Greg Ip

This was not the book I thought it was going to be. Per the title, I was looking forward to a study of the many ways in which industry and government safety regulations aimed at increasing safety actually turn out to heighten vulnerability. While there is a small smattering of compelling outside examples contained within which support this idea, up to three quarters of the chapters focused specifically on the financial crisis of 2007-08, and to this non-economist those chapters were almost unbearably dry. Somehow, I still managed to finish.… (més)

The subtitle includes the words ... in the Real World." Bull. Ip's mother was an economist, he lives in Bethesda (suburb of Washington DC) and he works for The Economist magazine. Rich countries do *not* need to keep growing - our standard of living is high enough to drain the resources of the entire world. An inflation rate of 3% is *not* good - unless you're rich enough to invest in something paying more than that, which "Real" people are no). And if you cut the so-called 'entitlements' like Social Security you will be incurring much higher costs as those seniors & people with disabilities lose their independence and have to move into residential care homes.

I'm not an economist, but I've been an auto-didact for years & years. Some of what Ip presented was definitely 'for dummies' and some I could not understand. I would definitely hope you and I both can find a better guide to macro-economics, one that actually deserves the subtitle."… (més)

This isn't the type of book that I would normally read however, it was selected for my Book Club and the title did catch my interest. That said, the first few chapters made me feel that I was back in Economics class in college and that wasn't pretty. However, as I got into the book I found that the areas that were discussed were extremely thought-provoking..

The first several chapters dealt with risk involved with money - stocks, bonds, Federal Reserve and how it tries to control inflation and making our assets safer.

Quoting the book I found this part about political interference regarding the changes in bank loan requirements which eventually caused some of the sub-prime mortgage fiasco very enlightening and expect that many Democrats will disagree with what was said.
"Brad DeLong, an economist at the Univ of Calif at Berkeley, who had served in Clinton's Treasury from 1993 to 1995, described many years later why he and his fellow Democrats pushed deregulation (for home loans): "It had been more than 60 years since financial disruption had had more than a minor impact on overall levels of production and employment....The poorer 2/3 of America's population appeared to be shut out of the opportunities to borrow at reasonable interest rates,...Depression-era restrictions on risk seemed less urgent, given the US Federal Reserve's proven ability to build firewalls between financial distress and aggregate demand. New ways to borrow and to spread risk seemed to have little downside....it seemed worth trying. It wasn't."

Financial issues were also low-balled concerning the threat of baby boomers approaching retirement without sufficient savings.

Other areas of interest that were highlighted included:

Football and hockey helmets and how they have changed the amount of risk that players accept,
anti-lock brakes and seat belts and how they should have made driving safer but may have only increased the risk level that a driver will take,
(I found it amusing that New Hampshire is the only state that does not require seat belt usage - their Motto -Live Free or Die.)
FDA new drug approval - is faster with higher risk from possibly dangerous drugs better than slower and less risk that bad drugs will reach the market?

Natural disasters and their increasing costs - Hurricane Katrina and Superstorm Sandy impacted millions of people and climate change was touted as partially to blame but what about the decision of a growing population to settle and build in areas that are not really conducive to settlement? If an area is repeatedly wiped out by hurricanes and other power natural occurring events, should the government continue to provide subsidies to rebuild?

I kept reading wondering if I had a choice how much of a risk was I willing to take?
Would I build my home in a floodplain or near a forest or on a cliff subject to mudslides? If my home had been destroyed, would I rebuild in the same place?

It appears that as we increase the safety in our society were are counterbalancing by increasing the risk as well. Is this a good thing?

I won't say this was a great book, at times it was hard to keep going, but it did give me lots to think about.… (més)