#106: The Outsourced Self

The Outsourced Self: Intimate Life in Market Times, 

by Arlie Russell Hochschild

(New York: Metropolitan Books, 2012)

Summary:
"From the famed author of the bestselling The Second Shift and The Time Bind, a pathbreaking look at the transformation of private life in our for-profit world.

"The family has long been a haven in a heartless world, the one place immune to market forces and economic calculations, where the personal, the private, and the emotional hold sway. Yet as Arlie Russell Hochschild shows in The Outsourced Self, that is no longer the case: everything that was once part of private life—love, friendship, child rearing—is being transformed into packaged expertise to be sold back to confused, harried Americans.

"Drawing on hundreds of interviews and original research, Hochschild follows the incursions of the market into every stage of intimate life. From dating services that train you to be the CEO of your love life to wedding planners who create a couple's "personal narrative"; from nameologists (who help you name your child) to wantologists (who help you name your goals); from commercial surrogate farms in India to hired mourners who will scatter your loved one's ashes in the ocean of your choice—Hochschild reveals a world in which the most intuitive and emotional of human acts have become work for hire.

"Sharp and clear-eyed, Hochschild is full of sympathy for overstressed, outsourcing Americans, even as she warns of the market's threat to the personal realm they are striving so hard to preserve."

Table of Contents:

1. You Have Three Seconds
2. The Legend of the Lemon Tree
3. For as Long as You Both Shall Live
4. Our Baby, Her Womb
5. My Womb, Their Baby
6. It Takes a Service Mall
7. Making Five-Year-Olds Laugh Is Harder than You Think
8. A High Score in Family Memory Creation
9. Importing Family Values
10. I Was Invisible to Myself
11. Nolan Enjoys My Father for Me
12. Anything You Pay For Is Better
13. I Would Have Done It If She'd Been My Mother
14. Endings 
15. The Wantologist

My Take:
Another Second Shift or Time Bind this ain't. I suspect Hochschild's decision to write it was born of her own conflicted, guilt-spiked feelings at seeking a paid caregiver for her elderly aunt, and I think the book might have been stronger and more compelling had it focused on those intimate activities -- child and elder care, for example -- that pretty much everyone needs, and which have increasingly been moved to the market sphere and paid for. That story's been told many times, though, so what we're left with seems less like a thoughtful exposition and discussion-starter and more a voyeuristic "Wow, look at all the crazy, unnecessary stuff the 1% (or maybe just the 0.1 or 0.01%) will pay people to do for them!" Sure, it's interesting and may seem creepy or just weird that someone who's rich enough will spend beaucoup bucks on a kid's birthday party or various aspects of the wedding-industrial complex, but it's hardly a social problem on the order of the second shift.

#55: Who's Your City?

Who's Your City? How the Creative Economy Is Making Where to Live the Most Important Decision of Your Life, 

by Richard Florida (New York: Basic Books, 2008)

 Summary:
"It’s a mantra of the age of globalization that where you live doesn’t matter: you can telecommute to your high-tech Silicon Valley job, a ski-slope in Idaho, a beach in Hawaii or a loft in Chicago; you can innovate from Shanghai or Bangalore.

"According to Richard Florida, this is wrong. Place is not only important, it’s more important than ever.

"Globalization is not flattening the world; on the contrary, the world is spiky. Place is becoming more relevant to the global economy and our individual lives. The choice of where to live, therefore, is not an arbitrary one. It is arguably the most important decision we make, as important as choosing a spouse or a career. In fact, place exerts powerful influence over the jobs and careers we have access to, the people meet and our 'mating markets' and our ability to lead happy and fulfilled lives.

"Who’s Your City? provides the first ever-rankings of cities by life-stage, rating the best places for singles, young families and empty-nesters. And it grounds its new ideas and data to provide an essential guide for the more than 40 million Americans and over 4 million Canadians who move each year. The book shows readers how to choose where to live, and what those choices mean for their lives, happiness and communities."

Table of Contents:

• 1. The Question of Where

Part I: Why Place Matters

• 2. Spiky World
• 3. Rise of the Mega-Region
• 4. The Clustering Force

Part II: The Wealth of Place

• 5. The Mobile and the Rooted
• 6. Where the Brains Are
• 7. Job-Shift
• 8. Superstar Cities

Part III: The Geography of Happiness

• 9. Shiny Happy Places
• 10. Beyond Maslow's City
• 11. Cities Have Personalities, Too

Part IV: Where We Live Now

• 12. Three Big Moves
• 13. The Young and the Restless
• 14. Married With Children
• 15. When the Kids Are Gone

• 16. Place Yourself

My Take: 
Interesting to think about. Wish I'd read this closer to when I read The World Is Flat, or perhaps in a book group that was reading both, so I could sink my teeth into Florida's and Friedman's competing ideas more deeply.

#54: Generation Debt

Generation Debt: Why Now Is A Terrible Time to Be Young 

by Anya Kamenetz

(New York: Riverhead Books/ Penguin, 2008)

Summary:
"In this thoroughly researched and rousing manifesto, Anya Kamenetz chronicles and questions the plight of the new 'youth class': 18 — to 29-year-olds who are drowning in debt and therefore seemingly unable to 'grow up.' Many older adults perceive today's youth as immature slackers, 'twixters,' or 'boomerang kids,' who simply cannot get their act together, but Kamenetz argues that this perception is a misinformed stereotype.

"Numerous economic factors have combined to create a perfect storm for the financial and personal lives of America's youth: a college degree is essential for employment yet financially crippling to many, government grants for education are at an all-time low, Social Security and Medicare are on their deathbeds, and our parents and grandparents are retiring earlier and living longer. How will we get ourselves out of this mess? By analyzing and explaining the causes of this phenomenon, Kamenetz demonstrates the urgent need for people to begin investing in our nation's youth. Generation Debt will get you thinking in new ways about American values — and America's future."

Table of Contents:

1. Why Generation Debt?
2. College on Credit
3. Low Wage Jobs
4. Temp Gigs ...
5. ... Without Benefits
6. Federal Rip-Offs: Deficits, Social Security, Medicare
7. Family Troubles: Love and Independence
8. Waking Up and Taking Charge

My Take:
As usual, I'm going to find a cop-out:  The Frugal Law Student's blog says it better than I can (especially as it's been about a month since I read it). In a nutshell, makes some interesting points but is a bit on the whiny side in places, especially when making a crisis out of problems faced chiefly by the privileged. (The whole book isn't like this, but it gets there in places and they're the ones where I found the whining particularly grating.)

#36: The Cartoon Introduction to Economics

The Cartoon Introduction to Economics, Volume Two:  Macroeconomics, by Grady Klein and Yoram Bauman (New York: Hill and Wang, 2012)


Summary:
"Need to understand today's economy? This is the book for you. The Cartoon Introduction to Economics, Volume Two: Macroeconomics is the most accessible, intelligible, and humorous introduction to unemployment, inflation, and debt you'll ever read.


