Microeconomics Books

The Great Crash of 1929

John Kenneth Galbraith

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Customer Reviews:
Total reviews: 49 Average rating: 4.0 of 5

The History of Now 5 out of 5 stars.
4 of 4 people found this review helpful.

First published in 1954, this book is understandably piquing interest because of the current financial issues facing the United States and world. The causes of the 1929 crash do seem similar in many ways to the current issues of today in 2008. However, many circumstances are similar, as many are different.

But also similar, there seems to be a rule about the phenomenon of Karma in individual human behavior. And this rule of Karma seems to apply to investing behavior.

Author John Galbraith provides evidence for his argument that cheap and easy credit wasn't the major reason for the bubble-like conditions that led to the crash, but that the real factor was "speculation for the sake of speculating." Speculation for the sake of speculation caused prices to artificially rise to extremely high levels simply because investors were buying with the intent to sell for a profit ---> and the next buyer would do the same, and so on.

During the 1920s many conditions inside and outside of the US financial markets provided a sense of false prosperity which was actually based on greed and speculation for the pure sake of speculation. These strong aspects of human mind and behavior that propel steep rising bubbles and steep downward slides. It's interesting how human psychology plays such a large role when markets rise in bubbles and then sharply decline. Mania involves greed on the way up, and fear on the way down.

From this 50+ year-old book (with an update in the late 1990s), a reader will immediately realize some of the parallels of 1929 that exist in 2008: This does not mean the same results will happen, however. But they could happen....

Gailbrath notes the significant inequality in income distribution that existed in 1929, deregulation of the banking industry, poor leadership, and bad policy and decision-making by the government because of economic ignorance and myopia. This ignorance is referred to by the author as a lack of "economic intelligence." Today, look at the current cast of characters in their *appointed* economic-power positions, and the criticism they're receiving for not only what they did *not* do, but what they *did* do once the financial downward spiral started unraveling.

As a historian, the author also noted another concept from then that reminds us of current times: the Florida real-estate bubble of the 1920s. In addition to buying land, people could by the "option to buy land" on a piece of paper. They could then re-sell it, where the option would be re-sold and re-sold again, and so on, and so on. Again, speculation for the sake of speculation. These buy-options and other means, were creative financing, and over-extended lending, and excessive leveraging. Just like today, and just like then, the result was a hard fall.

Housing bubbles have happened before. A disturbing concept of until recently was people treating their owner-occupied home - the home a person lives in - as an speculative investment and ATM machine during the big leaps in equity increases. Conditions caused by human "bubble-behavior" on the way up, at the peak, and on the way down.

John K. Galbraith noted over 50 years ago in this book that "money doesn't grow on trees." Nor does money grow on Collateralized Debt Obligations (CDOs) that are fraudulently rated AAA when they are not, and then sold to the world. Credit Default Swaps, Helocs, ARMs, teaser rates, and NINJA. Money cannot be invented out of nothing. Call it Karma, physics, or the fundamental concepts of investing. Making money out of thin air can only last a short time, with negative consequences often the result. The author stated that as time passes and the seismic crash of '29 fades from memory only to be highlighted as a side-note in history books: that rampant speculation, greed, and bubbles will happen again, followed by an inevitable bust.

"Those who cannot remember the past are condemned to repeat it."
~ George Santayana, The Life of Reason, Volume 1, 1905

As a layman who consistently attempts to self-educate myself about economic events, I do see a similar, yet also very different type of crash happening today as in 1929. Currently I see it as a steady decline. A slow and steady decline, that will be long-term and bring a lower standard of living. People will to have change their focus about what is important in life, if they'll be able to cope with the new economic circumstances and world that we'll be living in.

This is a well-written and good historical book by Kenneth Galbraith.

Editorial Review:

Of Galbraith's classic examination of the 1929 financial collapse, the Atlantic Monthly said:"Economic writings are seldom notable for their entertainment value, but this book is. Galbraith's prose has grace and wit, and he distills a good deal of sardonic fun from the whopping errors of the nation's oracles and the wondrous antics of the financial community." Now, with the stock market riding historic highs, the celebrated economist returns with new insights on the legacy of our past and the consequences of blind optimism and power plays within the financial community.

