Category: Books
*SuperFreakonomics*
Doing the math, you find that on a per-mile basis, a drunk walker is eight times more likely to get killed than a drunk driver.
The subtitle of the book is Global Cooling, Patriotic Prostitutes, and why Suicide Bombers Should Buy Life Insurance and you can pre-order it here. The authors are…come on guys…need I tell you?
The Harper and Collins press blurb offers this summary:
"SuperFreakonomics challenges the way we
think all over again, exploring the hidden side of everything with such
questions as:
- How is a street prostitute like a department-store
Santa? - Why are doctors so bad at washing their
hands? - How much good do car seats do?
- What's the best way to catch a
terrorist? - Did TV cause a rise in crime?
- What do hurricanes, heart attacks, and highway
deaths have in common? - Are people hard-wired for altruism or
selfishness? - Can eating kangaroo save the planet?
- Which adds more value: a pimp or a
Realtor?"
I would stress different angles. My favorite part of the book was the presentation of the List-Levitt critique of experimental economics. In particular the authors discuss whether the subject participants are more cooperative to begin with and also whether they are primed to please the experimenter. The biographical information on John List is fascinating. There is a very good revisionist account of the Kitty Genovese story; the neighbors didn't perform as miserably as many people think. Terrorists are especially likely to rent rather than buy, especially unlikely to take out life insurance (which doesn't pay off in cases of suicide), and likely to have a large number of cash withdrawals relative to other transactions.
Geo-engineering, as a response to global warming, receives more pages than any other single topic.
This book is recognizably in the style of Freakonomics, a book I suspect you already have made up your mind about. I will say only that SuperFreakonomics is a more than worthy sequel, a super sequel you might say. If you're a fan of Freakonomics, you'll like this too. This really is the fall season of big, big books.
*Too Big to Save*, by Robert Pozen
For the last two years I've been receiving requests — email and otherwise — for a readable, educating book on the financial crisis. And while various books on the crisis have had their merits, no one of them has fit that bill. Until now.
Robert Pozen's Too Big to Save: How to Fix the U.S. Financial System is the single best source for figuring out what happened. It is the go-to book if you are a non-specialist and want to understand: how credit default swaps work, the significance of Basel II, mark-to-market, how the various Fed bailouts operated, the meaning of the toxic asset plans, and many other matters.
This is not so much a presentation of a macro narrative on the crisis as an education manual on the moving parts. Its value stands above and beyond any particular partisan view. Pozen, by the way, offers policy recommendations at the rough rate of about one a page and most of them are quite micro. Even if I do not agree with everything he says, his proposals are unfailingly reasonable and well-argued and grounded in fact in some manner.
You can pre-order the book here.
Here is my previous post on the book.
By the way, Pozen does refer to blogs and he even cites blog posts.
What I’ve been reading
1. Arvind Panagariya, India: The Emerging Giant. Why didn't this book get more attention? It's by far the best treatment of the economics of contemporary India.
2. Dancing in the Dark: A Cultural History of the Great Depression, by Morris Dickstein. I put it down. I care about the topic but so much of the content is going through the motions rather than framing the argument around the author's original insights.
3. To Serve God and Wal-Mart: The Making of Christian Free Enterprise, by Bethany Moreton. It sounds like one of those whiny books on Wal-Mart. But I found it insightful throughout and also well-written; the main point is that Wal-Mart can be understood as driven by a Christian service ethos. Parts of it serve as a good economic history of the South and of chain stores and big box stores.
4. Ben Casnocha summarizing The Time Paradox.
5. Nicholson Baker, The Anthologist. Sometimes Baker hits the spot, but this one didn't hold my interest. Poets might like it.
In the pile is Robert Service's Trotsky, which is self-recommending. On DVD, I very much enjoyed watching Tyson, which is chockful of social science in narrative form.