"Whereas Volume One: Microeconomics dealt with the optimizing individual, Volume Two: Macroeconomics explains the factors that affect the economy of an entire country, and indeed the planet. It explores the two big concerns of macroeconomics: how economies grow and why economies collapse. It illustrates the basics of the labor market and explains what the GDP is and what it measures, as well as the influence of government, trade, and technology on the economy. Along the way, it covers the economics of global poverty, climate change, and the business cycle. In short, if any of these topics have cropped up in a news story and caused you to wish you grasped the underlying basics, buy this book."

Table of Contents:

1. Introduction
2. Unemployment
3. Money
4. Inflation
5. Gross Domestic Product (GDP)
6. The Role of Government
7. Trade and Technology
8. The Classical View of Trade
9. Complications
10. Foreign Aid
11. Foreign Currencies
12. The End of the Business Cycle?
13. The End of Poverty?
14. The End of Planet Earth?
15. The End of Youth?
16. The End

My Take:

OK, how could I pass this one up? I didn't expect to learn anything much from this, but was curious to see how the authors explained various macroeconomic concepts -- and I wasn't disappointed. As a stand-alone volume, it's probably better to read Volume One first if you don't really know much about economics, as Volume Two presumes you understand basic microeconomic concepts ... but together, they're a good refresher for someone who hasn't had econ in a while or a good intro for folks who've never had but want to understand the basics at a layperson's level.

#31: The Town That Food Saved

The Town That Food Saved: How One Community Found Vitality in Local Food, by Ben Hewitt (Emmaus, PA: Rodale, 2010)

Summary:

"For decades, the rural Vermont town of Hardwick (pop: 3,200) grappled with a challenged economy. Like so many small towns, the once-thriving regional industry had died, and the majority of the working population was forced to commute far beyond the town line to find work.

Enter the 'agripreneurs,' a group of ambitious young agricultural entrepreneurs with big ideas about how regionalized food-based enterprise can be used to create sustainable economic development and wean our nation of its unhealthy dependence on industrial food.

In The Town That Food Saved, Ben explores the contradictions inherent to producing high-end 'artisanal' food products in a working class community. To better understand how a local food system might work, he spends time not only with the agripreneurs, but also with the region’s numerous small-scale food producers, many of which have been quietly operating in the area for decades. The result is a delightfully inquisitive peek behind the curtain of the town that has been dubbed the 'Silicon Valley of local food.'"

Opening Line:

"If you come into the town of Hardwick, Vermont, from the east, you come in on Route 15, weaving through a series of curves that begin as gentle sweeps and become progressively sharper until you find yourself leaning in your seat, the view through your windshield tilted just a few degrees off its axis."

My Take:
Balanced if somewhat lightweight/ superficial look at what becoming a "local foods Mecca" can and can't do for a town -- specifically, the small and mostly blue-collar town of Hardwick, Vermont. I especially appreciated how Hewitt returned time and again to the problem of how most native Hardwickians (median income $15,000) were supposed to be able to afford $4 per gallon soy milk, $5 loaves of hand-made bread, and $20 per pound artisanal cheese. Some more possible answers to this question would have been even more appreciated, but at least the issue's on the table. An interesting companion to books like The Omnivore's Dilemma and Animal, Vegetable, Miracle, though probably not much of an introduction for someone not already familiar with the topic.

#6: The Post-American World, Release 2.0

The Post-American World, Release 2.0, by Fareed Zakaria (New York: Norton, 2011)

Summary:
"Fareed Zakaria's international bestseller The Post-American World pointed to the 'rise of the rest' -- the growth of countries like China, India, Brazil, and others -- as the great story of our time, the story that will undoubtedly shape the future of global power. Since its publication, the trends he identified have proceeded faster than anyone could have anticipated. The 2008 financial crisis turned the world upside down, stalling the United States and other advanced economies. Meanwhile, emerging markets have surged ahead, coupling their economic growth with pride, nationalism, and a determination to shape their own future.

"In this new edition, Zakaria makes sense of this rapidly changing landscape. With his customary lucidity, insight, and imagination, he draws on lessons from the two great power shifts of the past five hundred years -- the rise of the Western world and the rise of the United States -- to tell us what we can expect from the third shift, the 'rise of the rest.' The great challenge for Britain was economic decline. The challenge for America now is political decline, for as others have grown in importance, the central role of the United States -- especially in the ascendant emerging markets -- has already begun to shrink. As Zakaria eloquently argues, Washington needs to begin a serious transformation of its global strategy, moving from its traditional role of dominating hegemon to that of a more pragmatic, honest broker. It must seek to share power, create coalitions, build legitimacy, and define the global agenda -- all formidable tasks.

"None of this will be easy for the greatest power the world has ever known -- the only power that for so long has really mattered. America stands at a crossroads: In a new global era where the United States no longer dominates the worldwide economy, orchestrates geopolitics, or overwhelms cultures, can the nation continue to thrive?"

Table of Contents:

1. The Rise of the Rest
2. The Cup Runneth Over
3. A Non-Western World?
4. The Challenger
5. The Ally
6. American Power
7. American Purpose

My Take:
An enjoyable read, especially if you're interested in international relations and sick to death of all the political finger-pointing and "America in decline" frothing at the mouth we seem to hear in an election year. Not quite as detailed and substantive as Thomas Friedman's books, but not quite as dense to get through, either.

#34: The Cheapskate Next Door

The Cheapskate Next Door: The Surprising Secrets of Americans Living Happily Below Their Means, by Jeff Yeager (New York: Broadway Books, 2010).

Summary:
"He's at it again, but this time he's not alone. America's Ultimate Cheapskate is back with all-new secrets for how to live happily below your means, a la cheapskate. For The Cheapskate Next Door, Jeff Yeager hit the road to interview and survey hundreds of fellow cheapskates, getting them to divulge their secrets for living the good life on less.

"Jeff reveals the sixteen key attitudes about money -- and life -- that allow cheapskates to live happy, comfortable, debt-free lives while spending only a fraction of what most Americans spend. Their strategies will change your way of thinking about money and debunk some of life's biggest money myths: learn how to cut your food bill in half; get a college education without ever borrowing a dime; save serious money by negotiating and bartering; and -- find free stuff and free fun all around you.

"The Cheapskate Next Door also features dozens of original 'Cheap Shots' -- quick tips that could save you more than $25,000 in a single year! Cheap Shots tell you:

• how to save hundreds of dollars on kids' toys
• how you can travel the world without ever having to pay for lodging
• what single driving tip can save you $30,000 during your lifetime
• even how to save up to 40 percent on fine wines (and we're not talking about the kind that comes in a box)

"From simple money-saving tips to truly life-changing financial strategies, the cheapskates next door know that the key to financial freedom and enjoying life more is not how much you earn but how much you spend."

