Financialization over the past three decades has created a structure that lacks resilience and supports absurd volumes of trading. The finance sector devotes too little attention to the search for new investment opportunities and the stewardship of existing ones, and far too much to secondary-market dealing in existing assets. Regulation has contributed more to the problems than the solutions.Why? What is finance for? John Kay, with wide practical and academic experience in the world of finance, understands the operation of the financial sector better than most. He believes in good banks and effective asset managers, but good banks and effective asset managers are not what he sees.In a dazzling and revelatory tour of the financial world as it has emerged from the wreckage of the 2008 crisis, Kay does not flinch in his criticism: we do need some of the things that Citigroup and Goldman Sachs do, but we do not need Citigroup and Goldman to do them. And many of the things done by Citigroup and Goldman do not need to be done at all. The finance sector needs to be reminded of its primary purpose: to manage other people's money for the benefit of businesses and households. It is an aberration when the some of the finest mathematical and scientific minds are tasked with devising algorithms for the sole purpose of exploiting the weakness of other algorithms for computerized trading in securities. To travel further down that road leads to ruin.

    In it, economic expert and bestselling author of Crash Proof, Peter Schiff teams up with his brother Andrew to apply their signature "take no prisoners" logic to expose the glaring fallacies that have become so ingrained in our country’s economic conversation.Inspired by How an Economy Grows and Why It Doesn’t—a previously published book by the Schiffs’ father Irwin, a widely published economist and activist—How an Economy Grows and Why It Crashes incorporates the spirit of the original while tackling the latest economic issues.With wit and humor, the Schiffs explain the roots of economic growth, the uses of capital, the destructive nature of consumer credit, the source of inflation, the importance of trade, savings, and risk, and many other topical principles of economics.The tales told here may appear simple of the surface, but they will leave you with a powerful understanding of How an Economy Grows and Why it Crashes.

    Farrar, Straus and Giroux, 2009.

    We all sense that, but Mervyn King knows it firsthand; his ten years at the helm of the Bank of England, including at the height of the financial crisis, revealed profound truths about the mechanisms of our capitalist society. In The End of Alchemy he offers us an essential work about the history and future of money and banking, the keys to modern finance.The Industrial Revolution built the foundation of our modern capitalist age. Yet the flowering of technological innovations during that dynamic period relied on the widespread adoption of two much older ideas: the creation of paper money and the invention of banks that issued credit. We take these systems for granted today, yet at their core both ideas were revolutionary and almost magical. Common paper became as precious as gold, and risky long-term loans were transformed into safe short-term bank deposits. As King argues, this is financial alchemy—the creation of extraordinary financial powers that defy reality and common sense. Faith in these powers has led to huge benefits; the liquidity they create has fueled economic growth for two centuries now. However, they have also produced an unending string of economic disasters, from hyperinflations to banking collapses to the recent global recession and current stagnation.How do we reconcile the potent strengths of these ideas with their inherent weaknesses? King draws on his unique experience to present fresh interpretations of these economic forces and to point the way forward for the global economy. His bold solutions cut through current overstuffed and needlessly complex legislation to provide a clear path to durable prosperity and the end of overreliance on the alchemy of our financial ancestors.

    Much greater than space travel or perhaps even the next revolutionary medical breakthrough, what is at stake is the whole idea of the good life as we have known it.Immigration and inequality, globalization and technological disruption, slowing growth and accelerating climate change--these are sources of great anxiety across the world, from New Delhi and Dakar to Paris and Washington, DC. The resources to address these challenges are there--what we lack are ideas that will help us jump the wall of disagreement and distrust that divides us. If we succeed, history will remember our era with gratitude; if we fail, the potential losses are incalculable.In this revolutionary book, renowned MIT economists Abhijit V. Banerjee and Esther Duflo take on this challenge, building on cutting-edge research in economics explained with lucidity and grace. Original, provocative, and urgent, Good Economics for Hard Times makes a persuasive case for an intelligent interventionism and a society built on compassion and respect and show how economics, when done right, can help us solve the thorniest social and political problems of the day. It is an extraordinary achievement, one that shines a light to help us appreciate and understand our precariously balanced world.

