Pop!: Why Bubbles Are Great For The Economy (Hardcover)

~ (Author)
Key Phrases: mental infrastructure, New York, United States, Wall Street (more...)

Editorial Reviews

From Publishers Weekly

Starred Review. Three cheers for "exuberant, foolish, mad overinvestment!" Slate columnist Gross takes a counterintuitive look at economic bubbles—those once-in-a-generation crazes that everyone knows can't last, and don't. With each one, we lament having gotten in too late, and then not having gotten out soon enough, and finally shake our heads at the inevitable bankruptcies and lost jobs and general financial wreckage. The pattern is all too familiar, which is why Gross's argument is so intriguing: that these bubbles, with their hype and madness and overenthusiasm, are not to be feared—they're actually a primary engine of "America's remarkable record of economic growth and innovation." The author surveys modern bubbles and finds the benefits far more durable than the disruptions: in each case, most investors flopped, but businesses and consumers found themselves with a "usable commercial infrastructure" that they quickly put to new uses. The telegraph "led to the creation of national and international financial markets"; extra railroad lines made national consumer brands possible and gave consumers access to distant stores; extra fiber-optic capacity gave everyone Internet access after the bust. Gross drops zingers throughout his cheery history, amusingly highlighting parallels between past and current bubbles. He concludes—with admirable practicality—by calling for a "real bubble" to jump-start alternative-energy programs. (May)
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Review

"Gross’s thesis is...thought-provoking...for modern investors, particularly given that the bubble phenomenon shows no sign of disappearing." -- Financial Times

"It’s hard to resist crossing your fingers...hoping that the next bubble bursts while you’re still around to enjoy it." -- New York Observer

"The sort of analysis that makes economics and investing so intriguingly fascinating." -- Barry Ritholtz, The Big Picture

"This is a stimulating book, worth your time and money." -- Tyler Cowen, Marginal Revolution

In his new book Pop! Why Bubbles Are Great for the Economy, business journalist Daniel Gross makes the contrarian-but-persuasive case that irrational exuberance and its aftermath have made the U.S. economy a juggernaut. -- Jeff Ostrowski, Palm Beach Post

Pop!’s good old-fashioned historical narrative is refreshingly unambiguous in its lessons for investors.

-- Barron's

Sizzle! Pow! Bam! Business history gets feisty in this attention-deficit-friendly guide to American booms and busts. Gross' angle: Bubbles are good for us, or at least they're not as bad as you might think. . . fast stats and light pace make the "dismal science" seem less dismal. -- Conde Nast Portfolio

Sizzle! Pow! Bam! Business history gets feisty in this attention-deficit-friendly guide to American booms and busts. -- Conde Nast Portfolio

The sort of analysis that makes economics and investing so intriguingly fascinating. -- Barry Ritholtz, the Big Picture

This is a stimulating book, worth your time and money. -- Tyler Cowen, Marginal Revolution

See all Editorial Reviews

Product Details

• Hardcover: 240 pages
• Publisher: HarperBusiness; 1 edition (May 8, 2007)
• Language: English
• ISBN-10: 0061151548
• ISBN-13: 978-0061151545
• Product Dimensions: 8.1 x 4.8 x 0.6 inches
• Shipping Weight: 11.2 ounces (View shipping rates and policies)
• Average Customer Review: 2.4 out of 5 stars  See all reviews (5 customer reviews)
• Amazon.com Sales Rank: #431,863 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

19 of 23 people found the following review helpful:

2.0 out of 5 stars A Short History of Financial Bubbles, June 15, 2007

By	Mr. William Y. Chan (San Francisco, CA) - See all my reviews (REAL NAME)

There's nothing really new in this book. The idea that bubbles are "naturally" recurring phenomena is a standard concept of economics known as the business cycle. The idea that bubbles lay down the expensive infrastructure investments that make the next boom/biz-cycle-upswing possible is also not new. An example of this is: Google's current success would not have been possible if tech companies had not built out our broadband infrastructure in the first dot-com bubble.

What's useful about this book is that it conveniently lays out several bubbles and how the overinvestment in each bubble contribute to economic rebirth. History may repeat in the chronicles of business cycles, but it's amazing and interesting each time. My recommendation is that you read this book if you find this angle interesting, but if you only want the main point, save your money as I've already given it away above.

I found the prose very distracting. I couldn't get more than a page before the author felt the need to write another glib metaphor comparing something to something else totally unrelated. It's as he feels a constant need to show you how clever he is. Read this book if you want to find out how annoying metaphors can be.

18 of 22 people found the following review helpful:

3.0 out of 5 stars Simple Thesis...Nicely Done, June 12, 2007

By	dennis wentraub (schenectady, new york USA) - See all my reviews (REAL NAME)

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Taking the long view, bubbles - manic bursts of investment by entrepreneurs and investors - have had a positive impact on our economy. This is the simple idea that supports POP! a quick history of American hyper-growth. The infusion of capital, uncritical enthusiasm, and grand expectations - all to excess - leave in their abrupt aftermath an infrastructure - physical, legislative, or psychological - that those who follow ("consolidators") can use to ultimately realize the goals of the early dreamers. It is another of author Daniel Gross' contentions that the uniquely American aspect of the bubble experience has to do with the role of government. Government tax credits and grants stimulate American investment without an outright attempt to control the end results and thus diminish its longer term benefits to society.

Daniel Gross looks at the development of the telegraph, the build-out of railways, the internet boom-bust, the recent real estate boom, and the now bubbling, alternative energy phenomenon. In each earllier instance a collapse resulted in havoc and pain for the initial investors that left behind infrastructure (viz. national rail system, telecommunication network, new construction) that successors used for their profit. The 1929 stock market collapse is a classic bubble representing the pursuit of easy money (viz. credit and its wily twin, leverage). The infrastructure that resulted was not physical but legislative. Laws and regulations put in place after the Crash created an investment environment that would position the U.S. financial markets as preeminent. There is not a lot that is new in POP!, and its main idea that bubbles have had a positive effect on the economy is perhaps too fragile a foundation to support a book, but the commentary is presented selectively and with journalistic wit.

4 of 4 people found the following review helpful:

2.0 out of 5 stars Misguided, to say the least., December 27, 2008

By	R. E. Jorden (Calgary) - See all my reviews (REAL NAME)

Bubbles are anything BUT naturally occurring in and of themselves. They are a natural result of unnatural tampering and manipulation by the Federal Reserve, printing obscene amounts of money to keep interest rates low, which in terms spurs an unmanageable amount of bad investment, which leads to bubbles. If you had a price to borrowing money, people would be FAR smarter about it, as the risk counters the blind greed aspect of human nature, and would not result in housing bubbles as millions of people take on mortgages they can't afford, or the NASDAQ bubble where people are investing billions into something they know nothing about or without a tangible value. Bubbles ALWAYS pop and the only people who make money on them are the golden parachute club CEOs that get out with their shirts. Everyone else loses theirs AND is left holding the bag. It all starts with the Federal Reserve, a private banking cartel that has subjugated American currency and answers to no-one. They print unknown amounts of money, thus devaluing and destabilizing US currency, resulting in instability and lack of faith in foreign markets. This leads to inflation, which devalues hard assests here at home, depletes private savings, wipes out investment and leads to higher prices of imported goods.