Table of Contents:

• Preface -The Dawning of the Age of the Cheapskate
• Introduction - Cheapskates: They're Everywhere and They're Loving Life
• Chapter 1 - The Phrenology of Frugality: 16 Idiosyncrasies of the Cheapskate Mind
• Chapter 2 - Good Habits Are Hard to Break
• Chapter 3 - Money Management, Cheapskate Style
• Chapter 4 - The Oxygen Mask Approach to Raising Kids
• Chapter 5 - Thrift: The Greenest Shade of Green
• Chapter 6 - Clean Your Plate ... and Save $1,500 a Year
• Chapter 7 - Come on and Take a FREE Ride
• Chapter 8 - We Can't Retire. We Went out to Dinner Instead.
• Chapter 9 - The Joys of Horse Trading
• Chapter 10 - Break the Mortgage Chains that Bind Thee
• Chapter 11 - Bon Appe-cheap! Come on into the Cheapskate's Kitchen
• Chapter 12 - Don't Laugh. It Gets Me There ... and It's Paid For.
• Chapter 13 - Cheapskates Come out of the Closet
• Chapter 14 - Insurance: Betting on Yourself
• Chapter 15 - Cheapskates Just Wanna Have Fun
• Chapter 16 - Back to the Future?

My Take:
I should really know better by now. Perhaps I'm just the proverbial choir to whom pro-frugality books like this are preaching, but I don't tend to get much out of them and frankly, they don't even make me feel all that superior anymore.

Let's look, then, at Yeager's much-hyped 16 idiosyncrasies. If this were a joke or a movie, and if anyone were actually reading this, I'd be spoiling the punchline, but oh well. So, the question is: Do I think the following tips/ attitudes are helpful to someone who's looking to live more frugally, even if I personally already knew them and already choose to follow them (or not)? Let's see:

1. The Joneses Can Kiss Our Assets, i.e., live in the home and have the stuff you need and which pleases you, rather than that which impresses your neighbors. Agreed, though this is a long, hard mindset to cultivate if you're not already there.
2. A Cheapskate Values Time More than Money. Yes, one should consider not just the cost of a new item but what that translates to in terms of hours worked. I don't think Yeager does this principle justice, though. As he acknowledges, Robin and Dominguez tackled this issue first in Your Money or Your Life years ago, and Amy Dacyzyn of 1990s Tightwad Gazette fame offered a surprisingly balanced treatment of the fact that even for an avowed cheapskate (nee tightwad), it's not always just about the money. Some activities that cost less but take more time might offer other benefits, such as extra family time or personal enjoyment (e.g., making homemade jam or Hallowe'en costumes), while others may offer little of either (e.g., changing your own oil, combining errands, stocking up on sale items): "If you have some financial flexibility you can choose an enjoyable task with a small financial yield. If both time and money are in short supply you might have to stick with tasks with the highest hourly yields, even if they provide little enjoyment. But there are so many ways to save money you should no have to do tasks that provide a small hourly yield, offer little enjoyment, and satisfy no other values. Because we all possess different abilities, resources, likes, and values, no two tightwads would fill out this chart the same way. There is no 'right way' to be a tightwad."
3. A Cheapskate Values Value, i.e., durability and cost-per-use rather than just sticker price, are the issue here. Agreed.
4. Shopping Isn't a Cheapskate Sport. No argument here, except that this seems to contradict an argument made in favor of item 2) above. On one hand, we're supposed to be "premeditated shoppers," because spending 2 days yard-saling to find a decent pair of used kids' boots negates the money you'd save over buying them new ... but on the other, we're not supposed to shop for fun? Yes, I get the difference between trawling the yard sales and hangin' at the mall, but still.
5. A Cheapskate Regrets Nothing, i.e., no buyer's remorse for all those items you purchased on a whim, brought home, and immediately asked yourself, "WTF?" Not sure I completely buy this one. I'd allow that on balance, people who don't make a habit of impulse buying have less regret over stuff they didn't buy than impulse buyers have over things they did ... but I'm sure I'm not the only cheapskate who's ever taken a chance on a good deal that really wasn't in the end. (I'm looking at you, Target socks.)
6. A Cheapskate Appreciates Appreciation (and Depreciation, Too): Pardon the pun, but I will buy this one. "When the cheapskates next door shop for things like furniture, homes, automobiles, and even clothing, they tend to approach it as an exercise in acquiring assets rather than buying disposable commodities. ... When cheapskates shop for things they need, they're ideally looking to buy things that will increase in value. Second best is buying something that will retain its value. ... If it's not possible to buy something that will increase or retain its value, then the last resort is to buy something that will depreciate in value the least amount and as slowly as possible."
7. A Cheapskate Differentiates Between Needs and Wants: Um, yeah. Like I said, I think there's some preaching to the choir going on here.
8. A Cheapskate Is a Premeditated Shopper: OK, here's where the book distinguishes between "premeditated shopping" and "bargain hunting" (i.e., my mother-in-law's version of retail therapy): If you go armed with a list, you're doing the former. Somewhat of an artifical distinction, but I see the point.
9. A Cheapskate Knows the Best Things in Life Aren't Things: This one's definitely a keeper. In short, we cherish and remember experiences more than we do stuff.
10. A Cheapskate Does What He Loves for a Living: Wouldn't that be nice? Sure, in an ideal world, we'd all have the option of choosing rewarding-but-not-lucrative work, but in reality ... I don't think we all do, and there's probably a significant correlation between those who have the social/ educational capital to be frugal by choice vs. just plain poor and those for whom this is a legit option,
11. A Cheapskate Has Spending Anxiety Disorder ("SAD" -- But It Really Isn't): In other words, you/ we/ they hyperventilate at the thought of wasteful, unnecessary spending. Guilty as charged.
12. A Cheapskate is Brand Blind and Advertising Averse: Seems to mostly be a restatement of 1). I do agree that brands don't and mostly shouldn't matter (see Cheap for a detailed explanation of why they don't), but I'll also go out on a limb and say that while I don't care so much about the snob appeal, I will go out of my way to buy brands with which I've had consistently good luck in the past, and avoid brands I've found to be of poor quality.
13. A Cheapskate Understands Change vs. Progress: Here's where Mr. Hazel and I often butt heads. I'm a bit of a Luddite; he's, well ... to be fair, he is an IT guy and is on the low end of the curve there as far as gadget-headedness is concerned.
    
14. A Cheapskate Abhors Debtor Dementia: Basically a frilly way of saying debt is bad and should be avoided as much as possible, though Yeager and most of the cheapskates he interviewed make an exception for mortgage debt. I'd personally add a modest amount of debt for a college education to this list, though he'd disagree.
15. Cheapskates, Know and Trust Thyself: In other words, why hire someone to do your yard work, taxes, etc. when you can just as easily do it yourself? Agreed, with the caveat that you need to be realistic about your abilities and not take on bone-headed DIY projects that endanger people's safety for the sake of saving a few bucks. Do your own basic taxes, replace a light switch, mow your lawn? Absolutely. Rewire your house or chop down a 3-story dead tree? Not so much.
16. A Cheapskate Answers to a Higher Authority: I myself am a person of faith, but don't think this is essential -- at least, not the way the book defines it. I agree that it's hard to resist the greater consumer culture when you don't have some other, deeper sense of right and meaning to fall back on, but I think that could just as easily be family or self-sufficiency or environmental stewardship as it can be the deity of one's choosing.