Manias, Panics, and Crashes: A History of Financial Crises (Wiley Investment Classics)

Charles P. Kindleberger, Robert Aliber

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Customer Reviews:
Total reviews: 45 Average rating: 3.5 of 5

Relevant but hard to read 3 out of 5 stars.
5 of 5 people found this review helpful.

I am no economist and just an interested general reader. I expected to read narratives about past financial crises and how they played out. But this book is not organized that way. It doesn't tell any story from start to finish. Instead it references lots of different crises in a kind of shorthand way, without giving the background or the overall narrative.

Many of the references are pretty darn obscure, at least to me. So fine, if he's talking about how a certain phenomenon works and he says, "as in 1932," or "as in the S&L crisis," I'm with him. But when he says, "just as in the 1762 case in Belgium" (made up example)--well, my eyes start to glaze over, because he hasn't told me the story of 1762 Belgium, but referenced it as if it should be as familiar to me as the Great Depression in the US.

I also think there's something wrong with the writing style. He seems not to start out with topic sentences that show us where he's going, or to end with a summing up of the significance of what he's just said. Certain details recur within a few pages of each other. The effect is pretty scatter-shot, as if it was not carefully edited and made to flow.

There is plenty of raw material here for anyone watching our current economic crisis and wondering how it happened, but you have to work for it. What I get from it is that in certain circumstances, if everyone does what seems best to him or her in the market, the end result will be disaster for all. It's not really irrational to buy when prices are increasing by the day, because huge profits can indeed be made. But the more people that make that individually rational choice, the more irrational the whole thing becomes.

Maybe I could compare it to a stampede to an exit door in a fire. Each person's individual best choice is to get out as quickly as possible. But if you allow that psychological reality to play out, you might have people trampled to death at the door who then block everyone else from escaping.

Reading this was like listening to a rather elderly professor of history who is intimately familiar with many obscure incidents, but doesn't provide the context for his young students to follow his train of thought.

Editorial Review:

Manias, Panics, and Crashes, Fifth Edition is an engaging and entertaining account of the way that mismanagement of money and credit has led to financial explosions over the centuries. Covering such topics as the history and anatomy of crises, speculative manias, and the lender of last resort, this book puts the turbulence of the financial world in perspective. The updated fifth edition expands upon each chapter, and includes two new chapters focusing on significant financial crises of the last fifteen years.

Financial Armageddon: Protecting Your Future from Four Impending Catastrophes, Revised and Updated Edition

Michael J. Panzner

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Customer Reviews:
Total reviews: 35 Average rating: 4.0 of 5

Editorial Review:

From desperate interest rate cuts and chaos in global financial markets to the sub-prime mortgage crisis and a fast-crumbling tower of public and private debt, Wall Street insider Michael J. Panzner exposes the cracks in the dike, the looming economic threats, and the vast array of promises and obligations that will ultimately go unfulfilled.

How did we get to this place, and how can we protect ourselves from the fallout?

This revised and updated edition features a new introduction by the author on the predictions that have come to pass since the book was first published. It also provides a financial bomb shelter for every American by identifying the most pressing risks we face today as well as what we can do to survive the crisis:

• How an unraveling economy will affect each one of us
• When to sell, what to buy, and where to invest as the crisis unfolds
• The social, political, and geopolitical fallout from widespread financial upheaval

Everyone must learn of the disaster-in-the-making so they can protect themselves, their families, and their economic well-being—before it's too late. Financial Armageddon is today’s call to action.

Essays on the Great Depression

Ben S. Bernanke

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Total reviews: 8 Average rating: 3.0 of 5

Editorial Review:

Few periods in history compare to the Great Depression. Stock market crashes, bread lines, bank runs, and wild currency speculation were worldwide phenomena--all occurring with war looming in the background. This period has provided economists with a marvelous laboratory for studying the links between economic policies and institutions and economic performance. Here, Ben Bernanke has gathered together his essays on why the Great Depression was so devastating.

This broad view shows us that while the Great Depression was an unparalleled disaster, some economies pulled up faster than others, and some made an opportunity out of it. By comparing and contrasting the economic strategies and statistics of the world's nations as they struggled to survive economically, the fundamental lessons of macroeconomics stand out in bold relief against a background of immense human suffering. The essays in this volume present a uniquely coherent view of the economic causes and worldwide propagation of the depression.

