Trying to get a handle on the economic situation of theUnited Statescan be tricky. And with each dreadful new reveal it is increasingly obvious that the global economy is now tied up in this mess, so I get the sense that I should also know what’s going on inEurope,Greece, etc.
And people ask at the library, as well. “How do I figure out what the hell’s going on?”
I personally don’t want to become a budget expert, but I do want to know what’s going on so I can participate intelligently in the discussion. I know far too many people who howl about the economy, but could not begin to explain what’s actually wrong with it, or how to fix it.
“They’re all so greedy!” said an acquaintance. He referred to Wall Street bankers.
“So how exactly did that make this mess?” I asked.
“I mean,” he said, “You’ve just got to look at the whole system. You know that it’s messed up. I mean, look at the bailout.”
“Okay,” I said. “So what would change it? What would you have done about the mortgage crisis? What would have worked better than the bailout?”
“Just get rid of all the corporations! Are you even listening to me!”
My friend knows that a lot of people are mad and he doesn’t want to miss out on his chance to get mad.
I love this person dearly and say with total conviction that he has no idea what’s going on. I don’t want that to be me. I don’t want to get into conversations I’m not ready for. So I’m doing the best I can to try and get ready, because I want to know how best to engage with these issues and not look like a total idiot if I’m ever asked to give my opinions.
Today I’m going to give you a quick list of a few books and resources I’ve used that have helped my fledgling understand grow a bit.
Sometimes I feel that it’s a failing, but I learn best when I can be entertained. So I’ve also chosen resources that I enjoy reading.
I’m not going to get into whether these books are partisan or objective. I learned something from each of them, and more usefully, they each allowed me to ask questions that had not previously occurred to me. I will, however, try to give you an idea of what each book gets criticized for.
Liar’s Poker by Michael Lewis
I’ve written about this before. It’s a brilliant, hilarious snapshot of the mindset of Wall Street in the 80s. It’s a useful primer to understand the foundation of the current house of cards.Most of the negative reviews I’ve read about this book seem to think they were about to read a book about how to invest, or something intellectually rigorous. I don’t think the book pretends to be either. Lewis also gets accused of embellishing things for the sake of the story.
Too Big To Fail: the Inside Story of how Wall Street and Washington fought to save the financial system–and themselves by Andrew Ross Sorkin
This enormous book is not going to give you an understanding of the nuts and bolts and ins and outs of the financial apparatus. You’re not suddenly going to know what derivatives and CDOs are. This is not a primer in default credit swaps.
It does provide a very good introduction to the key players involved and it reads like a thriller. It reminded me in a lot of ways of Barbarians at the Gates. I know people who hate this book and say it has the sloppiest reporting imaginable. I don’t know enough about it yet to comment on that.
Where Does the Money Go? by Scott Bittle and Jean Johnson
A fantastic overview of everything I wanted to know about “Our current economy 101.” Where came out in 2008, so it’s slightly dated, but it was the book I wish I had read first. Negative reviews of this book generally say something like “They’re not as partisan as they pretend to be.” So trust them at your peril, I suppose.
Bittle and Johnson are two of the editors of the website Public Agenda Online, which I think is a fantastic starting point for learning about complex issues, so I had no problem with the information in Where during my initial reading.
The Big Short by Michael Lewis
A worthy and way-more-dense sequel to Liar’s Poker. It is Lewis’s attempt at constructing a narrative around the absolutely byzantine structures of the derivative, CDO, mortage markets, and more. As with anything by Lewis, my favorite part of the book is that he writes about such colorful characters. This was always a welcome respite from the complex financial portions of the book.
Critics of this book have roasted Lewis for flip-flopping on derivatives not long before Big Short came out. Apparently at one point he was not concerned about them.
The Economist magazine is my current events Everest. It assumes way more knowledge than I have each week when I try to read it, but I have doggedly been reading everything about the economy in the magazine for the last few months.
I dream of the day where I can read an Economist article and not have to go double-check what anything means. It’s not much fun, but I get the feeling that if you know could speak knowledgeably about everything this publication discusses, you’d have a very good understanding of how the world works.
I have found Salman Kahn’s videos on the Paulsoun Bailout, the Geithner Plan, and Mortage-backed securities to be incredibly valuable to understanding many of the concepts I come across in lengthy books about the same subjects.
And that, budding economist and rabble rouser, is where I’ll leave it for today. If you have any others to add to the list, or you want to excoriate my choices, go nuts.
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