That's probably enough for this book -- if the above sounds intriguing, check the book out of your library or borrow a copy from a friend. If it seems stupid or obvious, don't bother.

#78: Superfreakonomics

Superfreakonomics: Global Cooling, Patriotic Prostitutes, and Why Suicide Bombers Should Buy Life Insurance, by Steve Levitt & Stephen J. Dubner (New York: William Morrow, 2009)

Summary: "The New York Times bestselling Freakonomics was a worldwide sensation, selling more than four million copies in thirty-five languages and changing the way we look at the world. Now Steven D. Levitt and Stephen J. Dubner return with Superfreakonomics, and fans and newcomers alike will find that the freakquel is even bolder, funnier, and more surprising than the first.

"Four years in the making, Superfreakonomics asks not only the tough questions, but the unexpected ones: What's more dangerous, driving drunk or walking drunk? Why is chemotherapy prescribed so often if it's ineffective? Can a sex change boost your salary?

"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 hardwired for altruism or selfishness?
• Can eating kangaroo save the planet?
• Who adds more value: a pimp or a realtor?

"Levitt and Dubner mix smart thinking and great storytelling like no one else, whether investigating a solution to global arming or explaining why the price of oral sex has fallen so drastically. By examining how people respond to incentives, they show the world for what it really is -- good, bad, ugly, and in the final analysis, superfreaky.

"Freakonomics has been imitated many times over -- but only now, with Superfreakonomics, has it met its match."

Table of Contents:

• An Explanatory Note: In which we admit to lying in our previous book
  
• Introduction: Putting the Freak in Economics: In which the global financial meltdown is entirely ignored in favor of more engaging topics
  
• Chapter 1: How Is a Street Prostitute Like a Department-Store Santa? In which we explore the various costs of being a woman
  
• Chapter 2: Why Should Suicide Bombers Buy Life Insurance? In which we discuss compelling aspects of birth and death, though primarily death
  
• Chapter 3: Unbelievable Stories About Apathy and Altruism: In which people are revealed to be less good than previously thought, but also less bad
  
• Chapter 4: The Fix Is In -- and It's Cheap and Simple: In which big, seemingly intractable problems are solved in surprising ways
  
• Chapter 5: What Do Al Gore and Mount Pinatubo Have In Common? In which we take a cool, hard look at global warming
  
• Epilogue: Monkeys Are People Too: In which it is revealed that -- aw, hell, you have to read it to believe it

My Take: Yes, I've gone from being bored with a mystery/ detective story to looking forward to being entertained by a book that's (at least tangentially) about economics. There is clearly something wrong with me.

Damn, but that was a good time! Don't take my word for it, as I'm an admitted econ geek wannabe -- but Filbert (a/k/a Mr. Hazelthyme) and Sprig (formerly Littlehazel) aren't, and the grand finale, what happens when capuchin monkeys are taught to use money chapter even had them laughing out loud!

Superfreakonomics picks up where the original Freakonomics left off, but you don't necessarily have to have read the earlier book (or even taken any econ classes) to enjoy this one.

(Much later) Life interfered, I got backlogged, and had to return the book before doing a thorough review. Sad to say, but hey -- at least you know I liked it.

#68 (take 1) - The Skeptical Economist

And then, for a late summer read of a different stripe, I started The Skeptical Economist: Revealing the Ethics Inside Economics, by Jonathan Aldred (Sterling, VA: Earthscan, 2009).

Summary: "Within the field of economics, observes Aldred (economics, U. of Cambridge, UK), there are many who peddle a narrow or simplistic view of economics to serve vested interests and political ends. In addition to this group, there is a more naive set of economists who seek to avoid ethical judgments in the practice of their discipline. Both groups practice a form of 'black box economics,' in which basic assumed principles (e.g., 'The value of life can be measured in monetary terms' and "Economic growth increases happiness') are obscured and rarely discussed. Insisting that ethics cannot be so neatly separated from economics and that these hidden principles should be matter of explicit debate, Aldred aims to uncover these hidden ethical assumptions and present them to the general reader in a manner free of mathematics and jargon. His discussion consists of stand-alone chapters examining issues of consumption, the nature of economic growth, the politics of pay, the economics of happiness, the valuation of life and nature, and issues of public services." (-Book News, Inc.)

Table of Contents:

1. Introduction: Ethical Economics?
2. The Sovereign Consumer
3. Two Myths about Economic Growth
4. The Politics of Pay
5. Happiness
6. Pricing Life and Nature
7. New Worlds of Money: Public Services and Beyond
8. Conclusion

My take: What I read was a mixed bag. Liked the first few chapters, but the "Politics of Pay" and "Happiness" ones got a bit too philosophical and dry for my tastes. Sadly, the fact that I'm trying to work 2.5 jobs at the moment meant the book had to go back before I got all the way through. Oh well.

#61 - This Land is Their Land

Yee haw! Giddyap, folks, it's time again for the semi-annual vacation roundup. #61, finished in transit on ye olde Shortline bus (long story, but see previous post on the badly damaged Matrix and draw your own conclusions), was Barbara Ehrenreich's This Land is Their Land: Reports from a Divided Nation (New York: Metropolitan Books, 2008).

Summary: "America in the "aughts" -- hilariously skewerd, brilliantly dissected, and darkly diagnosed by the bestselling social critic hailed as 'the soul mate' of Jonathan Swift. Barbara Ehrenreich's first book of satirical commentary, The Worst Years of Our Lives, about the Reagan era, was received with bestselling acclaim, The one problem was the title: couldn't some prophetic fact-checker have seen that the worst years of our lives -- far worse -- were still to come? Here they are, the 2000s, and in This Land is Their Land, Ehrenreich subjects them to the most biting and incisive satire of her career. Taking the measure of what we are left with after the cruelest decade in memory, Ehrenreich finds lurid examples all around. While members of the moneyed elite can buy congressmen, many in the working class can barely buy lunch. While a wealthy minority obsessively consumes cosmetic surgery, the poor often go without health care for their children. And while the corporate C-suites are now nests of criminality, the less fortunate are fed a diet of morality, marriage, and abstinence. Ehrenreich's antidotes are as sardonic as they are spot-on: pet insurance for your kids; Salvation Army fashions for those who can no longer afford Wal-Mart; and boundless rage against those who have given us a nation scarred by deepening inequality, corroded by distrust, and shamed by its official cruelty. Full of with and generosity, these reports from a divided nation show once again that Ehrenreich is, as Molly Ivins said, 'good for the soul.'" (from The Times (London).

