Review: Roubini on Crisis Economics

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Crisis Economics, by Nouriel RoubiniContinuing our year-long foray into the wilds of economic theory and the financial crisis…

Title: Crisis Economics: A Crash Course in the Future of Finance, by Nouriel Roubini and Stephen Mihm

Date: February 7, 2013 (#12)

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How often does one hear the lament that America lacks public intellectuals? Where have our Arthur Schlesingers and our Milton Friedmen gone? O tempora, o mores! 

Well, Mr. Roubini surely qualifies. Per Wikipedia:

Nouriel Roubini (born March 29, 1958) is an American economist. He anticipated the collapse of the United States housing market and the worldwide recession which started in 2008 and ended in 2009. He teaches at New York University‘s Stern School of Business and is the chairman of Roubini Global Economics, an economic consultancy firm.

There you have it. A wealthy, tenured, and preternaturally accurate prognosticator of doom. Mr. Roubini has been justly fêted at all the smartest parties on the Upper West Side, and he is a deft hand at explaining his theories to a lay audience to boot.

It is a shame Mr. Roubini chose to publish five years into the Age of Kindle. In olden days of dead tree books, this would have been just the sort of tome whose jacket any good bourgeois cosmopolitan would be proud to flash on the JetBlue shuttle from New York to D.C. (once one had finished the latest number of The Economist, naturally).

In the grand tradition of Jeff Foxworthy, “you might be a white collar” if you find the following passage chuckle-worthy:

However, not everyone bought into [efficient markets theory]. A popular joke among economists neatly captures its logical absurdities. An economist and his friend are walking down the street when they come across a hundred-dollar bill lying on the ground. The friend bends down to pick it up, but the economist stops him, saying, “Don’t bother—if it were a real hundred-dollar bill, someone would have already picked it up.”

Tee hee!

But we jest. This is actually quite a fine book, and it is nice to see someone of Mr. Roubini’s stature shun the lazy extremes of Right and Left in favor of a vigorously defended intellectual independence. The book offers a sort of Grand Unified Theory of financial crises, “synthesizing” insights of both Keynes and Schumpeter to form an almost perfectly centrist thesis, packaged and ready for PowerPoint presentation at a business school near you.

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Next: Church History in Plain English, by Bruce L. Shelley

Review: The Financial Crisis and the Free Market Cure

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The Financial Crisis and the Free Market Cure, by John A. AllisonToday, a perspective on the financial crisis from John A. Allison IV, former head of BB&T Corp. and current President & CEO of the libertarian Cato Institute.

For the non-specialists in our audience, Mr. Allison’s thesis is, shall we say, idiosyncratic, but his track record at the bailout-free BB&T earns him a degree of license to take a strong position on these matters. A brisk and bracing polemic.

Title: The Financial Crisis and the Free Market Cure: Why Pure Capitalism is the World Economy’s Only Hope, by John A. Allison

Date: February 9, 2013 (#6)

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Mr. Allison locates the roots of the 2008 financial crisis in a massive credit-driven misallocation of resources into residential housing consumption. He chooses his words carefully here: Mr. Allison views spending on housing as consumption, not investment, contrary to the popular view of housing equity as a form of retirement nest egg.

This misallocation, he argues, has been aided and abetted by the full alphabet soup of federal agencies: the Federal Reserve prints money, and the FDIC, SEC, Fannie Mae, Freddie Mac, HUD, and the FHA generally muddle about, manipulating markets for overtly political ends. (The IRS’s mortgage interest deduction is a key catalyst.)

This policy muddle, Mr. Allison argues, is largely a bipartisan affair, and the Clinton and Bush Administrations’ promotion of the subprime mortgage market through such means as the Community Reinvestment Act is profiled at length in these pages.

It’s a sordid tale, and a great many “streets” beyond Wall Street suffer the sting of Mr. Allison’s lash: Main Street, K Street, and Pennsylvania Avenue, to name a few, not to mention whatever tree-lined boulevards Standard & Poor’s, Fitch, and Moody’s call home. “A plague on all your houses” (literally) is the message here, and frankly speaking, there is blame enough to go around.

Debates over the financial crisis and the Dodd-Frank Act rage unabated, and since the terrain continues to shift daily, accessible surveys for the non-specialist remain relatively rare. Mr. Allison paints a vivid picture that will entertain and enlighten.

