Wednesday, December 24, 2008

Insights Both Fresh and Tested

The typical books-of-the-year list is confined, with good reason, to books that were published during that year. But the crush of recent economic news means that several older books suddenly have a new relevance. So while 2008 books still dominate my choices, you will also find a prophetic book from 2003 and a classic from the late 1950s. The idea is to create a reading list for anyone trying to make sense of the world right now.

The obvious place to start is the financial crisis, and the clearest guide to it that I’ve read is “Financial Shock” by Mark Zandi, a founder of the research firm Moody’s

I recently read the early parts of Arthur M. Schlesinger Jr.’s trilogy, “The Age of Roosevelt,” written more than a half-century ago. It is a bit triumphalist, but its age offers an advantage I hadn’t anticipated: you can draw the historical analogies for yourself. The debt-fueled business excesses of the 1920s sound especially, and chillingly, familiar.

I also asked Barry Gewen, an editor at The New York Times Book Review, if he would put together a canon of Depression books, and we have posted the list on our economics blog, At the top is “Freedom From Fear,” David Kennedy’s 1999 Pulitzer Prize winner (which, at almost 1,000 pages, is still 1,000 pages shorter than the Schlesinger trilogy).

To try to keep the current crisis from turning into a depression, the Obama administration is going to spend hundreds of billions of dollars next year, much of it on a vast infrastructure program. And it so happens that one of the better-reviewed nonfiction books of 2008 was, in large part, about infrastructure. The book is “
Traffic” by Tom Vanderbilt. The reviews focused on Mr. Vanderbilt’s entertaining tour through the anthropology of driving. But “Traffic” also has a larger message.

The next book was written more than five years ago, but it’s still the closest thing to an obituary for the Big Three car companies, as they once were. It was written by Micheline Maynard, a longtime automobile journalist who now works for The Times, and it’s called “The End of Detroit.”

“Detroit’s long reign as the dominant force in the American car industry is over,” she wrote, in the first sentence of the first chapter. She predicted that one of the Big Three could collapse within a decade. “The ultimate irony,” Ms. Maynard continues, is that Detroit “has been defeated by companies that did the job Detroit once did with unquestioned expertise: turn out vehicles that consumers wanted to buy and vehicles that captured their imaginations.” The Big Three’s ability to solve this problem, quickly, will largely determine their postbailout fate.

That's in a book published in 2003. It is, obviously, prophetic. I think that within two years there will be only 2 Detroit companies, and neither will be that strong. Chrysler and GM might well merge, but the sum of two sick companies will be one bigger sick company.

And, then, politics.

From the left, Larry M. Bartels, a Princeton political economist, explained in “Unequal Democracy” that the economy has consistently performed better under Democratic presidents than Republican ones over the last 60 years. For middle-class families, incomes have risen more than twice as fast under Democrats as under Republicans. Mr. Bartels makes a strong case that the pattern is more than coincidence. I’m not sure that cause and effect are as tightly linked as he suggests. But his critics have yet to come up with an argument as strong as his.

From the right, Ross Douthat and Reihan Salam pleaded with their fellow Republicans to come up with an economic strategy beyond tax cuts. In “Grand New Party,” Mr. Douthat and Mr. Salam lay out an alternate agenda, for overhauling taxes, lowering health care costs, improving schools and reducing the number of single-parent families.

Lower health costs, better schools, social engineering; they're rightists?

Finally, I will mention a book that I already recommended once this year — “The Race Between Education and Technology,” a history of American education by Claudia Goldin and Lawrence F. Katz.

No comments:

Post a Comment