Table of Contents:

• Introduction

Chasms of Inequality

• This Land is Their Land
• Miami Vice: The Class Analysis
• Home Depot's CEO-Size Tip
• Going to Extremes: CEOs vs. Slaves
• Banish the Bloated Overclass
• Got Grease?
• Class Struggle 101
• Minimum Wage Rises, Sky Does Not Fall
• Could You Afford to Be Poor?
• Desperately Seeking Stimulus
• Smashing Capitalism
• The Communist Manifesto Hits 160

Meanness on the Rise

• Pension or Penitentiary?
• Where the Finger's Pointing
• The Cheapskate Warfare State
• Are Illegal Immigrants the Problem?
• The Shame Game
• The New Cosby Kids
• What America Owes Its "Illegals"
• The Suicide Solution

Strangling the Middle Class

• Freshperson, Welcome to Debt!
• Party On
• Fastest-Growing Jobs of '06: Are You Handy with Bedpans and Brooms?
• Your Local News -- Dateline Delhi
• That Sinking Feeling
• What's So Great about Gated Communities?
• World's Designated Shoppers Drop

Hell Day at Work

• Circuit City Slaughter
• Blood in the Chutney
• Workplace Bullies
• Big (Box) Brother
• Invasion of the Cheerleaders
• Fake Your Way to the Top!
• Challenging the Workplace Dictatorship
• Gap Kids: New Frontiers in Child Abuse
• French Workers Refuse to Be "Kleenex"
• Truckers Protest, the Resistance Begins

Declining Health

• We Have Seen the Enemy -- and Surrendered
• Gouging the Poor
• The High Cost of Doing without Universal Health Care
• Health Care vs. the Profit Principle
• Children Deserve Veterinary Care Too
• Our Broken Mental Health System
• What Causes Cancer: Probably Not You
• Liposuction: The Key to Energy Independence
• A Society That Throws the Sick Away

Getting Sex Straight

• Fear of Restrooms
• Let Them Eat Wedding Cake
• Opportunities in Abstinence Training
• Opening Up to Abortion
• How Banning Gay Marriage Will Destroy the Family
• Do Women Need a Viagra?
• A Uterus Is Not a Substitute for a Conscience
• Who's Wrecking the Family?
• Bonfire of the Princesses

False Gods

• The Secret of Mass Delusion
• Who Moved My Ability to Reason?
• All Together Now
• The Faith Factor
• Follies of Faith
• Pastors Go Postal
• Is It Safe to Go Back to Church?
• God Owes Us an Apology
• Postscript: Rich Get Poorer, Poor Disappear
  

My take: An entertaining and, for those new to the subject, illuminating collection of essays on the socioeconomic disparities in contemporary America. If this wasn't already a soapbox issue of mine, and I wasn't already a fan of Ehrenreich's work, I'd probably be thrilled to hear someone write pieces like this in my local newspaper. But it is, and I am. Consequently, the book seemed a little lightweight -- not nearly up to the author's usual level of detail or journalistic ability. Still worthwhile for those who find that the issues cited resonate with them, and would like a primer of sorts to get angry about.

#44 - The Shock Doctrine

My (ahem) legions of followers will recall that often, when I like a book well enough to finish it but am less than overwhelmed, I'll say something along the lines of, "Well, it's worth a read, but I'm glad I checked it out of the library rather than shelling out for my own copy."

Well, Naomi Klein's The Shock Doctrine: The Rise of Disaster Capitalism (New York: Metropolitan Books, 2007) is different. For this one, it'd probably have been safer and cheaper if I had purchased my own copy -- not so much because I'll want to read it over and over again, but for all those times I was this close to hurling it across the room and/or plunging my favorite chef's knife through the photographic bullet hole in the cover.

Don't misunderstand me; this is a brilliant and provocative book -- but it's also by turns maddening, infuriating, and utterly depressing (which is why it took me almost 2 weeks to slog through).

Jacket summary: "The bestselling author of No Logo shows how the global 'free market' has exploited crises and shock for three decades, from Chile to Iraq. In her groundbreaking reporting over the past few years, Naomi Klein introduced the term 'disaster capitalism.' Whether covering Baghdad after the U.S. occupation, Sri Lanka in the wake of the tsunami, or New Orleans post-Katrina, she witnessed something remarkably similar. People still reeling from catastrophe were being hit again, this time with economic 'shock treatment,' losing their land and homes to rapid-fire corporate makeovers. The Shock Doctrine tells the story of the most dominant ideology of our time, Milton Friedman's free market economic revolution. In contrast to the popular myth of this movement's peaceful global victory, Klein shows how it has exploited moments of shock and extreme violence in order to implement its economic policies in so many parts of the world from Latin America and Eastern Europe to South Africa, Russia, and Iraq. At the core of disaster capitalism is the use of cataclysmic events to advance radical privatization combined with the privatization of the disaster response itself. Klein argues that by capitalizing on crises, created by nature or war, the disaster capitalism complex now exists as a booming new economy, and is the violent culmination of a radical economic project that has been incubating for fifty years."

Table of Contents:

Introduction - Blank is Beautiful: Three Decades of Erasing and Remaking the World

Part 1 - Two Doctor Shocks: Research and Development

• 1. The Torture Lab: Ewen Cameron, the CIA and the Maniacal Quest to Erase and Remake the Human Mind
• 2. The Other Doctor Shock: Milton Friedman and the Search for a Laissez-Faire Laboratory

Part 2 - The First Test: Birth Pangs

• 3. States of Shock: The Bloody Birth of the Counterrevolution
• 4. Cleaning the Slate: Terror Does Its Work
• 5. "Entirely Unrelated": How an Ideology Was Cleansed of Its Crimes

Part 3 - Surviving Democracy: Bombs Made of Laws

• 6. Saved by a War: Thatcherism and Its Useful Enemies
• 7. The New Doctor Shock: Economic Warfare Replaces Dictatorship
• 8. Crisis Works: The Packaging of Shock Therapy

Part 4 - Lost in Transition: While We Wept, While We Trembled, While We Danced

• 9. Slamming the Door on History: A Crisis in Poland, a Massacre in China
• 10. Democracy Born in Chains: South Africa's Constricted Freedom
• 11. Bonfire of a Young Democracy: Russia Chooses "The Pinochet option"
• 12. The Capitalist Id: Russia and the New Era of the Boor Market
• 13. Let It Burn: The Looting of Asia and "The Fall of a Second Berlin Wall"

Part 5 - Shocking Times: The Rise of the Disaster Capitalism Complex

• 14. Shock Therapy in the U.S.A.: The Homeland Security Bubble
• 15. A Corporatist State: Removing the Revolving Door, Putting in an Archway

