Economic Uncertainty

Given the present challenges of the fluctuating US economy, these books explore key economic terms, past financial hardships, and possible solutions.

Posted on January 26, 2023 in Hot Topic

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The American middle class: an economic encyclopedia of progress and poverty, ed. by Robert S. Rycroft. Greenwood, 2017. 2v bibl index ISBN 9781610697576, $198.00; ISBN 9781610697583 ebook, contact publisher for price.
Reviewed in CHOICE October 2017

Up to 90 percent of Americans self-identify as belonging to the “middle class,” but neither scholars nor the general public agree on a precise definition of the term, indicated by combinations of many complex factors including income, education, and social status. Predicated on the idea that entering (and staying in) the middle class is the so-called American Dream, this two-volume set by editor Rycroft (Univ. of Mary Washington) explores the economic and social conditions—as well as the associated anxieties—of the US middle class, broadly defined. A lengthy prologue includes five contributors’ signed essays that frame these issues, explore the various intersections of income, occupation, class identity, and race with the middle-class experience, and provide background on the origins of the middle class and thoughts about its potentially precarious future. The prologue also includes several detailed demographic portraits of sectors of the middle class, including American Indian, Hispanic, and LBGT. The remainder of the encyclopedia is organized into seven parts tackling themes of economic uncertainty; politics and public policy; education, housing, and labor; health; crime; ideologies and norms; and culture and media. Each part includes an overview essay, useful for understanding these major themes as they relate to the middle class and that could likely stand alone as thought-provoking course reading, along with several cross-referenced entries and suggestions for additional sources. Well written, thoughtfully organized, and timely, this set would be a good addition to most reference collections. It would be especially useful for community college libraries and those supporting a large proportion of first-generation college students, as the topics covered will be particularly relevant. Summing Up: Highly recommended. All libraries. All levels. —S. E. Fancher, Ozarks Technical Community College

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Chernomas, Robert. Economics in the twenty-first century: a critical perspective, by Robert Chernomas and Ian Hudson. Toronto, 2016. 199p index afp ISBN 9781442649422, $60.00; ISBN 9781442626775 pbk, $24.95; ISBN 9781442620179 ebook, contact publisher for price.
Reviewed in CHOICE November 2016

Economists largely failed to foresee the 2008–09 financial crisis and have faced criticism for being detached from economic realities. This book systematically analyzes work conducted by recent winners of the John Bates Clark (JBC) medal to delve into the present and future state of economics and assess this criticism. The JBC medal, sometimes called the “Baby Nobel,” is given to the economist under the age of 40 deemed to have made “the most significant contribution to economic thought and knowledge.” As the title suggests, the authors’ perspective is critical. Their thematic discussion of the JBC winners’ work highlights how economists positioned squarely on the cutting edge of their discipline largely adhere to “old mainstream” assumptions: analysis based on individual, rational self-interest conducted through formal modeling and statistical testing. A recurring criticism is the failure to account for broader, structural forces and power disparities that can alter the backdrop against which economics unfolds. Equally problematic are tendencies among JBC winners to ignore entire lines of inquiry, such as determinants of economic crisis or environmental degradation. The result is a powerful critique of the discipline and an excellent introduction to contemporary economics. Summing Up: Highly recommended. Lower-division undergraduates through faculty. —R. W. Glover, University of Maine

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The Economic crisis in retrospect: explanations by great economists, ed. by G. Page West and Robert M. Whaples. E. Elgar, 2013. 193p ISBN 9781782545323, $110.00.
Reviewed in CHOICE March 2014

Providing insights into the foundational causes of the recent recession that began in 2008, this volume draws on the perspectives of great economists: Walter Bagehot, Thorstein Veblen, John Maynard Keynes, Joseph Schumpeter, and Friedrich von Hayek. Key highlights include discussion of the dynamism of capitalism–the kingpin of economic growth–which is fostered by the existence of uncertainties, imperfect information, the role of diverse ex-ante expectations among actors, and the prevalence of inter-temporal choices. It is argued that government involvement in the economy militates against the playing out of these factors, perpetuating business and financial crises. A useful insight emerging from the great economists reviewed is that uncertainty is a commonplace phenomenon in any economy. One must, therefore, remain humble in any attempts to predict what happens next in the economy. This work would have been enhanced with a deeper examination of the degree to which the qualities of individual as well as combined human factors impact economic performance at all times. This readable, well-written volume is an excellent resource for both undergraduate and graduate students interested in the history of economic ideas and the history of economic thought. Policy makers and politicians would also benefit tremendously from reading this work. Summing Up: Highly recommended. All collections and readership levels. —S. Adjibolosoo, Fermanian School of Business, Point Loma Nazarene University