    From inside the corner office at Lehman Brothers to secret meetings in South Korea, and the corridors of Washington, Too Big to Fail is the definitive story of the most powerful men and women in finance and politics grappling with success and failure, ego and greed, and, ultimately, the fate of the world’s economy. “We’ve got to get some foam down on the runway!” a sleepless Timothy Geithner, the then-president of the Federal Reserve of New York, would tell Henry M. Paulson, the Treasury secretary, about the catastrophic crash the world’s financial system would experience. Through unprecedented access to the players involved, Too Big to Fail re-creates all the drama and turmoil, revealing neverdisclosed details and elucidating how decisions made on Wall Street over the past decade sowed the seeds of the debacle. This true story is not just a look at banks that were “too big to fail,” it is a real-life thriller with a cast of bold-faced names who themselves thought they were too big to fail.

    In Phishing for Phools, Nobel Prize-winning economists George Akerlof and Robert Shiller deliver a fundamental challenge to this insight, arguing that markets harm as well as help us. As long as there is profit to be made, sellers will systematically exploit our psychological weaknesses and our ignorance through manipulation and deception. Rather than being essentially benign and always creating the greater good, markets are inherently filled with tricks and traps and will phish us as phools.Phishing for Phools therefore strikes a radically new direction in economics, based on the intuitive idea that markets both give and take away. Akerlof and Shiller bring this idea to life through dozens of stories that show how phishing affects everyone, in almost every walk of life. We spend our money up to the limit, and then worry about how to pay the next month's bills. The financial system soars, then crashes. We are attracted, more than we know, by advertising. Our political system is distorted by money. We pay too much for gym memberships, cars, houses, and credit cards. Drug companies ingeniously market pharmaceuticals that do us little good, and sometimes are downright dangerous.Phishing for Phools explores the central role of manipulation and deception in fascinating detail in each of these areas and many more. It thereby explains a paradox: why, at a time when we are better off than ever before in history, all too many of us are leading lives of quiet desperation. At the same time, the book tells stories of individuals who have stood against economic trickery--and how it can be reduced through greater knowledge, reform, and regulation.

    Congress tried, and failed, to restore the American economy and set it on a course to fiscal stability. Woodward pierces the secretive world of Washington policymaking once again, with a close-up story crafted from meeting notes, documents, working papers, and interviews with key players, including President Obama and House Speaker John Boehner. Woodward lays bare the broken relationship between President Obama and the Congress.In a new afterword, What Is Really Happening in Washington’s Economic Wars, Woodward details the further negotiations after Obama’s reelection, when he and Congress faced the fiscal cliff only to end in a perilous stalemate.

    From Kapital sprung the economic and political systems that at one time dominated half the earth and for nearly a century kept the world on the brink of war. Even today, more than one billion Chinese citizens live under a regime that proclaims fealty to Marxist ideology. Yet this important tome has been passed over by many readers frustrated by Marx’s difficult style and his preoccupation with nineteenth-century events of little relevance to today's reader.Here Serge Levitsky presents a revised version of Kapital, abridged to emphasize the political and philosophical core of Marx’s work while trimming away much that is now unimportant. Pointing out Marx’s many erroneous predictions about the development of capitalism, Levitsky's introduction nevertheless argues for Kapital's relevance as a prime example of a philosophy of economic determinism that "subordinates the problems of human freedom and human dignity to the issues of who should own the means of production and how wealth should be distributed."Here then is a fresh and highly readable version of a work whose ideas provided inspiration for communist regimes' ideological war against capitalism, a struggle that helped to shape the world today.

    Electric lighting, indoor plumbing, motor vehicles, air travel, and television transformed households and workplaces. But has that era of unprecedented growth come to an end? Weaving together a vivid narrative, historical anecdotes, and economic analysis, The Rise and Fall of American Growth challenges the view that economic growth will continue unabated, and demonstrates that the life-altering scale of innovations between 1870 and 1970 cannot be repeated. Gordon contends that the nation's productivity growth will be further held back by the headwinds of rising inequality, stagnating education, an aging population, and the rising debt of college students and the federal government, and that we must find new solutions. A critical voice in the most pressing debates of our time, The Rise and Fall of American Growth is at once a tribute to a century of radical change and a harbinger of tougher times to come.

    Since its introduction in 1978, this book has charted and followed this volatile world of financial markets. Charles Kindleberger's brilliant, panoramic history revealed how financial crises follow a nature-like rhythm: they peak and purge, swell and storm. Now this newly revised and expanded Fourth Edition probes the most recent "natural disasters" of the markets--from the difficulties in East Asia and the repercussions of the Mexican crisis to the 1992 Sterling crisis. His sharply drawn history confronts a host of key questions. Charles P. Kindleberger (Boston, MA) was the Ford Professor of Economics at MIT for thirty-three years. He is a financial historian and prolific writer who has published over twenty-four books.