Dan Rooney: My 75 Years With the Pittsburgh Steelers and the NFL

Dan Rooney

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Total reviews: 12 Average rating: 4.0 of 5

Editorial Review:

For the first time, Dan Rooney, chairman of one of the greatest NFL dynasties ever, the Pittsburgh Steelers--winner of five Super Bowls--tells his compelling life story.

In 2007, the Pittsburgh Steelers will turn seventy-five years old. So will Dan Rooney. In Dan Rooney, the owner talks about growing up on Pittsburgh's North Side, competing with Johnny Unitas for top high school quarterback honors in western Pennsylvania, learning the ropes of big-time sports from his father and mentor, Art Rooney ("the Chief"), helping to shape the modern NFL into America's all-consuming passion, and forging the Steelers into a Super Bowl-winning dynasty. He also speaks frankly about winning and losing, and discusses his relationships with family, coaches, players, owners, NFL commissioners, the media, and the fans--"Steeler Nation."

It's all here: the difficult contract negotiations, controversial decisions, memorable teams, and many behind-the-scenes stories of the growth of America's favorite game. A dedicated family man and proud native of Pittsburgh, this chairman of one of the most successful franchises ever reveals the dynamics that have made him such a respected owner in the NFL.

The Strategy and Tactics of Pricing: A Guide to Growing More Profitably (4th Edition) (Pie)

Thomas T. Nagle, John Hogan

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Customer Reviews:
Total reviews: 41 Average rating: 5.0 of 5

Best book on Pricing I have ever read 5 out of 5 stars.
0 of 0 people found this review helpful.

I have spent over 30 years in computer software sales, pricing, and terms and conditions. This book resonates with me, specifically with it's emphasis on sustained company profitability rather than get rich quick pricing. It's comprehensive, not specialized to any specific product set or industry, and nothing I read failed to make sense to me, based on my experience.

If you are interested in this topic, there is no better work I know of to give you both practical and good theoretical advice.

Editorial Review:

"The best book ever written about pricing is The Strategy and Tactics of Pricing by Tom Nagle and Reed Holden-these guys know their stuff and it works!" - Guy Kawasaki, CEO, Garage Technology Ventures "For more than a decade, this book has been the most influential and highly regarded reference among pricing professionals." - Eric G. Mitchell, President, The Professional Pricing Society "Most executives name pricing as their major challenge and major weakness. This book is an answer. It is full of new ideas arid insights." - Philip Kotler, S.C. Johnson & Son Distinguished Professor of International Marketing, Northwestern University "An investment in Tom and Reed's book will give you the highest return you've ever had. It's an investment you can't afford not to make." - Dan Nimer, President, DNA Group

Principles of Microeconomics

N. Gregory Mankiw

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Total reviews: 9 Average rating: 4.5 of 5

extremely narrow 1 out of 5 stars.
15 of 18 people found this review helpful.

Joseph Schumpeter once encouraged his readers to make up their mind whether they wanted simple or useful answers, because both could not be had at the same time. Mankiw opts for the former option. A student who knows little about economics and who will be exposed to the discipline for the first time by using this textbook will get a very narrow view of economics. He or she will have no idea that there are strong disagreements about economic phenomena and even different schools of thought. This can be expected: Mankiw is a neoclassical economist, that school is dominant for one reason or another, so few would expect him to go out of his way to point out that there are different intellectual traditions in economics. However, Mankiw does not even bother much to point out disagreements within the mainstream either. For him, economics is a quasi-scientific discipline that clearly explains how things are; thus, economists disagree solely because of values.

That is a gross mischaracterization: neoclassical economists disagree a lot on theoretical issues, too. Mankiw's own colleague at Harvard - Dani Rodrik - described these disagreements mainly springing from the division between "first-best economists" and "second-best economists". The former group (Becker, Cowen, Mankiw) almost always finds a solution in the supply-demand framework and competitive markets. The latter group (Stiglitz, Rodrik, Akerlof) search for more nuanced and contextual explanations. Mankiw's only reference to "second-best" issues like imperfect information and behavioral economics is relegated to a couple paltry pages in the end of the book where it can be safely forgotten. The minimum wage is a case in point: Mankiw uses the simple supply-demand framework to "prove" that minimum wage causes unemployment. In fact, this view has lost popularity even among neoclassical economists. Recently over 600 American economists (including several Nobel laureates such as one of the fathers of modern neoclassical economics Kenneth Arrow!) signed the petition to increase the minimum wage in the US. Some of the most important research disproving Mankiw's claim has been done by people as mainstream as David Card (Berkeley) and Alan Krueger (Princeton).