That said, I would be remiss if I neglected to note that The Financial Crisis and the Free Market Cure suffers a bit from the sort of “closed system” mentality that plagues many libertarian writings. The black hats and the white hats are here delineated with Manichæan rigor, and the proffered solutions have a whiff of laissez-faire utopia about them. Arguments fall effortlessly into place to form a magnificent (if unrealistic) edifice.

For those who have expressed a preference for less florid prose on this website, that is to say: Don’t expect these policies to be adopted anytime soon, at least until the inauguration of a President Paul (Ron or Rand, take your pick).

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Next: Crisis Economics: A Crash Course in the Future of Finance, by Nouriel Roubini and Stephen Mihm

 

Review: Left Turn

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Left Turn, by Tim GrosecloseToday, a rare foray into the dismal social sciences….

Title: Left Turn: How Liberal Media Bias Distorts the American Mind, by Tim Groseclose

Date: February 4, 2013 (#5)

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It is a commonplace on the Right (and, to be perfectly honest, everywhere else) that the mass media have an ever-so-slight difficulty with objectivity. Prof. Tim Groseclose marshals a number of social science arguments in a valiant attempt to prove the point with statistical rigor, relying largely on constructs like “Political Quotients” and “Slant Quotients.”

A couple of interesting takeaways:

  • The average “slant” of a New York Times news article is roughly equivalent to the average speech by Sen. Joseph Lieberman.
  • The most politically biased news articles (as opposed to editorials) may be found in….The Wall Street Journal [sic]. 

To calculate your own “Political Quotient,” Mr. Groseclose has a 40-question quiz on his website. A Superfluous Man’s is….inappropriate for disclosure in this non-partisan forum.

Mr. Groseclose is a far more articulate expositor of his own theory than I. I suggest that the below episode of Uncommon Knowledge with Peter Robinson will tell you everything might wish to know about the book:

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Next: The Financial Crisis and the Free Market Cure: Why Pure Capitalism is the World Economy’s Only Hope, by John A. Allison

Review: The Good German

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The Good GermanToday, a short review of a short Schrift.

Title: The Good German, by Joseph Kanon

Date: January 31, 2013 (#4)

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For those familiar with the history of occupied Berlin–perhaps thanks to Anthony Beevor’s excellent The Fall of Berlin 1945The Good German‘s plot will be relatively predictable. That will hold true whether you first come across it in the novel or the (excessively maligned) film by the same name, starring George Clooney and Cate Blanchett.

The novel and the movie share an excellent grasp of noir atmospherics and historical fiction. American males speak in a sort of jaded Sam Spade lockjaw yet are naïve softies at heart; British characters are perpetually drunk and disillusioned; the Soviets drunk and menacing; and the women suitably loose and mysterious.

A representative exchange between an English and an American character:

“You with the conference or have you just come for a look-in?” Brian said, playing with him.

“I’m not attending the conference, no.”

“Just come to see the raj, then.”

“Meaning?”

“Oh, no offense. It’s very like, though, wouldn’t you say? Military Government. Pukkah sahibs, really.”

“I don’t know what you’re talking about.”

“Well, neither do I, half the time,” Brian said pleasantly. “Just a little conceit of mine. Never mind. Here, have a drink,” he said, taking another, his forehead sweaty.

This is all quite well done. What with my recent gushing over Richard Rhodes’ The Making of the Atomic Bomb, I may just pick up a copy of Mr. Kanon’s previous novel, Los Alamos.

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Next: Left Turn: How Liberal Media Distorts the American Mind, by Tim Groseclose

Aram Khachaturian, in memoriam

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Prokofiev, Shostakovich, and Khachaturian (right)

Prokofiev, Shostakovich, and Khachaturian (right)

Well, technically, he has been requiescat-ing in pace since May 1, 1978, but a brief homage is due.

One of the great three Soviet composers–along with Prokofiev and Shostakovich–Khachaturian is probably best known in the United States for the “Sabre Dance” theme from his ballet, Gayaneh.


Point of trivia: The Soviet National Anthem (which remains the anthem of the Russian Federation, albeit with altered lyrics) was composed by Alexander Alexandrov and selected by Stalin from over 200 entrants to a contest in 1943. Shostakovich and Khachaturian’s joint entry was not selected, but became the Song of the Red Army.

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