Part 6 - Iraq, Full Circle: Overshock

• 16. Erasing Iraq: In Search of a "Model" for the Middle East
• 17. Ideological Blowback: A Very Capitalist Disaster
• 18. Full Circle: From Blank Slate to Scorched Earth

Part 7 - The Movable Green Zone: Buffer Zones and Blast Walls

• 19. Blanking the Beach: "The Second Tsunami"
• 20. Disaster Apartheid: A World of Green Zones and Red Zones
• 21. Losing the Peace Incentive: Israel as Warning

Conclusion - Shock Wears Off: The Rise of People's Reconstruction

My take: If I haven't made this clear yet, I thought the book was brilliant. Klein's controversial thesis is that over the last several decades, Milton Friedman and his disciples -- Chicago School, laissez faire economists -- have sought to do for many of the world's political economies what Scottish psychiatrist Ewen Cameron and the CIA tried to do for individuals' psyches in 1950s and '60s experiments: apply traumatic shocks to break them down completely, erasing all remnants of what had been there before, and then rebuild them anew with totally different structures and parameters. According to Klein, the Friedmanites (or Chicago Boys, as she often calls them) were at least as brutal as, though sometimes more subtle than, Cameron's experiments, but can't succeed forever; as she suggests in the title of her concluding chapter, eventually, shock wears off.

I had high hopes of including an extensive summary of Klein's book (I don't feel like enough of an expert on the subject to offer a good critique), but as it was already overdue, it's gone back to the library before I had the chance. Thus, I'll fall back on my old trick of citing a handful of Real reviews for those whose interest has been piqued: Joseph Stiglitz's, in The New York Times (he really liked it); Tyler Cowen's, in The New York Sun (he didn't); and John Gray's, in The Guardian (not just because he was also a fan, but because a non-U.S. perspective on politically-oriented books is always a good thing).

#34 - The Two-Income Trap

And sometimes, things just come together. I check out The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke (New York: Basic Books, 2003), which has been on my "must read" list for a while, and suddenly, co-author Elizabeth Warren is all over the place. She's a guest on one of the podcasts I listen to; she chairs the Congressional Oversight Panel for the banking bailout program; and she may even be on President Obama's short list for the Supreme Court. Who knew?

Jacket summary: "More than two decades ago, the women's movement flung open the doors of the workplace. Although this social revolution created a firestorm of controversy, no one questioned the idea that women's involvement in the workforce was certain to improve families' financial lot. Until now.In this brilliantly argued book, Harvard Law School bankruptcy expert Elizabeth Warren and business consultant Amelia Tyagi show that today's middle-class parents are suffering from an unprecedented and totally unexpected economic meltdown. Astonishingly, sending mothers to work has made families more vulnerable than ever before. Today's two-income family earns 75% more money than its single-income counterpart of a generation ago, but actually has less discretionary income once their fixed monthly bills are paid. How did this happen? Warren and Tyagi provide convincing evidence that the culprit is not 'overconsumption,' as many critics have charged. Instead, they point to the ferocious bidding war for housing and education that has quietly engulfed America's suburbs. Stay-at-home mothers once provided a financial safety net if disaster struck; their move into the workforce has left today's families chillingly at risk. The authors show why the usual remedies -- child-support enforcement, subsidized daycare, and higher salaries for women -- won't solve the problem, and propose a set of innovative solutions, from rate caps on credit cards to open-access public schools, to restore security to the middle class."

Table of Contents:

1. Just the Way She Planned
2. The Over-Consumption Myth
3. Mom: The All-Purpose Safety Net
4. The Myth of the Immoral Debtor
5. Going It Alone in a Two-Income World
6. The Cement Life Raft
7. The Financial Fire Drill

My take: No doubt about it, Warren knows her stuff. In brief, her thesis in Two-Income Trap is that the mass influx of married women with kids into the work force that began in the 1970s has actually left many women and families worse off financially. Specifically, she argues that with more women working, more families have been willing and able to spend ever-increasing amounts on homes in safe neighborhoods and good school districts -- thus leading to a bidding war that drives up the price of houses for everyone. The end result is that even though families may have higher incomes, they're spending a much larger fraction of these incomes on their homes.

More to the point, they're leveraged to the max. Whereas single-income families of yore had what Warren calls "the all-purpose safety net" -- a stay-at-home mother/wife who could go out to work if Dad lost his job or some other financial hardship struck -- the same isn't true of families in which both adults are already working, and using both incomes to make ends meet. In the latter case, families are much more likely to file bankruptcy and/or have their homes foreclosed on when times get tough.

Warren rails without hesitation at what she dubs "the myth of the immoral debtor," or the notion that bankruptcies have increased in the last generation chiefly because more and more people are running up more and more debt for luxury items, and then -- surprise, surprise -- glibly skipping off to the bankruptcy court once they inevitably can't pay the bills. On the contrary, she argues that while we're spending more on some things (i.e., technology) than we used to, we're also spending less on others (i.e., food and clothing) -- which in the end makes for a wash. She notes that about 90% of all bankruptcies and foreclosures are the result of factors beyond families' immediate control: job loss, divorce, or catastrophic medical events. The problem is compounded by an increasingly volatile labor market, even for once-safe white collar jobs, and an expanding credit industry that's transformed from offering credit as a means to sell goods and services to credit -- specifically, high-risk, high-interest-and-fees credit -- as a profit-making end in itself.

I found it fascinating to read this book and contemplate Warren's prescience knowing that it was published in 2003, at or near the effervescent peak of the housing bubble, and several years before the current recession. And the immoral debtor chapter is important food for thought; I've blogged about Affluenza and the more recent Cheap here not too long ago, and I do think there's some element of mass hyper-consumerism to blame, even if Warren would disagree. However, that's not to say this wasn't made possible by the predatory lending behaviors she describes, and I have to (pardon the pun) give her credit for both presenting this information clearly, but also offering enough detail for those of us whose interest in such things goes beyond the usual, Sunday Parade magazine sound bite level.

The one piece I'm not sure of, though, is the whole "mom as all-purpose safety net" argument. I'll agree that having an adult at home can lessen the financial impact of hardships other than job loss; for example, it's a lot easier to deal with the needs of a sick child or frail grandparent under these circumstances. But I think Warren overstates the ease with which someone who's been outside the labor force for several years can just jump right back in when Dad loses his job, and save the family from ruin. Chances are, the same conditions that caused Dad to be let go (and/or that make it tough for him to find a new job quickly) are also going to make it hard for Mom to find work. And unless Mom has a particularly rare, specialized skill set, and has managed to keep it current during her time away from work, she may not be an employer's top candidate -- especially in times of high unemployment, when they'll have plenty of resumes to choose from.

