In 2007, when the world was staring into the teeth of the biggest economic catastrophe in three generations, very few economists had any idea there was any trouble lurking on the horizon. Three years into the mess, economists now offer remedies that strike most people as frankly ridiculous. We are told that we must go deeper into debt to fix our debt crisis! And that we must spend in order to prosper. The reason their vision was so poor then, and their solutions so counterintuitive now, is that few have any idea how their science actually works. They disconnect results from the nearly universal acceptance of the theories of John Maynard Keynes, a very smart early-twentieth-century English Academic who developed some very stupid ideas about what makes economics grow. Essentially, Keynes managed to pull off one of the neatest tricks imaginable: He made something simple seem to be hopelessly complex. At the core of his view was the idea that governments could smooth out the volatility of free markets by expanding the supply of money and running large budget deficit when times were tough. The model proposed by Keynesians, whereby governments can spend without consequence in the belief that worthless money can be an effective economic lubricant, is false and dangerous.
"'How an Economy Grows and Why It Crashes' makes economics fun and accessible. Best-selling author and 2010 U.S. Senate candidate Peter D. Schiff and his brother Andrew J. Schiff, communications director of Euro Pacific Capital, convey the often intuitive ideas of economics through an engaging, fictitious story richly illustrated with amusing cartoons." The Washington Times, LLC
"Ignorance of economics is rampant. The average person believes the secret to prosperity is consumption and was often led to that fallacy by professional economists who should know better. Economic education in the universities has been as much a part of the problem as the solution, with millions of students taught Keynesian beliefs about government “stimulus” spending. We need an antidote. How an Economy Grows and Why It Crashes is Peter Schiff’s most recent effort in that regard. Bypassing the academic crowd and avoiding an eye-glazing academic approach, Schiff and his brother Andrew have tried to grab readers’ attention with an amalgam of allegorical storytelling and current events. They aim to promote real economic comprehension." Foundation for Economic Education
"This book is a simply written, illustrated allegory which details how economies grow and what can cause economic collapse. The book begins with three men who are stranded on an isolated island. The men spend all day fishing just to catch enough fish to barely survive. After a time, one of the men underconsumes and is able to use his savings to increase the number of fish that he catches. From this action, an island economy is born." Americanly Yours
"Peter Schiff of Euro Pacific Capital has written a book that teaches basic economics in a way that kids will understand and parents can enjoy. Seriously. The polarizing Schiff and his brother Andrew have updated their book How an Economy Grows and Why It Crashes for the holidays with illustrations and anecdotes that explain the basic tensions of economic policy and behaviors without completely burying the points in ham-fisted ideologically rooted didacticism." Yahoo! Finance
There might be an economist sitting near you right now. You might not spot him¾a normal person looking at an economist would not notice anything remarkable. But normal people look remarkable in the eyes of economists. What is the economist seeing? What could they tell you, if you cared to ask?
Incentives are the cornerstone of modern life. And understanding them or ferreting them out is the key to solving just about any riddle. It isn't just the boldface names inside-trading CEOs and pill-popping ballplayers and perk-abusing politicians¾who cheat. It is the waitress who pockets her tips instead of pooling them. It
On the heels of the Enron trial, there are many lessons to be learned from the barrage of fraud hammering corporate America -- including how to spot signs of future impropriety. In a gripping and intriguing read, BUSINESS FAIRY TALES uses real-world scandals to illustrate the top twenty most common methods
Arresting every fraudster and punishing him are very expensive and require a lot of unavailable human and financial resources. The damaging effects of fraud would not be reversed, nor would lost assets or reputations be restored when fraud is discovered. It is economically more feasible to prevent fraud than to detect
Watching a financial crisis feels much like watching a natural crisis; as long as you are watching from distance. Although one is made by man and the other isn’t, there is something deeply mysterious about each; it isn’t quite clear how or why, or why now. Of course, each can create
Western culture is riddled with destructive myths about money and prosperity that are severely limiting individuals' power, creativity, and financial potential. In Killing Sacred Cows, Gunderson boldly exposes ingrained fallacies and misguided traditions in the world of personal finance.
A black swan is a highly improbable event with three principal characteristics: It is unpredictable; it carries a massive impact; and, after the fact, we concoct an explanation that makes it appear less random, and more predictable, than it was. The astonishing success of Google was a black swan; so was 9/11.
2008 and 2009 will be remembered for bear markets, a global credit crunch and some of the largest investment scams ever. But these scams are nothing new; from Charles Ponzi to Bernard Madoff to Sir R. Allen Stanford, they've been repeated throughout history, and there will certainly be more to come
Doing well with money isn’t necessarily about what you know. It’s about how you behave. And behavior is hard to teach, even to really smart people.Money-investing, personal finance, and business decisions-is typically taught as a math-based field, where data and formulas tell us exactly what to do. But in the real
The global financial crisis that shook virtually every country, government, and household in the world in 2008-09 gave way to a frustrating “new normal” of low growth, rising inequality, political dysfunction, and, in some cases, social tensions, so much so that the path of the global economy is likely to end
This classic text is annotated to update Graham's timeless wisdom for today's market conditions... The greatest investment advisor of the twentieth century, Benjamin Graham, taught and inspired people worldwide. Graham's philosophy of value investing -- which shields investors from substantial error and teaches them to develop long-term strategies -- has made The Intelligent
It is important to believe that tools change everything and create the possibility of an economy. And the more we can make, the more we can consume, and the more prosperous our lives become.
The simple definition of economy is the effort to maximize the availability of limited resources to meet as many human demands as possible. Tools, capital and innovations are the key to this equation.
Full mobilization of resources through effective tools increases the economy's productivity, leading a new economic terminology to occur: Wealth, ending up with an increase in the living standards.
Wealth is always a relative term; in primitive society where little is produced, even the richest can't match the material well-being available to the poor of an industrialized economy.
The best thing about private capitalism is that it forces those who may only be motivated by personal gain to raise the living standards of others.
The imposition of a government layer in between savers and borrowers separates the cause and effect of lending, and leads to an inefficient allocation of savings.
Businesses that adhere to successful models and are run by owners with strong records of achievement tend to repay loans at higher rates. As a result, these types of business plans tend to attract willing lenders.
Loans made to individuals or enterprises that do not succeed in creating a needed innovation or expanding production capacity tend to weaken the overall economy by wasting the supply of savings.
The flow of money across borders and seemingly magical qualities of the printing press have temporary blinded many leaders and policy makers to the simple truth that "we can't consume more than we produce, or borrow more than we save" at least for very long.
In addition to distorting the credit market by passing laws that favor certain types of loans and certain types of borrowers, governments also influence the flow of credit through its control of interests rates.
A country with a trade surplus, in that it sells more abroad than it buys, will create an international demand for its currency.
Modern economics mistakenly assume that spending drives growth and that when deflation is present, people tend to defer purchases, and when they do spend, the diminished price makes less of an economic impact.
Even after the collapses of the mortgage market, people still don't understand how home prices are influenced by government policies.
Inflation is simply a means to transfer wealth from anyone who has savings in particular currency to anyone who has debt in the same currency.
There is a limit to how high taxes can go. Raise them enough, and people stop working. Raise them higher, and they may even start rioting.
Inflation allows governments to avoid hard choices and dispose of their debt of the sly. By printing money, governments can nominally pay back all that they owe, but they do so by diluting their currency.