“We are too fat, we are too much in debt, and we save too little for the future,” says philosopher Sarah Conly on the opening page of this book. Based on this, she strongly supports the idea that government should use coercion to prevent people from harming themselves.
The Antiplanner hasn’t read and is not going to buy the book, and only partly because the list price is an outrageous $95. More important, while it might provide some insights into how nanny-state supporters think, this is one book I don’t need to read to know that it is wrong.
One of the subthemes of the Antiplanner’s latest book is that there is a growing divide between the middle class (meaning people with white-collar jobs and their families) and the working class (meaning people with blue-collar jobs and their families). Charles Murray‘s latest book, Coming Apart, explores this split in more detail. He bravely proposes a cause of that split and suggests a possible solution.
Part of this book is the next book the Antiplanner wanted to write. Murray provides a great statistical review of growing income inequality leading to frightening conclusion that the United States is turning into a two-class society, one an upper-class elite and the other lower-class drudges who lack economic security or well-being. However, Murray’s explanation of this decline, and his remedy, are both far less persuasive.
Subtitled “How Obama Is Robbing the Suburbs to Pay for the Cities,” this book sounds like it is right up the Antiplanner’s street (since my home fortunately doesn’t have an alley). Stanley Kurtz, a senior fellow with the Ethics and Public Policy Center, argues that Obama intends to forcefully implement the smart-growth agenda in his second term, taking away people’s property rights; redistributing income; and forcing people to live in mixed-income communities.
Despite having less than 200 pages of text, the book is documented with nearly 500 endnotes. I agree with many of the arguments Kurtz makes. Yet I find myself repelled by the odor of paranoia that pervades the book. While the author documents particular reports and proposals from various planners and liberal activists, he fails to show that the ideas of people like Myron Orfield or David Rusk are central to Obama’s thinking. Instead, he relies on ad hominem attacks and guilt-by-association.
Central to the book is a group called Building One America, whose web site declares itself to favor “inclusion, sustainability, and economic growth,” and brags that it was recently “at the White House.” According to Kurtz, this group’s goals are to put urban-growth boundaries around every metropolitan area; force economic integration, that is, force all neighborhoods to accept residents of all income levels; and redistribute income from high-income neighborhoods and cities to low-income ones in the same region (p. 7).
In the Antiplanner’s recent review of Margin Call, I wrote, “No bank secretly realized that mortgage-backed securities were worthless and unscrupulously sold them to unsuspecting buyers.” The authors of All the Devils Are Here would apparently disagree.
Unlike most of the books about the financial crisis that the Antiplanner reviewed last year, which each tended to focus on one slice of the crisis, All the Devils attempts to track the entire crisis, from the beginnings of the mortgage securities market in the 1980s to the crash in September 2008. It relies heavily on many of the same books the Antiplanner reviewed, including Tett’s Fool’s Gold, Cohan’s House of Cards, and more. However, the lack of footnotes makes it difficult to tell which claims are based on which sources. Although one of the co-authors claims that they interviewed lots of people, virtually all of them supposedly asked for anonymity, so little can be verified. The book doesn’t even come with a bibliography.
Margin Call opened four months ago, so this review isn’t exactly timely, but for readers who haven’t seen it, it purports to be about the 2008 financial crisis. Since the Antiplanner has written extensively about this crisis, I found the movie intriguing enough to watch the DVD.
The entire picture takes place during about 27 hours in the life of an investment bank loosely modeled after Lehman Brothers, which went bankrupt in September, 2008. While the bank in the movie is never named, it has many parallels to Lehman. Lehman’s CEO, Richard Fuld, though out of touch with his employees, was at one time worth a billion dollars based on the value of his Lehman Brothers stock. The movie CEO, cleverly named John Tuld, is similarly remote but is also said to be worth a billion. Lehman’s chief financial officer in charge of risk management was a beautiful blonde who some whispered gained her position more because of a never-proven affair with the company’s executive VP than because of her skills. The movie’s chief risk manager, played by Demi Moore, is a beautiful brunette who apparently has a close but not fully disclosed relationship with the bank’s number two person. The blonde and her boss end up losing their jobs a few months before Lehman’s goes bankrupt; here the movie breaks from reality in that only Moore loses her job.
