With the presidential election over, the economy is back in the headlines again. The stock market took another dive today and the news is talking about people cutting back on their spending and businesses cutting jobs.
This morning a story on NPR was talking to “average people” and most said they were cutting back even if they weren’t feeling the economic pinch. One young woman who said she wasn’t worried about her finances was out with her girlfriend shopping for some “bling.” She dropped $2,000 on jewelry without blinking and said she did it because she needed to “treat herself” with a little splurge. I almost choked on my morning coffee. I have never spent that much on jewelry before. My idea of a splurge on bling is earrings that cost $20.
I realize there is a difference in priorities here since I have no problem splurging on new books now and then. But even those splurges never reach such lofty heights. So I have been thinking more and more lately about economics and why those bigwig CEOs feel they need to have $30 million salaries and still need more. Or why someone who makes $250,000 a year is worried about the possibility of having to pay another $200 – $300 a year in taxes under Obama.
I will never earn that kind of salary, not working for a nonprofit or in my future library career. But I don’t need to. I live quite comfortably and happily on my current salary. Sure, a little more would be nice so I wouldn’t have to save up for things like a trip or new flooring. Still, I feel pretty lucky and well off.
There seems to be several books on the subject of how much is enough. I heard about one of them, Enough: True Measures of Money, Business, and Life by John C. Bogle, on NPR the other day. Bogle works for Vanguard, a big financial firm, and is considered the “Father of Index Investing.” He writes of the importance of ethical and moral values and how they have gotten lost. The podcast is available here
Then, of course, there is Paul Krugman who just won the Nobel Prize for economics. He has two books, The Great Unraveling: Losing Our Way in the New Century and The Conscience of a Liberal: Reclaiming America from the Right that has a focus on economics and ethics and morals as well.
And in relation to Krugman I’ve seen mentioned that his books expand on the ideas in The Affluent Society by John Kenneth Galbraith.
I am also interested in Thomas L. Friedman’s books Hot, Flat, and Crowded: Why We Need a Green Revolution – and How It Can Renew America and The World is Flat: A Brief History of the Twenty-first Century.
I feel like I should read at least one of these books, maybe more, which one/s though? Or maybe there is one I don’t know about that would be better? Anyone have a suggestion?
I’ve read at THE WORLD IS FLAT, and it is definitely worth reading. Bob read ENOUGH for one of his seminary courses and thought it was great. (Of course, do you really need something to add to that overwhelming book pile?)
Ha. I’ve never blinged with that much money (unless you count a computer, which was carefully planned for). I’ve not read any of these, but I’m with you on thinking I really should. I don’t make a lot of money, but I’m not sure what I’d do with a lot if I did have it. Books are really my only weakness (and I have plenty of needlework supplies). And I sometimes think I have too much and need to pare down as it is. However I do feel a small pinch in rising costs (bills seem to keep going up, as do groceries).
I’m a senior economics major, and The World is Flat was required reading for my Intro to Business class. It’s a fat book, but it’s a fascinating look at the rapidly increasing trend towards globalization and how we as a nation need to be preparing for it. I’d recommend it!
Oh boy, I’ll feel guilty after spending £10 a week on books. Sometimes I wonder how some people relate to money – what they think it is there for, how much value it has. There’s a really good essay on money madness in Adam Phillips’ collection Going Sane (not his best collection, but it’s a great essay). I applaud you for considering reading one of these books (none of which I know) and will follow your account with interest.
Anything by John Bogle is worth reading. He’s brilliant and his concept of low cost investing makes all the difference in the world and it’s what makes Vanguard stand out among the crowd of investment firms.
Interesting picks. I read a Friedman book many years ago (I’m pretty sure it was “The Lexus and the Olive Tree”) — it was just okay. Based on my sample of one I’d say try one of the other authors.
I always recommend “Your Money or Your Life” to anyone interested in the concept of “enough”, but it’s a hands-on guide to personal finance, not really a macro-economics book.
I never finished The World Is Flat, but not because it wasn’t good. It just got buried somewhere when I had an influx of fiction. Need to go back and finish it.
If presented in layman’s terms, I find economic (personal, national, global) very interesting. When it gets technical, I get a little lost. All of these sound good – will check in to see your choices and opinions.
Hi Stefanie
I would definitely recommend Paul Krugman. I have read a few of his books and they are always enlightening, even if I don’t always agree with his points (and I have yet to read the two you mention). I also like Galbraith – in particular, his The Good Society: The Humane Agenda is a short and insightful read.
Two additional recommendations would be Globalization And Its Discontents by Joseph Stiglitz and The Great Turning: From Empire to Earth Community by David C. Korten. In particular, Korten brings a strong ethical tone to the discussion and has a very positive outlook.