    In contrast, they have advanced a policy of draconian budget cuts--austerity--to solve the financial crisis. We are told that we have all lived beyond our means and now need to tighten our belts. This view conveniently forgets where all that debt came from. Not from an orgy of government spending, but as the direct result of bailing out, recapitalizing, and adding liquidity to the broken banking system. Through these actions private debt was rechristened as government debt while those responsible for generating it walked away scot free, placing the blame on the state, and the burden on the taxpayer. That burden now takes the form of a global turn to austerity, the policy of reducing domestic wages and prices to restore competitiveness and balance the budget. The problem, according to political economist Mark Blyth, is that austerity is a very dangerous idea. First of all, it doesn't work. As the past four years and countless historical examples from the last 100 years show, while it makes sense for any one state to try and cut its way to growth, it simply cannot work when all states try it simultaneously: all we do is shrink the economy. In the worst case, austerity policies worsened the Great Depression and created the conditions for seizures of power by the forces responsible for the Second World War: the Nazis and the Japanese military establishment. As Blyth amply demonstrates, the arguments for austerity are tenuous and the evidence thin. Rather than expanding growth and opportunity, the repeated revival of this dead economic idea has almost always led to low growth along with increases in wealth and income inequality. Austerity demolishes the conventional wisdom, marshaling an army of facts to demand that we austerity for what it is, and what it costs us.

    Professor Drezner takes you behind the headlines and into the debates to dispel common myths about prosperity and get at deeper truths. By taking a broad view of economics that includes psychology, sociology, political science, and history, his lectures lead you to fundamental insights about how the modern world works and a deeper understanding of the functioning of the U.S., European, Chinese, and other major economies, as well as an appreciation for the special problems faced by underdeveloped nations. You'll examine dozens of case histories that illustrate what works and doesn't work in the drive to increase economic growth. You'll also learn about intriguing examples of prosperity won or lost, including the Dutch tulip mania in 1637, the era of globalization that started in the 1850s and lasting through World War I, and Ukraine's economic missteps after the breakup of the Soviet Union. As a start on your own road to greater prosperity, take this step to invest in an unparalleled explanation of the prerequisites to achieve it.

    William Bernstein's The Birth of Plenty. This newsworthy book sheds new light in the history of human progress. Bill Bernstein is no stranger to McGraw-Hill. He has written two successful investing books for us and both have exceeded expectations; The premise of Dr. Bernstein's book is fascinating as well as provocative. From the beginning of civilization until 1820, mankind experienced zero economic growth (0% GDP). This basically means that life for the average individual was no better in 5 A.D. than in 1555 A.D or 1555B.C. But after 1820, the world rapidly becomes a much more prosperous place for the average individual. What happened in 1820? Bernstein contends that there are four conditions necessary for sustained human economic progress: Property rights. Scientific rationalism. Capital markets. Communications and transportation technology. Holland, and by 1820 they were securely in place in the English-speaking world. It was not until much later that all four had spread over much of the rest of the globe. Global GDP since then has consistently been around 2%. And that 2% of growth has allowed most of the world to live in a much better place than our ancestors. While the historical aspect of Bernstein's story will appeal to certain history buffs. His book is also full of implications for today's society. Bernstein asserts that the absence of even one factor endangers economic progress and human welfare. He uses the beleaguered Middle East as one example - where the absence of capital markets and scientific rationalism have deterred the quality of life from improving. And Africa is sited as a dire example, where tragically in most of Africa all four factors are essentially absent.

    Friedman, the Pulitzer Prize-winning foreign affairs columnist for The New York Times, offers an engrossing look at the new international system that is transforming world affairs today. Globalization has replaced the Cold War system with the integration of capital, technology, and information across national borders—uniting Brazilian peasants, Indonesian entrepreneurs, Chinese villagers, and Silicon Valley technocrats in a single global village. You cannot understand the morning news, know where to invest your money, or think about the future unless you understand this new system, which is profoundly influencing virtually every country in the world today. Friedman tells you what this electronic global economy is all about and what it will take to live within it.With vivid stories drawn from his extensive travels, he dramatizes the conflict of “the Lexus and the olive tree”—the tension between the globalization system and the ancient forces of culture, geography, tradition, and community. He also details the powerful backlash that globalization produces among those who feel brutalized by it, and he spells out what we all need to do to keep the Lexus and the olive tree in balance. For this new paperback edition, Friedman has substantially expanded and updated his provocative analysis, making it essential reading for all who care about how the world works now.