Mullah maximization
It turned out the Shah's curators knew what they were doing. They had bought some outstanding contemporary paintings — including Warhol's Suicide (Purple Jumping Man) and the stellar Woman III — to fill the museum that was never built. Say what you want about the Ayatollah, but despite his public rhetoric about the decadence of the West, his regime knew valuable assets when it saw them. The regime hung onto the paintings, rather than burn them along with the American flag.
That is from Richard Polsky's new and fun i sold Andy Warhol (too soon). The book is a sequel of sorts to Polsky's earlier I Bought Andy Warhol. I am also a fan of Polsky's earlier Art Market Guides.
Eric Falkenstein’s *Finding Alpha*
The subtitle is The Search for Alpha When Risk and Return Break Down. I definitely liked this book. It's the best readable summary I know of why CAPM fails (see my comments here). Market data do not, upon examination, show a close connection between risk and return, at least not once you start moving out on the risk spectrum beyond T-Bills and the like. It's not just the famous Fama and French papers, it is worse than you think. I also like the author's "relative status" theory for why many people enjoy risk; it reminds me of Reuven Brenner, a neglected economist to this day.
More controversially, Falkenstein believes the equity premium is zero or near zero. I see it as positive but equilibration does not occur for at least two reasons. First, people don't like the thought that they are losers, and second, their spouses can criticize their investment decisions when temporary nominal losses come and last for years. In this sense my non-EFM view differs from his.
I recall someone in the blogosphere asking why this book does not overturn modern finance. It is a very good book. For it to "stick" it would need a clear empirical test of the relative status model of risk-taking vs. other models. We don't yet have that and I am not sure we ever will. There are too many conjectures consistent with Beta not much mattering for stock market returns and I am not sure the relative status model offers unique predictions within the realm of financial theory. The relative status model offers plenty of testable, and often confirmed, predictions elsewhere, but once we drop EFM we're in a world where choice and risk are context-dependent and we still have to prove it is relative status-driven risk-taking which regulates equity returns. That's very hard to do.
Here is one summary of the book. Here is Eric Falkenstein's blog.
Facts about Japanese health care, and *The Healing of America*
The Japanese are the world's most prodigious consumers of health care. The average Japanese visits a doctor about 14.5 times per year — three times as often as the U.S. average, and twice as often as any nation in Europe…The Japanese love medical technology; they get twice as many CAT scans per capita as Americans do and three times as many MRI scans. Japan has twice as many hospital beds per capita as the United States, and people use them. The average hospital stay in Japan is thirty-six nights, compared to six nights in the United States…Japan lags, though, in terms of invasive surgery; Japanese patients are much less apt than Americans to have operations such as arthroplasty, transplant, or heart bypass. This is partly economics — since the fees for surgery are low, doctors don't recommend it as often — and partly cultural. As a rule, Japanese doctors and patients prefer drugs to cutting the body. On a per-capita basis, the Japanese take about twice as many prescription drugs as Americans do.
Japan, by the way, has invented a smaller and more basic MRI machine, which costs about one-tenth of the cost of the machines used in the United States.
That is all from T.R. Reid's The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care. I thought this book was very readable, very interesting, and has very good information about different health care systems around the world. The author is extremely critical of the U.S. system; the premise of his book is that he takes his shoulder injury to doctors in many different countries. Since not much can be done for the shoulder, the expensive and complicated U.S. system doesn't come off looking very good. Not everyone will agree with the author's perspective but overall I recommend this book.
Two Million Books Printable on Demand
Two million out-of-copyright books that have been scanned by Google could come back into limited printed form after the search giant signed a deal with On Demand Books, the company that makes the Espresso Book Machine – a custom book printer able to produce a bound one-off 300-page paperback, with a full-colour cover, in about five minutes.
Books on duct tape
Duct tape is possibly the most useful single object in the entire
world outside of the wheel and Swiss army knives. Joe Wilson, a modern
design visionary if ever there was one, shows us how to rip, cut and
fold duct tape to make 18 amazing projects, including a wallet, a
barbecue apron, a lunchbox, a tool belt, a cell phone holder, a
baseball cap, rain gear for pets, a toilet roll cover and Halloween
masks.
