Friday, May 25, 2012

Reading for Life: The 2012 Dynamic Dozen!

by Stephen Malpezzi, Department Chair, Professor and Lorin and Marjorie Tiefenthaler Distinguished Chair in Real Estate

Sorry, I couldn’t do a Top Ten. Had to be at least a dozen. Then it turned into a baker’s
dozen. Here they are in reverse alphabetical order. (Why? So I had a reason to put our
blog as #1!)

13. Anderson, Max and Peter Escher. The MBA Oath: Setting a Higher Standard for Business Leaders. Penguin Books, 2010.
Perhaps I was inspired to choose this one because as I write, the news of the day includes Hungary’s president Pal Schmitt resigning because he apparently plagiarized large sections of his PhD dissertation; Yahoo CEO Scott Thompson has just stepped down after only four months on the job because he misrepresented his academic credentials on his resume; Wal‐Mart’s in hot water over possible violations of the Foreign Corrupt Practices Act in obtaining real estate permissions in Mexico (and an ensuing possible cover‐up); and then there’s the plethora of ethical issues connected to the Great Financial Crisis, before, during and after. Anderson and Escher are among the leaders of a movement to have MBA students adopt a sort of Hippocratic Oath for business. You might find the oath idea itself speaks to you, or not; but either way this little book, written by MBA students, frames some very timely isues, and provides a useful guide to additional reading and reflection.

12. Brooks, David. The Social Animal. Random House, 2011.
Brooks is best known as a conservative political commentator, but is also an intellectual omnivore. His increasing interest in what modern psychology can teach us about economic and life decisions parallels my own. In an apparent homage to Rousseau’s Emile, he follows the life paths of two fictional characters, Harold and Erica, to illustrate. Whether you find this particular device effective or distracting (or both?), it’s a fluid introduction. (See also Kahneman’s book, below).

11. Chinn, Menzie D. and Jeffrey A. Frieden. Lost Decades: The Making of America's Debt Crisis and the Long Recovery. WW Norton & Co Inc., 2011.
Debt?? We’re in debt??? Who knew? Well, we all know it, but why have we run up such a debt in (relative to World Wars) peacetime? Here’s a scholarly but well‐written overview of the problem, its sources (often misunderstood!) and some solutions.

10. Cowen, Tyler. The Great Stagnation: How America Ate All the Low‐Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Get Better. Amazon, 2011.
An interesting short monograph on the economy and its future. Also of interest, an early example of a book published electronically (though now after its success, it’s also available in a paper version).

9. Eichengreen, Barry J. Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System. Oxford University Press, 2011.
The U.S. has a number of strengths; one of those is that the dollar happens to be the world’s reserve currency. Will it be so indefinitely? I remember this was a hot issue during my student days in the 70s. It’s back. Eichengreen is perhaps our leading scholar of international monetary history.

8. French, K. R., M. N. Baily, et al. The Squam Lake Report: Fixing the Financial System. Princeton University Press, 2010.
Gives lie to the canard that economists can never agree on anything. Fifteen top financial scholars, of varying political and academic backgrounds, provide a remarkably sharp and concise set of recommendations for fixing our financial system.

7. Glaeser, Edward. Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier. Penguin, 2011.
A fine overview of the place of cities in the economy and society, well‐written by Harvard’s top urban economist. A few glitches – e.g. his data on densities in some developing country cities is off the mark – but I think he gets all the big stuff right. And it’s a much better read than your typical urban economics textbook.

6. Haskins, Ron and Isabel Sawhill. Creating an Opportunity Society. Washington, D.C., Brookings Institution, 2009.
Everyone knows that income inequality has been rising in the U.S., but until I read the literature surveyed and the data presented in this book, I was unaware just how much our vaunted individual economic mobility had eroded. By some meaningful measures the U.S. is now less mobile than many European countries (something that rarely makes the news). Haskins and Sawhill give a careful reading of the evidence, and some very sensible prescriptions to help the U.S. get its mobility mojo back.

5. Kahneman, Daniel. Thinking, Fast and Slow. Farrar, Straus and Giroux, 2011.
Models of rational choice are the bread and butter of economists, myself included. But not even I walk down the supermarket aisle plugging everything into my personal translog utility function. Psychologist Kahneman won a Nobel Prize for his work bringing psychology into the study of economics (“behavioral economics”). This is a very readable introduction to how the brain goes back and forth between intuitive thinking (“System 1” or “fast thinking”) and more analytic, rational thinking (“System 2,” “slow thinking”). We need both. The book Malcolm Gladwell probably meant to write when he wrote Blink.

4. Malpezzi, Stephen. A Primer on Real Estate and the Aggregate Economy: Know Your Macro Indicators. James A. Graaskamp Center for Real Estate. 2011.
OK, a little self-promotion here. But I think it’s a very handy and practical introduction to tracking the U.S. economy’s basic macro data.

3. Mann, Thomas E. and Norman J. Ornstein. It's Even Worse than It Looks: How the American Constitutional System Collided with the New Politics of Extremism. Basic Books, 2012.
You’ve figured out by now that solving our deficit problems, financial crises, and many other issues are not going so well, more because of politics than because we don’t know what to do. Mann and Ornstein have revised and extended their 2008 book The Broken Branch to document how we arrived at this point. Especially controversial because, while giving plenty of “credit” to the Democrats, they claim that the Republicans are much more responsible for the current environment; and this from Ornstein, a well‐known conservative scholar at the American Enterprise Institute. (Other recent books, including Tom Coburn’s Debt Bomb, spread the blame around more evenly). Whether in the end you share Mann and Ornstein’s views or not, you’ll learn from the detailed discussion of the details behind our political impasses. A good sifting‐and‐winnowing candidate.

2. U.S. 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, U.S. Government Printing Office, 2011.
Three reports in one – the majority report and two minority reports. Well written, lots of details, and – free! At least the pdf version.

1. Of course, the Wisconsin Real Estate Viewpoint! Read it. Know it. Live it.

For previous other recommendations from Steve's Reading for Life list, click here.

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