Trade is another example. When arguing for "free" trade, Mankiw goes through possible counterarguments. The "infant industry" argument (supported by the "father" of economics Adam Smith himself) is dismissed after one paragraph. If these infant industries are of any promise, Mankiw proclaims, the private sector will take them up. Never mind uncertainty (not risk, but uncertainty). Never mind the fact that the US used protective barriers designed by Hamilton to allow its industries mature, never mind the fact that Japan and Korea developed using the same method. Never mind the fact that a very recent Commission on Growth and Development (which includes someone as mainstream as the Nobel laureate Bob Solow) concluded that "Government intervention in the economy, and a degree of protectionism, will be needed in the early stages of development".

My final example is the agency assumption. To act with a degree of self-interest is one thing, but to be a selfish and calculating sociopath is another. The mainstream is more and more open to alternative ideas about agency. Kenneth Arrow himself once said that if human beings were to act as utility-maximizers all the time, society and all of its social ties would be pretty much destroyed. The mainstream borrows more and more from behavioral economics, behavioral game theory, etc. Samuel Bowles, for one, does a good job of effectively combing the ideas of the mainstream with alternative ideas about agency. Of course, Mankiw does not care. I could go on, but I think this is enough.

Adbusters Magazine called "one of the most effective and talented propagandists of our times". That might be an exaggeration, but beware and hope that your instructor will add at least some nuance to Mankiw's exposition of economics. I was quite fortunate since my instructor, while thoroughly neoclassical, at least made sure to spell out the assumptions and point out which ones were more arbitrary than others (e.g. constant marginal utility of money in welfare economics) and when exactly economists are being sneaky (e.g. gains from free trade, even if all assumptions hold, are only a potential Pareto improvement). Some others may not be so lucky.

Editorial Review:

Mankiw's Principles of Economics textbooks continue to be the most popular and widely used text in the economics classroom. PRINCIPLES OF MICROECONOMICS, 4th Edition features a strong revision of content in all 22 chapters while maintaining the clear and accessible writing style that is the hallmark of the highly respected author. The 4th edition also features an expanded instructor's resource package designed to assist instructors in course planning and classroom presentation and full integration of content with Aplia, the leading online Economics education program. In the 4th edition Greg Mankiw has created a full educational program for students and instructors -- Experience Mankiw 4th edition. "I have tried to put myself in the position of someone seeing economics for the first time. My goal is to emphasize the material that students should and do find interesting about the study of the economy." - N. Gregory Mankiw.

The Great Depression of Debt: Survival Techniques for Every Investor

Warren Brussee

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Customer Reviews:
Total reviews: 28 Average rating: 3.5 of 5

WHAT A COP OUT! 1 out of 5 stars.
2 of 15 people found this review helpful.

What a cop out! Now that his 2007-2020 Second Great Depression has failed to materialize with 2008 2/3rds over, it is being repackaged as a newly titled "debt" book. A warm welcome Warren to the rather full club of authors who predicted disaster on a timeframe that didn't happen. You failed simply because you ignored the greatest force in the economy - the consumer. Every economist knows that the GDP is made up 90%+ by consumer spending - 60-70% directly plus government spending of the 28% of income they take in taxes. In other words GDP is ALWAYS driven by demographics over the longterm. There IS a monstrous crisis coming based on demographics however - go read Arnold's The Great Bust Ahead (published 2002), in which all his predictions have come to pass so far and the "big one" left is yet to come on his 2010-2012 schedule.

Editorial Review:

This book takes a close look at today's economy and offers a bleak prediction for its future. However, those positioned to handle dramatic shifts in consumer spending, the mortgage industry, and the stock market are at a great advantage.

Author Warren Brussee offers insight into the coming economic situation and provides steps to prepare for it. For example, he recommends that savings be in Treasury Inflation Protected Securities until the stock market drops 73% from its 2004 level. Methods of determining when the stock market is again a good buy are defined, and different investment options are evaluated. Even during a depression, people will need to save for their future, and Brussee provides detailed charts that show retirement savings requirements.