We all need a lunch box constructed from duct tape.
If NASA insists that every Space Shuttle mission carries at least one
roll of duct tape then you need this book to satisfy your creative
urges. Buy Ductigami: The Art of the Tape – make something wonderful and gray.
The link is here and I thank Michelle Dawson for the pointer, which is in turn via this link on weird books. There you will also find a discussion of Dale Power's controversial Do-it-Yourself Coffins for Pets and People (check out the Amazon reader reviews) and other notable titles.
Three new classical liberal books on the financial crisis
Charles K. Rowley and Nathanael Smith, Economic Contractions in the United States: A Failure of Government.
Johan Norberg, Financial Fiasco: How America's Infatuation and Homeownership and Easy Money Created the Economic Crisis.
Nicole Gelinas, After the Fall: From Wall Street — and Washington.
My Favorite Review of Modern Principles
I have been reading your book and I must say I am most impressed. The layout is clear, the examples good but the writing is great! It is clear, concise, logical and interesting. I have to say I found it good reading. Congratulations.
Love Mum.
If you are interested in a review less tangled with the bonds of affection, Robert Whaples is teaching his principles of economics class using a pre-pub version of our textbook (micro and macro; fyi, more on micro in a few weeks) and he is is blogging his thoughts as he covers each chapter. Whaples conveys the flavor of our book very well.
Alex’s conniptions
The Voluntary City: Choice, Community and Civil Society, edited by David Beito, Peter Gordon, and Alex Tabarrok. It's very much anti-zoning. Here you can look inside the book. I am genuinely puzzled by this progressive meme that GMU economists don't speak out adequately against zoning and in favor of more diverse, more vital, and more practical urban environments.
What I’ve been reading
1. Why Photography Matters as Art as Never Before, by Michael Fried. The text is weak (and mostly skippable), but still this had high value for me. It's a look at how photography has become the centerpiece of contemporary art, starting with Jeff Wall and offering well-chosen color images from the leading creators. I had been needing a book like this.
2. The Narcissism of Minor Differences: How American and Europe are Alike, by Peter Baldwin. This book offers an onslaught of facts and statistics, toward the aim of showing that the United States and Europe aren't so different after all. You also can read it as a critique of purely statistical reasoning. At the very least, it's a good reference work even though I wasn't convinced by the central thesis.
3. Total Recall: How the E-Memory Revolution Will Change Everything, by Gordon Bell and Jim Gemmell. This is an exciting and prophetic book about taking the ideas of self-experimentation and self-recording to an extreme. Record your entire life and then do…?…with the data. Something, they'll figure it out. Just record the recorders and run regressions on what ends up working.
4. The Perfect Fruit: Good Breeding, Bad Seeds, and the Hunt for the Elusive Pluot by Chip Brantley. There is now a "go-to" book on the pluot and this is it. It explains why plums vary so much in quality, why plums are usually bad these days, how the pluot was intended as a replacement, and why some stores call them plumcots. I paid attention the whole way through.
5. The Informers, by Juan Gabriel Vasquez. I loved the first part, about the guy's relationship with his dying father, but found the wartime blacklist story only "good." Still, this is one of the better Colombian novels and I could imagine the author writing a truly great novel someday. Here is one good review.
6. Lorrie Moore, A Gate at the Stairs. Has any novel this year received better or more unanimous critical reviews? The writing is smart, beautiful, and quirky and Moore is not afraid to let her main character be weird. Still, I lost interest within one hundred pages and stopped reading. I am willing to admit the fault may be mine and over Christmas I'll try it again. Somehow I need more analytic structure in my fiction. If you look at the Amazon reader reviews, they make related points. Here is some background information on the book. Do let me know if you loved it.
7. Joyce Appleby, The Relentless Revolution: A History of Capitalism. My mouth watered at the thought of a popular (Norton) Joyce Appleby book on the origins of capitalism. It is intelligent throughout but it wasn't teaching me anything so I put it down. Skimming did not alter this impression. It is more a disappointment than a bad book but it is a disappointment nonetheless. All of a sudden she's afraid to take chances.