Warren does, in the final chapter, make a point I've long agreed with along these lines; I just wish she'd made it more clearly and earlier. The point is, despite what we might have told ourselves during the early 2000's housing boom, stretching yourself paper-thin to buy as much house as you can afford Just Isn't a Good Idea. The unexpected can and does happen, even in boom times: people lose their jobs, marriages break up, children or adults acquire chronic illnesses or disabilities. While I personally lean towards saving the second income, and/or investing it in non-housing assets (e.g., the college fund), rather than spending it on easy-to-curtail discretionary expenses as Warren suggests, I think we're in agreement that you're better off not fully committing 2 adults' peak earnings to a mortgage that may prove impossible to maintain if the tide turns.

Cheap

Yes, I'm back. It's not that I haven't been reading lately (though I have been reading a bit less), but I've been busy doing and, more than that, getting used to the rhythm of my new job, and, well ... blogging has sorta fallen off the radar.

Sooo, this will be a few quick posts to bring the blog up to speed with what I'm reading now. Cheap: The High Cost of Discount Culture, by Ellen Ruppel Shell (Penguin Press, 2009) was awesome. I'm frankly surprised this book hasn't gotten more publicity than it has; for me, it was akin to The Omnivore's Dilemma for the retail shopping sector. More details can be found in the New York Times review here.

#9 - The Penny Pinchers Club

Hey, I guess I shouldn't feel too bad about taking 6 months to find a new job. After all, when even the chick lit puts on a recession theme, you know times have been hard. Such is The Penny Pinchers Club, by Sarah Strohmeyer (New York: Dutton, 2009). In a nutshell, this one has its share of plot holes, but still made for an entertaining afternoon.

From the dust jacket: "Living in New Jersey -- the state that boasts the most malls per capita -- Kat's favorite recreational activity is a no-brainer: shopping. But when she discovers that her husband, Griff, has been hiding a secret bank account and exchanging dubious e-mails with his attractive young assistant, her joyful consumerism suddenly loses its appeal. Are their fights about money more serious than she understood? Is he, as her friends suggest, preparing for a divorce? Just in case, Kat decides it's time to start saving. Unfortunately, having racked up tens of thousands of dollars in debt (of course she needed those tiki torches from Pier 1!), Kat finds herself in way over her head.

"Drastic times call for drastic measures. Kat starts by canceling cable and kicking her $240 monthly Starbucks habit. But what starts out as a simple effort to cut costs soon becomes an over-the-top obsession when she joins an eclectic but lovable group of savers called the Penny Pinchers Club. Soon she is pumping her gas at dawn (when it is thicker) and serving dinner made from food she retrieved at the grocery store Dumpster. Kat is saving money, to be sure, but what she's really saving is time -- time she spends with Griff, their daughter ... and an old flame, who resurfaces at precisely the wrong moment, offering Kat a life where money is no object."

The premise is pretty entertaining, and much like Prospect Park West, has "screenplay" written all over it. The trouble starts when Kat, on the eve of their twentieth wedding anniversary, finds two wrappers from Trojan Mint Tingle condoms in husband Griff's suitcase as she's unpacking from his latest business trip ... and then an expensive restaurant receipt from a night when he'd allegedly turned in early at his hotel. Turns out, the latter was paid for with a MasterCard that (as far as Kat knows) they've never owned. With some encouragement and help from big sister Viv and Viv's accountant friend Adele, Kat does some digging, finds the aforementioned secret bank account, and consults infamous divorce lawyer Toni Feinzig -- all the while saying nothing to Griff, on the advice of her new lawyer:

"'[I]f you confront your husband now with virtually no assets to your name besides the ones you two hold mutually, you will only be hurting yourself in the long run since there is a very strong possibility that he'll call your bluff and declare immediately that he's leaving you, at which point you will be on your own."

Of course, ferocious lawyers don't come cheap, so there's the rub: Kat has 8 months (till June, when daughter Laura graduates high school and, she expects, Griff will leave her for his PYT assistant, Bree) in which to save $15,000 for Toni's retainer. Desparate situations, desparate measures, so she finally succumbs to cleaning lady Libby's invitations to join the Penny Pinchers Club. She's clearly over her head here, and on hearing about her baby steps -- switching to take-out instead of sit-down service at the sushi bar, finding gas for ten cents less a gallon, cutting out Starbucks -- the Pinchers are about to show her the door ... until she spills about Griff's infidelity. At this point, they take pity on her, and stage a massive audit and intervention: cancel cable, the landline, and Netflix; share a wireless connection with the neighbors; even trade in the Lexus -- all with the goal of saving (ulp!) $500 a week.

Kat digs in with gusto, which is one of the weaker points in the plot. Sure, her good intentions make sense, especially given the magnitude of the threat she's facing ... but as someone who's taken many trips down the frugal highway, I have a hard time believing that not just Kat, but her family, just blithely accept all these sudden, drastic changes in their lifestyle with nary a backward glance. To change any habit takes time, and rarely goes quite as smoothly as it's presented here.

Likewise, I don't fully buy Kat's decision to finally, after 20+ years, start taking steps to break free from her unreasonably demanding boss and start her own interior design business at precisely the same time she's expecting her marriage to collapse. OK, she is presented as not being terribly financially savvy, and the new business provides the vehicle for bringing ex-boyfriend Liam -- now hugely successful, and the owner of a historic estate in desparate need of remodeling -- back into the picture, but c'mon -- why now? Wouldn't you think someone in deep financial doo-doo, and expecting it to get worse, would want to hold onto a steady job just a wee bit longer?

Surprisingly, I mostly liked the ending. It didn't happen exactly as I'd expected, which is always a relief. While I did take issue with how the author resolves the question of Griff's infidelity, I can't see a better way to do it without a major rewrite -- and who knows where that might have led.

And right now, my watch is leading me to wrap it up -- I've got one of my last ladies-who-lunch dates downtown in half an hour -- so that's it for now. I'll likely hit the library on the way home, and I'm due for a major return and restock, so stay tuned.

Scroogenomics

OK, folks, welcome to Book Blog Lite. I've gotten more than a little behind in this not-so-noble endeavor, returned several of these books to the library already, and am madly trying to wrap things up before (whoohooh!) I start a new job next week. Sooo, these will be quick.

I read Scroogenomics: Why You Shouldn't Buy Presents for the Holidays, by Joel Waldfogel (Princeton: Princeton University Press, 2009) last week. Naturally, I love books like this that apply economic concepts to everyday, stuff-real-people-care-about behavior. Do I buy every last bit of Waldfogel's thesis? No. Do I think he's really a grinch who, given half the chance, would steal Christmas? Not really. Still an entertaining read, though, and a quick one to boot. Check Amazon or this review for more details, but I liked it.

#97 - The Undercover Economist

Add another one to the list of books that ended up impressing me more than I initially thought they would. My first impression of The Undercover Economist: Exposing Why the Rich Are Rich, the Poor Are Poor -- and Why You Can Never Buy a Decent Used Car! by Tim Harford (Oxford University Press, 2006) was that it was a halfway decent primer on economics for those who'd never studied it but thought they should, but didn't have much to offer someone like me who has had a few courses in the subject. I was initially expecting something along the lines of Robert Frank's The Economic Naturalist and Steven Levitt's Freakonomics -- economics-based explanations for everyday oddities we notice and wonder about, or not (why are there Braille buttons on drive-up ATMs? why is soda sold in round bottles, but orange juice in square cartons) -- and that's not what this book offers.