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Financial Crisis Inquiry Commission. The financial crisis inquiry report: final report of the National Commission on the Causes of the Financial and Economic Crisis in the United States. Authorized ed. PublicAffairs, 2011. 545p ISBN 1610390415 pbk, ; ISBN 9781610390415 pbk, $14.99.
Reviewed in CHOICE August 2011

Anyone interested in studying the causes of the financial crisis that reached a critical mass in 2008 must read this report. The financial crisis is complicated, which is why the Financial Crisis Inquiry Commission was created and why its report is long and dense. The commission uses hundreds of interviews and thousands of reports, and it held public hearings to investigate the historical and contemporary causes of the crisis. It is a Herculean research effort that deserves recognition. It provides clear conclusions: the crisis was avoidable; a series of financial deregulations weakened the system; government and credit agencies were blinded to the impending economic doom. While the report does not contain much new information, its greatest strength is its evidence-based approach that sits on a solid foundation. Four committee members did not approve the final report. Three dissenters collaborated on one report, and Peter J. Wallison dissented from their report as well. They largely dismiss the report’s main conclusions and provide their own less substantiated ones. While the commission was asked not to provide policy solutions, it is hard not to wonder what value this report will have in Washington. Summing Up: Highly recommended. Upper-division undergraduates and above. —R. H. Scott, Monmouth University

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Foster, John Bellamy. The great financial crisis: causes and consequences, by John Bellamy Foster and Fred Magdoff. ISBN 9781583671849 pbk, $12.95.
Reviewed in CHOICE August 2009

Foster and Magdoff’s analysis of the current economic crisis is both original and quite convincing. Their conclusion runs against the superficial view that a few rogue traders or poor Federal Reserve policies caused the crisis. Foster (sociology, Univ. of Oregon) and Magdoff (director, Monthly Review Foundation) move easily between economic theory, government statistics, and the business press. At the same time, their analysis successfully weaves together seemingly disconnected forces, such as rising inequality, deindustrialization, deregulation, and financialization, which set the stage for the ongoing crisis. At the same time, they lay out the policy failures responsible for these problems. While they explain the role of such contributing factors, they take pains to point out that a deeper level of analysis is required. Although policy failures made such matters worse, the authors put the bulk of the blame for the crisis on forces that are inherent in market economies. Foster and Magdoff deserve a great deal of credit for this book. Despite the diversity of sources and different levels of analysis, they still manage to shape a coherent explanation that challenges the conventional accounts of the crisis. This extremely accessible book is available at an inexpensive price. Summing Up: Highly recommended. All readership levels. —M. Perelman, California State University, Chico

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Frank, Ellen. The raw deal: how myths and misinformation about deficits, inflation, and wealth impoverish America. Beacon Press, 2005 (c2004). 241p ISBN 0807047279 pbk, $16.00.
Reviewed in CHOICE September 2005

Economist Frank (Rhode Island College) has a remarkable gift for explaining economics clearly for the general reader. She avoids shrill rhetoric, maintaining a reasoned, commonsensical tone. From her avowedly liberal perspective, she forcefully debunks 23 commonly held economic misconceptions advanced by the prevailing financial orthodoxy, which insists that ordinary people stay the course while they fall further behind. All but one of these discussions runs less than ten pages. Taken separately, each offers a brisk overview of important economic debates in an unusually readable format. For example, Frank’s seven-page analysis of the Social Security Trust Fund is as clear a treatment as one can find. Read as a whole, Frank’s short studies call for a serious reinterpretation of current economic conditions. She concludes with a call for a fairer, more inclusive economic program–one less focused on the accumulation of financial wealth for a small segment of the economy. This volume makes an excellent, relatively inexpensive addition to any library that serves an undergraduate population. More advanced readers will also do well to peruse this book to learn how to communicate about economic matters. Summing Up: Highly recommended. Public and academic library collections, lower-division undergraduate and up. —M. Perelman, California State University, Chico

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Granville, Brigitte. Remembering inflation. Princeton, 2013. 272p ISBN 0691145407, $35.00; ISBN 9780691145402, $35.00.
Reviewed in CHOICE January 2014