In 1957, Nikita Khrushchev bragged that the Soviet Union would overtake the United States in production of steel and other important products within 15 years. Not to be outdone, Mao Zedong immediately decided that China’s own steel industry would overtake Britain’s–then the world’s second-leading manufacturing country (14). Thus began the Great Leap Forward, one of the tragedies of modern history.
According to one estimate, the Great Leap Forward led to as many as 55 million “excess deaths” between 1958 through 1962 (334). That’s nearly as many as died as a result of World War II, which lasted longer and involved far more nations.
Historians have blamed most of the Chinese deaths on starvation. But Frank Dikötter, a Dutch historian who is equally fluent in English and Chinese, shows in his book, Mao’s Great Famine, that the real cause was central planning. Dikötter gathered his information from provincial archives, which had been made available to the public during a period of unusual openness that preceded the Beijing Olympics.
To Walsh, A&P is a classic American success story. Founded by George Hartford as a tea shop in Manhattan in 1859, the company was grown by his children, George and John, to more than 16,000 stores that dominated the grocery trade in much of the United States. The average store was small by today’s standards, selling only 400 to 500 different products. When the first supermarkets were developed in the 1930s, the Hartfords jumped on the bandwagon and quickly replaced their shops with a smaller number of much larger stores. Like WalMart today, A&P in the 1930s through the 1950s was considered an unstoppable juggernaut.
A decade or so ago, an Economist senior editor named Frances Cairncross wrote a book called The Death of Distance which argued that, thanks to declining transportation and telecommunications costs, distance really doesn’t matter anymore. So it is ironic that another Economist writer, Ryan Avent, has written a new book arguing that “Distance is not dead” and proximity to other people still matters.
The Antiplanner previously mentioned this book, The Gated City (available only from Amazon in Kindle format for $1.99), a couple of weeks ago, but now I’ve finished reading it and can write a more detailed review.
Ryan’s book makes the following argument:
1. Denser cities are more productive
2. Due to NIMBYs, denser cities also have higher housing costs
3. Get rid of the NIMBYs, and cities will become even denser and more productive
An earlier series of Antiplanner posts looked at the recent financial crisis and the role the housing market played in that crisis. This has led the Antiplanner to look deeper into the history of housing and home ownership.
The Census Bureau began tallying homeownership rates in the 1890 census; before that, American homeownership rates can only be guessed at by the fact that the vast majority of American lived in rural areas and most–roughly two-thirds in 1890–American farmers owned their farms and, by extension, their homes. Between 1890 and 1940, census data found that about 40 to 45 percent of Americans owned their own homes. Then there was a sudden increase to 62 percent in 1960, after which it slowly crept up to 65 percent.
The Antiplanner has always assumed that the 40 to 45 percent of households that owned their homes represented middle-class (white-collar) families, and the 20 percent growth after 1940 represented working-class (blue-collar) families. But as Margaret Garb shows in City of American Dreams, reality is a bit more complicated.
Along with Michael Lewis’ The Big Short, Gregory Zuckerman’s The Greatest Trade Ever shows that at least some investors were aware that the housing bubble of the mid-2000s was likely to collapse, with severe repercussions on the economy. The book (whose alternate subtitle is “How One Man Bet Against the Markets and Made $20 Billion”) focuses on John Paulson, whose Paulson & Company was considered a minor player until he shorted so many mortgage bonds that he made the company $14 billion (plus $4 billion for himself).
Believers in the “efficient market hypothesis” argue that there will always be investors willing to bet on both sides of any market. The resulting prices, they say, represent the most accurate possible evaluations of the true value of any investment. One problem with this hypothesis, Zuckerman shows, is that some investments are asymmetrical, which leads to a bias in the markets.