No, Undercover Economist sticks more closely to traditional economic subject matter -- but as the subtitle suggests, does so in a humorous and accessible manner that's got something for both the beginner and, well, at least for the intermediate student of econ. Harford uses real-world, if slightly unorthodox, examples to make key economic principles accessible to the layperson; the first chapter, for example, entitled "Who Pays for Your Coffee?," uses an example we can all relate to -- the seeming killing made by the Starbucks shops closest to the train station -- to illustrate the concepts of marginal cost, economic rents, and monopoly/ oligopoly power ... and then somehow, within 25 pages, manages to connect these same concepts to organized crime, immigration, and trade unions. Subsequent chapters offer similar romps through the concepts of price-sensitivity and elasticity, perfect competition, and externalities. And, as a long-time resident of a city where I'm the centrist one, even though I'd be considered a flaming pinko leftist almost anywhere else, I personally enjoyed the following good-natured jab at some of the more myopic environmental advocates among us:

"Why would an environmental charity organize a carbon-neutral meeting? The obvious answer is 'so that it can engage in debate without contributing to climate change.' And that is true, but misleading.

"The Undercover Economist in me was looking at things from the point of view of efficiency. If planting a tree is a good way to deal with climate change, why not forget about the meetings and plant as many as possible? (In which case, everybody should say they came by steamship.) If the awareness-raising debate is the important thing, why not forget about the trees and organize extra debates?

"In other words, why be 'carbon-neutral' when you can be 'carbon-optimal,' especially since the meeting was not benzene-neutral, lead-neutral, particulate-neutral, ozone-neutral, sulfur-neutral, congestion-neutral, noise-neutral, or accident-neutral? Instead of working out whether to improve the environment directly (by planting trees), or indirectly (by promoting discussion), the charity was spending considerable energy keeping itself precisely 'neutral' -- and not even precisely neutral on all externalities, nor even a modest range of environmental toxins, but preserving its neutrality on a single, high-profile pollutant: carbon dioxide. And it was doing so in a very public way.

"A kind view would be that the charity was setting a 'good example,' if acting nonsensically can ever be a good example. An unkind view would be that it was engaging in moral posturing."

Of particular relevance today, though the book was published three years ago, is the "The Inside Story" chapter, which addresses issues of asymmetric information and market failure in the context of health insurance. (In fairness, insurance is the classic example used to teach econ students about incomplete information and moral hazard, at least in the classes I've taken -- but given the current political context, it seems especially pertinent.)

Personally, I found the book got really interesting beginning in Chapter 6 ("Rational Insanity"), which introduces the random walk theory in the context of the 1990s dot-com stock bubble. Later chapters talk about the persistent difficulties of alleviating poverty in developing-world kleptocracies, using Cameroon as an example; the overall benefits of globalization (which you may or may not buy); and why China has had so much more success than, say, India. Some of this did remind me of something I'd observed in grad school, which is that economics is not apolitical at all (gee, who knew?), and again -- you may or may not agree with Harford's conclusions. You can't argue, though, with the fact that he gives you some interesting ideas to chew on.

#85 - Predictably Irrational

OK, most people wouldn't think a book on behavioral economics was a hoot and a half ... but I'm not most people. If you need proof, look no farther than my decision to study economics rather than HR in my master's program, so that I could come out making less money than my classmates. Yeppers, that's me.

Nonetheless, if you, too, have an odd sense of what's a good time, well ... then you, too, might enjoy Predictably Irrational: The Hidden Forces that Shape Our Decisions, by Dan Ariely (HarperCollins, 2008). And honestly, you might enjoy it even if you're not a weird economist wannabe like me. This is not a dense, put-you-to-sleep economics tome. It's a different way of looking at different social and psychological phenomena that we've probably all noticed, but never really thought about -- and it's a lot of fun to read. I don't know that I'd actually heard the phrase "behavioral economics" before I picked up this book, though I had read The Economic Naturalist and was familiar with the idea. In a nutshell, this is a field of study and a book that contrast the classic concept of homo economicus -- perfectly rational, consistently making decisions that are in our own best interests -- with the ways and reasons in which we're blatantly and even systematically irrational. Predictably irrational, if you will; hence, the title. Among the biases Ariely and his colleagues at (mostly) MIT examined are:

• We tend to make choices, whether we're shopping for a new TV, buying a house, selecting an item from a restaurant menu, or looking for a date, based on an option's looking good relative to something else. Quoting Gregg Rapp, a NYC restaurant consultant, he argues that high-priced menu items make restaurants a lot of money not because so many people tend to order the costliest thing on the menu, but because they do tend to order the next-costliest item.
• Again, all those Econ 101 lessons about prices being driven by supply and demand notwithstanding, how much we'll pay for something is very much influenced by an anchor price that's presented in conjunction with that something -- even if the anchor price clearly has nothing to do with the object. One experiment on this subject use the last 2 digits of subjects' SSNs as the anchors ... sure enough, those with higher numbers paid more for the same bottle of wine than those with lower numbers.
  
• We love free stuff. (No surprise here, especially if you've met my mother-in-law ... but I digress.) I won't spoil the details of the experiments here -- they, and the others that follow, are about as kooky and entertaining as the SSN-related prices -- but the book explains the "FREE!" phenomenon thus:

"What is it about zero cost that we find so irresistable? Why does FREE! make us so happy? After all, FREE! can lead us into trouble: things that we would never consider purchasing become incredibly appealing as soon as they are FREE! For instance, have you ever gathered up free pencils, key chains, and notepads at a conference, even though you'd have to carry them home and would only throw most of them away? Have you ever stodd in line for a very long time (too long) just to get a free cone of Ben and Jerry's ice cream? Or have you bought two of a product that you wouldn't have chose in the first place, just to get the third one for free? ... [T]here are many times when getting FREE! items can make perfect sense. ... The critical issue arises when FREE! becomes a struggle between a free item and another item -- a struggle in which the presence of FREE! leads us to make a bad decision. ... This is a case in which you gave up a better deal and settled for something that was not what you wanted, just because you were lured by FREE!

Subsequent chapters look at why being paid for doing some things reduces our intrinsic motivation to do them, how physiological arousal affects the rationality (or lack thereof) of our decision making -- and trust me, you'll love the experiments they did for this one, and the all-too-well-known phenomenon of procrastination.

I'm not sure I buy all of Ariely's conclusions as the full explanation for any of the patterns he observes, but for that matter, the book doesn't ask us to. It's fun to read and interesting to think about, and the format (each chapter tackles a different "gee, why do we do this?" quirk) makes it easy to pick up and put down, or just skim around. Definitely one I'll recommend and pass along.