In an era of 24/7 news cycles and constant high-volume repetition of terms such as “fiscal cliff,” “sequestration,” “tapering,” and “debt ceiling,” it is refreshing to find a more reflective, longer-range treatment of these and related topics. Economist Granville (Queen Mary Univ. of London, UK) provides that with Remembering Inflation. She offers not only recent contrasts, such as a period of high-inflation anxiety (1960s-80s) or moderation (mid 1980s to the pre-crisis years), but also economic thought and economic history experiences that go back a couple of centuries. In addition, Granville provides theoretical underpinnings, empirical results, and policy warnings. The book’s seven chapters and short conclusion cover fiscal and monetary policy (and their coordination); financial markets and financial stability; the relationship among inflation, unemployment, and economic growth; and inflation in an open-economy framework. Granville’s introduction and explanations of the roles of specific theoretical concepts such as “credibility,” “commitment,” and “expectations” in policy actions will be heartwarming and valuable for scholars and policy makers. Thirty pages of references and a detailed 26-page index complement this highly informative, well-written volume. Summing Up: Highly recommended. Upper-division undergraduate through professional readership. —A. R. Sanderson, University of Chicago

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Hoffman, Philip T. Surviving large losses: financial crises, the middle class, and the development of capital markets, by Philip T. Hoffman, Gilles Postel-Vinay, and Jean-Laurent Rosenthal. Belknap, Harvard, 2007. 263p ISBN 0674024699, $27.95; ISBN 9780674024694, $27.95.
Reviewed in CHOICE August 2007

Benjamin Franklin once said, “In this world nothing is certain but death and taxes.” He could well have added financial crises. Unfortunately, no one knows exactly when the next financial crisis will occur. The authors of this book, academics in the fields of history, social sciences, and economics, have done more than write a history of financial crises; rather, they explain the nature of these crises by putting economic theory into plain English. They take a political economy approach to the problems of financial crises and long-term financial development. Though they emphasize the importance of history, history offers no ready-made solutions to the correct response to future crises. Technological change and financial crises have shaped the evolution of financial institutions. Understanding how these changes occur can be useful to the average investor. The authors conclude that though financial crises are inevitable, institutional adjustment can help ameliorate the impact of the crises. They identify information access, the role of government debt, and the size of the middle class as crucial in the response to financial crises. Additionally, the authors suggest that microcredit institutions, as exemplified by the Grameen Bank in Bangladesh, offer promise for long-term financial development. Summing Up: Highly recommended. Public and academic library collections. —R. J. Phillips, Colorado State University

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Osbourne, David. The price of government: getting the results we need in an age of permanent fiscal crisis, by David Osbourne and Peter Hutchinson. Basic Books, 2004. 370p ISBN 0465053637, $25.00.
Reviewed in CHOICE February 2005

Osborne (adviser to government officials, and writer, including Reinventing Government, coauthored with Ted Gaebler, 1992) and Hutchinson (financial management consultant to government officials) provide a highly readable, insightful account of the strategies and tools governments can employ to meet citizens’ demands for services in “an age of permanent financial crisis.” They argue that traditional governmental responses to revenue shortfalls, which include “across-the-board cuts” in expenditures and tax increases, are inadequate responses to current fiscal constraints. They contend that governments must instead focus on outcomes by restructuring budgetary decisions and processes to set priorities and make spending decisions in order to meet citizens’ policy expectations at the price they find palatable for the governmental services they demand. In making their case for a budgetary system that emphasizes “results rather than activities,” the authors employ cases from selected state and local governments to detail how “outcome budgeting” works. In addition, they discuss and illustrate, through an array of examples, a series of organizational, managerial, and leadership strategies public officials can use to realize results identified as important. This work will be of value to a fairly broad audience, from general readers to those whose study or work relates to public finance or public administration. Summing Up: Highly recommended. Public, academic, and professional library collections. —G. L. Malecha, University of Portland

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Temin, Peter. The leaderless economy: why the world economic system fell apart and how to fix it, by Peter Temin and David Vines. Princeton, 2013. 315p ISBN 9780691157436, $29.95.
Reviewed in CHOICE October 2013

Temin (emer., MIT) and Vines (Univ. of Oxford, UK), well-known economists and authors of numerous books and articles on economic history, economic growth, and economic crises, offer a thoughtful exploration of the situation of the world financial system through detailed analysis and comparisons of the recent international economic crisis with circumstances during the Great Depression. Diluting the facts and strengthening an understanding of the latest crisis, the authors emphasize the role of and the need for international cooperation in stabilizing the world economy. In particular, they stress the vital need for strong international leadership to foster cooperation among countries and to maintain a stable international economy. The book is a great resource for those interested in international economics and history. A must read for upper-division undergraduate students, business leaders, and future policy makers, and a pleasure for graduate students, faculty, and general readers. Summing Up: Highly recommended. Public, academic, and professional library collections. —E. Islamaj, Vassar College

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