I would avoid Friedman’s The World Is Flat. It seemed to me as mere apologetics to the economic paradigms propounded by Bush and Co. (more degregulation, more outsourcing, etc.) and an shallow attempt to justify the massive income inbalances you describe. In light of the events of the past few months, it is looking increasing irrelevant.
There are a lot of important thinkers out there working on these problems… hopefully the new US administration will take a more inclusive and less ideological approach in tackling the current economic crisis.
To add to the pile, another book you might like, one with a different focus though, is Amartya Sen’s ‘Development as Freedom’
http://search.barnesandnoble.com/Development-as-Freedom/Amartya-Sen/e/9780385720274/?itm=1
Emily, I think if I never buy another book I’d be good for a very long time. But, I also like to understand things and economics is one of those things I don’t understand and feel an urge to know about. Thanks for the feedback about Friedman and Bogle!
Danielle, I’m with you, I’m not sure what I’d do with all the money if I had it either. Books are my spending weakness too. And I know what you mean about feeling the pinch!
Danielle D, thank you for your recommendation! You being an economics major and all, your feedback says a lot.
Litlove, I have definitely absorbed my dad’s financial philosophy: save, save save because you never know and don’t spend what you don’t have. So I have a hard time understanding those who spend so freely while being in debt up to their eyeballs. Thanks for the essay recommendation. My library has the book and I will be sure to borrow it when next I am there!
Sam, thanks for the recommendation. I had never even heard of Bogle until I heard about this book so it is good to know he is smart and well respected.
wil, thanks for the suggestion. Even though the book might be about personal finance, it still sounds interesting.
jenclair, thanks for letting me know about the Friedman. I totally understand a book in progress, even a good one, getting lost in the pile of other books!
steven, thank you for all your suggestions! I heard Krugman on the radio after he won the Nobel and he sounded like such a good, humble person which is heartening. Your additional suggestions sound interesting and I will look for them at the library. And perhaps I should read The World is Flat if for no other reason than to understand how the “other side” thinks. I am hoping Obama, being such a thoughtful man will take a more inclusive approach too.
Lokesh, thank you! The book sounds quite good and, I think, have a similar focus but just from a different approach, because really, isn’t enough and social responsibility also about sustainability?
The only thing I splurge on is bicycles and cycling gear, and I won’t even begin to discuss how expensive that can be. So perhaps I shouldn’t criticize anyone who spends a lot of money on jewelry. But, still, I don’t get it …. As for books on economics, I’m not sure I’ve ever read one, although the ones you mention sound interesting, particularly Enough — we do need to rethink how much we actually need, as a culture I mean.
I agree with you about this: Why would someone making more than $250,000 worry about spending a little bit more on taxes?
I would like to read Galbraith; thanks for bringing this to my notice.
On the subject of the economy, did you get to listen to Ira Glass in May, when he did this 1-hour program on the subprime crisis? It was very well done, and I was surprised to find it on This American Life. Definitely worth the time.
[Goes to look for a link]
http://www.thislife.org/radio_episode.aspx?episode=355
I would avoid Thomas Friedman at all costs.
Here is a short list of books I would recommend:
David Harvey’s A Brief History of Neoliberalism
Ellen Meiksins Wood’s Empire of Capital
Robin Hahnel’s The ABCs of Political Economy
Dorothy, I think the difference is the bike gear is useful and practical and the jewelry is superfluous, at least in our eyes
Polaris, no I missed Ira Glass in May. Thanks for the link, I will definitely give it a listen!
Richard, really? Avoid Friedman for the reason Steven gave or is there another one? Thanks for the additional recommendations. I will take a look at them.
Steven says as much as needs to be said about Friedman. Though I would say further that more than his books “seeming like” apologetics, Friedman is an apologist. That is why he is there; that is his job. He has very little idea what he’s talking about, plus he’s a spectacularly poor writer.
To clarify, Friedman was saying the same stuff during the Clinton years, which were also about deregulation and out-sourcing (which is to say he’s not merely an apologist for Bush-era policies). Stiglitz and Krugman were also apologists during the Clinton years; for example, say, the years of the dot-com bubble, though of course they have somewhat changed their tune since, and Krugman in particular was great at explaining the problems with economic policy in the Bush years. I haven’t read the Stiglitz or Krugman books, but from what I understand, they’re good, as far as they go.
Other books I’ve been meaning to read, by authors whose essays and articles have been helpful to me:
Michael Hudson’s Superimperialism
Robert Pollin’s Contours of Descent
Robert Brenner’s The Economics of Global Turbulence
Richard, thanks for the further information on Friedman. It is much appreciated! As is the bit on Stiglitz and Krugman. And thanks for the additional book recommendations. You’ve added greatly to my tbr list!
You’re welcome, Stefanie! Good luck!
And this might be gratuitous, but just today I happened upon a blog devoted entirely to Thomas Friedman. It gets into some of what I was talking about and is very funny. Here it is:
http://mustacheofunderstanding.blogspot.com/