5.0 out of 5 stars
Economic Events and Tips for Succeeding, June 12, 2003
By A Customer
This review is from: The Passionate Economist: Finding the Power and Humanity Behind the Numbers (Hardcover)
?The lines between economics and who I am are often blurred,? writes business economist, Diane Swonk; and indeed, this is contributes to the charm, readability, and usefulness of The Passionate Economist. But let me get back to that later.
This book is of interest to business economists, and others, for at least two reasons. First, Swonk has had a successful career for almost two decades at Bank One in Chicago. Although the times were turbulent, she kept her same job and phone number through six chairmen and two mergers, she tells us. This book provides insight on how she did it and lessons for how we, in a highly competitive business world and tight job market, might do it. She advises us to ask the right questions, worry about how the world might change, and make economic analysis relevant for our firms. She describes how a successful economist operates?not just relying upon economic models, but using them in conjunction with other sources of information from clients, policy makers, and other economists. Use clients not only as customers but also as sources of industry information. Develop a deep pool of sources that can provide insights into economic policy issues and policy-making. Develop ties with the top economists in key industries and countries and draw upon their knowledge and information. Further, become an expert in the data, but use data with caution. Lay out a road map of where the economy will move next, what structural changes can be expected, and advise management so it won?t be surprised. She relates her experience forecasting the industrial Midwest economy and then the tactics she used to convince senior management of her views, ultimately influencing a change in the bank?s own strategy. She advises us to develop good rapport with the public relations person in our organizations. She also outlines her approach for getting her message across to the business press?among them, promptly return calls to press members and kick stories around with them (even if you aren?t a part of the story). All this helps in building relationships. She gives tips on how to become a good speaker?practice is essential, but the challenge is to connect with the audience; and she tells you how to do it.
Secondly, the book serves as a useful review and analysis of economic events over the past two decades and provides insightful interpretations. The book covers the 1980s, when Swonk began her professional career, to the present. Chapters 9 through 16 provide a narrative of these decades. Among the events that she discusses are the early 1990s jobless recovery, changes in credit markets, the low inflation/high growth of the 1990s, the Asian financial crisis of 1997-98, the 1998 debt crisis in Russia and other countries, and the more recent U.S. asset bubble. She weaves in Fed policy actions through much of the narrative. Swonk compares the stock market crashes of 1929 and 1987 and demonstrates how they were not alike. She illustrates the importance of timely and quality data, noting that policymakers might have acted differently in early 1990 if they had better data: ?revisions, which did not occur until two years later, revealed that the recession was already well under way in the fourth quarter of 1990.?
The book overflows with practical advice such as five old rules for the new economy and reprints of Bank One reports including ?A Road Map to the Internet? and ?A Scapegoat or an 800-Pound Gorilla? on the global economy. The book identifies two structural changes that can help us analyze the economy going forward. Type I changes that ?have a fairly fast and dramatic effect [and] tend to be more cyclical than secular in nature.? Type II changes ?are rooted in long-term shifts in the economy.? While Type I changes are the focus of much attention, Type II changes are more important and easier to analyze. She gives a ?Structural Change Watch List? in Chapter 28. A bonus is an outlook for the economy over the next five to ten years in Chapter 30.
The book is not without controversy. Some readers may take issue with her characterization of armchair analysts and of MBAs complaining about lack of jobs, or her opinions about the quality of economic research and analysis. Others might have a different take on the interpretation of economic events. But the usefulness of the book to the business economist overwhelms these minor criticisms.
The Passionate Economist is partly a professional and personal autobiography. A discussion of the personal is necessary because it provides a framework for economic interpretation, as it does for most of us. It makes economics intuitive for her rather than abstract. And through the use of many personal anecdotes, the book also makes economics intuitive for us. She draws on experiences from her childhood family car trip to Mexico to the more recent September 11, 2001 terrorists attack at the NABE annual meeting, where she served as past president. She also uses brief biographies of friends and colleagues to illustrate her points.
There is no question that Swonk has a successful and rewarding career. She generously shares how she did it and offers helpful hints how we can do it.
Help other customers find the most helpful reviews
Was this review helpful to you? Yes
No
7 of 11 people found the following review helpful:
4.0 out of 5 stars
Good But Some Blind Spots, July 10, 2004
This review is from: The Passionate Economist: Finding the Power and Humanity Behind the Numbers (Hardcover)
This is an interesting account of the career of a successful business economist. Diane Swonk puts plenty of passion into her economics, which is great. She's a good writer. Her call for more accurate economic statistics is well taken. I like her definition of economics as "the study of collective human behavior." She states one of her purposes as educating armchair economists; as a biochemist and patent attorney by profession, I certainly feel I have learned something from her.
The book's flaws are mostly in its assumptions. Ms. Swonk thrills to every tiny increase in GDP, but she never stops to ask what GDP really means. GDP by definition excludes any consideration of depletion of resources, costs of pollution, effects of population growth, or quality of life. GDP has its uses in making short-term business forecasts, but applying it more generally to say how the country's economy is going is questionable at best. More accurate measures of the U.S. economy, such as the Index of Sustainable Economic Welfare (ISEW), tend to show that the amount of true economic growth per capita since 1947 has been fairly small, and that there has been little or no real growth since 1980. It strikes me as odd, therefore, that Ms. Swonk believes so sincerely that increasing GDP is the key to improving our country's prosperity. Most people's sense of economic well-being depends greatly on whether they're better off than others, so that trying to improve people's lives by continually increasing GDP strikes me as a squirrel cage to nowhere.
Ms. Swonk states that immigration is good for the economy, which I think is very questionable. Immigration may be good for business in the short term; in the long term it is simply subsidizing other countries by letting them export their population problems here. Ms. Swonk includes a push for more deregulation. I agree that deregulation is helpful in some instances, but where significant externalities exist deregulation is likely to make our country's economic situation worse.
Ms. Swonk's discussion of her personal life seems to show the same blind spot. She details her struggles dealing with an asthmatic son, but it never crosses her mind that polluted air could be affecting him.
Help other customers find the most helpful reviews
Was this review helpful to you? Yes
No
5 of 10 people found the following review helpful:
3.0 out of 5 stars
Impassionate Economist?, November 22, 2004
This review is from: The Passionate Economist: Finding the Power and Humanity Behind the Numbers (Hardcover)
Logical Disconnect: She laments that there are fewer macroeconomists that have an overall view of the bigger picture; however, she then talks about the GDP and market economics as being the end all of economic theory. As another reviewer has pointed out, GDP does not measure many things -- e.g. education, externalities. In the US, market economics is more for smaller firms and foreign countries -- bigger corporations have more of a nanny state.
Help other customers find the most helpful reviews
Was this review helpful to you? Yes
No
