback to take us from hedge finance, to speculative finance, to ponzi finance.

After reading this book, one is not an expert able to give a solution to endogenous money and asset price shock risks, but one can understand the problem much more deeply. Given the dynamics driving the instability isnt stationary and central bank measures often take a long time to filter through (obviousy example being raising rates yet continuation of property speculation) more time needs to be spent on what policy might induce counterbalancing feedback. After reading Minsky one can read policy recommendations and get a more complete sense of the influence and the merit in things like bank capital cushions being used to dampen multiyear volatility. This has always been a must read, but the recent and ongoing crisis is another re-affirmation to add this to ones cart.

America's Bubble Economy: Profit When It Pops
$24.95
After reading everything I could find on the economy and general economics, these guys explained the mess in near perfect ways. It was written a couple of years prior to todays mess (jan 2009) but they got almost all of it right. Yes they repeat, which is good for slow learners like me, and also for those of us who just cant believe how crazy this all is. As a business owner that just could not understand the craziness of it all, I found this book to confirm my thoughts, and that makes me feel more in control of my future. This country is cooked for the near term and should have understood what Wiedemer was saying all along.

Deep Economy: The Wealth of Communities and the Durable Future
$14.00
When I read this book I kept reading passages that made me desire to buy more copies and send to specific of my friends as McKibben brings up so many issues that I have heard expressed regarding the need for a sustainable human built-environment, as well as sustaining the resource of traditional trades.

Preservation of old buildings, and the people who practice the craft of historic preservation, is not solely about a near-religious fixation on ancestor worship. It is also about not discarding the embedded energy and resource of the existing built environment, and a conscientious understanding of how most optimally to preserve that previously expended use of energy resources, and it is this perspective that the practitioners of traditional trades embody in a collective knowledge. To bring these people together to share in their knowledge is to build a sustainable community toward a durable future.

You can paint it GREEN if you so desire, but it is so much more than choice of a color pallet.

"Consider the most influential new program on television in the last decade, Survivor, which ushered in the reality show craze. Along with its uncountable offspring, it operates on the premise that the goal is to end up alone on the island, to manipulate and scheme until everyone else goes away and leaves you by yourself with your money"

And then we have the father of balloon boy.

Can one say that Richard Heene and his family is not living out the American dream, or soon to be nightmare, in a sort of modern morality play of Everyman as reinforced by our mass-news media?

I have been building a UFO out of cast iron for many years now... on a test flight of an early prototype it sunk off the south shore of Long Island. Possibly I should have called the Coast Guard? Or possibly the answer to capture maximum broad-band exposure is more gas and we purchase more better duct tape?

After many years of working in the construction industry I am often struck, and a bit outraged, at the prevailing public opinion that the low bidder on a project, particularly one paid for by taxes, is the least cost and the most efficient. On the surface it makes sense that we would want to pay less for more, or for just enough, but once the public spotlight on a project is gone, once a project goes into contract there are a whole host of "hidden" costs. These are costs that are in the interest of various players, particularly the ones who receive the windfall, to want to keep hidden. The name of the game is to bid low, which assures getting the project, then fight for change orders on every single discrepancy that can be fought over. It makes for a cantankerous work environment. Contractors who master the low-bid game also master the change order process. I say this as the largest change order I was ever involved in manipulating, from the contractor side, was $2.5M and it had more to do with bureaucratic incompetence than it had to do with necessity. Give it a few years later and the entire project would likely be done over again at an even higher cost. There are techniques of manipulation and negotiation that one learns as in any profession.

None of this low-bid outrage has much to do with Bill McKibben's book, least ways not much on the surface. This book sat on the corner of my work desk for more than a year before I finally picked it up. In part my slowness in taking it on had to do with the recession, having to work hard enough already to stay solvent and not wanting to focus on those problems, and a reluctance to maybe look at what is hidden beneath our current economic trends. There is one thing that comes out to me very strongly in the current economy, and that is that healthy community, connections, relationships, networking is vital to our personal survival. That is a bit of what McKibben talks about, the relationship of hyper-individualism, the uninhibited pursuit of number-one as opposed to the common good, and posits this social relationship against a backdrop of a closed-earth system with a limitation on progressive growth, and a limitation on the resources of energy, and a strain on the natural environment that human life itself is dependent upon.

Something that I picked up on in New Orleans post-Katrina is that the historic structures that survived tended to be built not only in survivable areas, but with local materials (cypress for example, plaster made with burnt oyster shells for another) that were understood by the local building culture to be appropriate, but also that the local building culture had been influenced by centuries of French experience in Equatorial and tropic climates. And yet, post-Katrina one of the problems encountered was the tendency of sheetrock to get black mold (unlike with plaster, and who knows how much of the sheetrock came from China and may contain poisons?), or the replacement of exterior doors or windows with the latest mass-manufactured big-box substitute. McKibben in one passage talks about local forest harvests and what some may call "alternative" building technologies that re-jigger the mass production economics in the building industry (think home building industry, and was it not the home building industry, mortgages etc. that fueled the last economic bubble?) to increase local labor (decentralized, potentially in work teams, as in communal and/or barter exchange) and in the end come out not only less expensive in the long-range (avoidance of long-term debt and usury) and often with materials that can be replenished within one human's lifetime.

Regardless what one believes about climate change it is fairly obvious that humans are running out of resources as populations increase, and as emerging 'growth' populations take on a rapidly expanding conversion of non-renewable energy resources -- but what is not so easily noticed is the hidden costs of our state of mind, of the ferocity of our individualism, our demand that an individual has a right to rise to the top "by their own efforts". Unfortunately nobody rises by their own efforts, they rise by the efforts of the community that selects and supports them to rise. One can bend the language to create a myth of self-reliant individualism, but it remains just that, a myth.

One of the things that I hear, and feel, is that a long-term sustainable economic recovery cannot be obtained if we continue to push toward "progress" in the same manner as got us to where we are now, and that a future economy will need to be different, will need to be more communal... and I mean this in the sense that not every home needs to be a McMansion, and not every McMansion needs three cars and a speed boat too large to trailer behind their SUV. McKibben provides a host of examples and contemplation on the hidden costs and the need for sustainable, local, community based economic models. What I come away with is looking at the immediate lives around me, my own included, and a desire to figure out how to make sensible adjustments toward a sustainable business model and life.

Economics Explained: Everything You Need to Know About How the Economy Works and Where It's Going
$15.00
This is a readable, non-technical and socially-aware introduction to basic economics. It is as good a mainstream introduction to basic economics and serves as an excellent companion to other prescribed introductory textbooks.