Managerial Economics & Business Strategy

Michael R. Baye

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Total reviews: 9 Average rating: 5.0 of 5

Great Service!! 5 out of 5 stars.
1 of 5 people found this review helpful.

I ordered the book and requested to receive it on the next day. I recieved it the next day!! It doesn't get any better than that!! Thanks Amazon!

Editorial Review:

Baye's "Managerial Economics and Business Strategy" has become the best-selling managerial economics textbook. It was the first textbook to blend tools from intermediate microeconomics, game theory, and industrial organization for a managerial economics text. Baye is known for its balanced coverage of traditional and modern topics, and the fifth edition continues to offer the diverse managerial economics marketplace a flexible and up-to-date textbook. Baye offers coverage of both the basic concepts of managerial economics as well as frontier research in his chapter on advanced topics. The fifth edition also offers a detailed, real-world case study that explains how book theory translates into action in the business world. And the Data CD that comes with each book also contains eight "mini cases" that cover such high-profile businesses as Microsoft, Visa, and Staples.

The Great Transformation: The Political and Economic Origins of Our Time

Karl Polanyi

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Total reviews: 16 Average rating: 4.5 of 5

The satanic mill 2 out of 5 stars.
4 of 15 people found this review helpful.

Polanyi's great transformation starts in the 19th century with the installation of a self-regulating market system ('the satanic mill') for labor, land and money and by letting the whole society be run by the system without any intervention. It provoked a wholesale destruction of the `traditional fabric of society'.

Attack on the market economy and democracy
In fact, this book is not only an attack against `laissez-faire', but also against a `regulated' market system and against, for Polanyi, the main cause of this great transformation (democracy). His book is not less than a plea for a return to the `Ancien Régime', for Polanyi the Golden Age of mankind, `the traditional unity of the Christian society', `the social fabric of the village under the supremacy of squire and parson', the society of `the benevolent gentlemen of England with their compassion from the heart', when economics where `embedded' in the whole society.

What was this Ancien Régime?
A disaster for 999 out of 1000 individuals. The poor had only one option: 'steal to be hanged' (J. Swift, D. Defoe, E.J. Burford). But for Polanyi, `under the regime of feudalism and the village community, noblesse oblige, clan solidarity, and regulation of the corn market checked famine'.
The kings owned the salt mines and sold (!) as a monopoly their salt (a necessity for survival) dearly: one block of about 5 kg was worth a whole village, population included (the ancient salt mines of Krakow are well worth a visit). For Polanyi, `it is the absence of the threat of individual starvation which makes primitive society more humane.'
Polanyi defends the guild system, feudalism and mercantilism: `Feudalism and landed conservatism were only seemingly contrary to the general interest of the community' and `neither under tribal nor under feudal nor under mercantile conditions was there a separate economic system in society'. But the guild system was an antidemocratic closed shop and mercantilism (F. Colbert) was a system for strengthening the Nation, in other words, the power of one man (`L'Etat, c'est moi').

What is the cause of this great transformation?
`The democratization of the political State which caused the separation of the economic and political sphere', `the transition to a democratic system and representative politics'.

What is Polanyi's solution?
`The passing of the market-economy can become the beginning of an era of unprecedented freedom.' What we need is planning, control, power and compulsion to ensure conformity which is needed for the survival of the group. Contradictio in terminis? Absolutely not: `the individual person should not fear that power and planning will turn against him'.

Of course, submitting the whole society to a pure self-regulating market system (e.g., the gold standard) is asking for disaster. The market system, a must for democracy, should be regulated and parts of the fabric of society should be managed by the State under a democratically elected government (R. Kuttner, J. Stiglitz). Indeed, `The economic order is merely a function of the social order'.

This book is an extraordinary reactionary and naïve defense of a `black' past.
However, the introduction by J. Stiglitz is excellent and justifies a modest outlay.

Editorial Review:

One of the twentieth century's most thorough and discerning historians, Karl Polanyi sheds "new illumination on... the social implications of a particular economic system, the market economy that grew into full stature in the nineteenth century." (R.M. MacIver)