8. Strength in What Remains, by Tracy Kidder. It bored me and I stopped. It's OK but I view it as an inefficient blend of narrative and mild information about East African ethnic cleansing. Most critics praised it.
The new Pamuk book, due out in October, is phenomenal and is getting better each day.
Tyler Cowen and Russ Roberts podcast
I always enjoy chatting with Russ. Russ describes the dialogue as follows:
Tyler Cowen of George Mason University and author of Create Your Own Economy talks with EconTalk host Russ Roberts
about the ideas in his recent book. The conversation ranges across a
wide array of topics related to information, the arts, and the culture
of the internet. Topics include how autistics perceive information and
what non-autistics can learn from them, what Buddhism might teach us
about our digital lives, the pace of change in the use of technology,
Nozick's experience machine and the relative importance of authenticity
and what the Alchian and Allen theorem has to do with the internet and
culture.
*The Pattern in the Carpet: A Personal History with Jigsaws*
Many writers (including W.H. Auden, Georges Perec, Julian Mitchell, Julian Barnes, Ronald Harwood and Jonathan Raban) have been addicted to crossword puzzles, but I have never taken to them either. The hours of freedom from words are a relief to me, though of course I acknowledge that, paradoxically, I then seem to feel the need of words to try to analyse the nature of this freedom.
That's because writing is an illness. A chronic, incurable illness. I caught it by default when I was twenty-one, and I often wish I hadn't. It seemed to start off as therapy, but it became the illness that it set out to cure.
That is from the new Margaret Drabble book, which indeed is about her obsession with jigsaw puzzles. While I do not myself have an interest in jigsaw puzzles, or crosswords, I am nonetheless finding the book very interesting. It will baffle many of her traditional fans but that's probably for the better.
What I’ve been reading
1. The Idea of Justice, by Amartya Sen. This book is 415 pages of intelligent Sen-isms. Key themes are the importance of public reasoning, the plurality of reasons, and the possibility of an impartial approach to major ethical questions. We also learn that in 1938 Wittgenstein was determined to go to Vienna and give Hitler a stern lecture; he had to be talked out of it. At the end of it all I was more rather than less confused about what impartiality means. I don't blame that on Sen, but that says more about the book than any particular comment which I might make. It's a very good introduction to Sen's ethical thought but it's ultimately the Wittgenstein anecdote which sticks with me.
2. Await Your Reply, by Dan Chaon. This tripartite mystery about reinventing yourself has received rave reviews and Amazon readers are strongly positive. I read about one hundred pages and thought it was ably done but of no real substance.
3. How to Make Love to Adrian Colesberry, by Adrian Colesberry. My god this book is sick and I feel bad even telling you about it. It's exactly what the title promises and it has no business being discussed on a family-oriented economics blog. The language is explicit and the content is disgusting. It's also brilliant, funny, and unique. How often do I see a new approach to what a book can be? Once you get past the language and topic, it's actually about narcissism, why empathy is scarce, how we form self-images, how men classify and remember their pasts, and why management fad books are absurd.
4. A Paradise Built in Hell: The Extraordinary Communities That Arise in Disaster, by Rebecca Solnit. For many people
this may be a good book but I could not read far into it. The main
thesis is quite interesting, namely that people forms immediate islands
of community and cooperation during very trying times. The examples
include the San Francisco and Mexico City earthquakes, 9/11, and
Hurricane Katrina. But I found the ratio of information to page was
too low for my admittedly extreme tastes.
Here is an interesting bit on how emergencies inspire crowd cooperation, not panic.
5. Das Museum der Unschuld, by Orhan Pamuk. That's The Museum of Innocence in English, out in late October, but I found the German-language version in Stockholm. It's in his "Istanbul nostalgic" mode rather than his "I'm trying to be like Italo Calvino" style and it promises to be one of his very best books.