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5.0 out of 5 stars Great book, lays out his thoughts very well
Very insightful, detailed and thorough. Some of the topics are very large in scope and this is the type of book you need to read a couple times to get all the information and points he is trying to get at.
Published 28 days ago by btaylor101

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50 of 55 people found the following review helpful
2.0 out of 5 stars Disappointing
"The Map and the Territory" is a string of loosely connected musings about the economy, economic forecasting, and the impact of the financial crisis. If you have read an economics book in the last 10 years, you will not find much new here. The jacket advertises the book as the result of "a rigorous and far-reaching multiyear examination of how Homo economicus predicts...
Published 9 months ago by Samuel J. Sharp


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50 of 55 people found the following review helpful
2.0 out of 5 stars Disappointing, October 26, 2013
This review is from: The Map and the Territory: Risk, Human Nature, and the Future of Forecasting (Hardcover)
"The Map and the Territory" is a string of loosely connected musings about the economy, economic forecasting, and the impact of the financial crisis. If you have read an economics book in the last 10 years, you will not find much new here. The jacket advertises the book as the result of "a rigorous and far-reaching multiyear examination of how Homo economicus predicts the economic future, and how it can predict it better." I am not convinced that is true. The book is simply too generalized and disjointed to be influential in any sense.

Greenspan touches on a number of topics, but there are better books on each subject. For example, his discussion of how growth in government benefits has crowded out private savings is the better handled in Edgar Browning's, "Stealing From Each Other." Acharya and Richardson's "Restoring Financial Stability" and "Regulating Wall Street" are still the best books on the financial crisis and how to prevent another. I expect "The Map and the Territory" to sell wildly, but most readers will find that it does not live up to the hype. Greenspan most likely has very interesting things to write, but sadly he has not produced them here.
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225 of 288 people found the following review helpful
1.0 out of 5 stars Mr. Greenspan's inside-out view of the economy, October 22, 2013
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I read this book from the perspective of an investor who specializes in real estate investment trusts (REITS). I was a REIT investor in 2008 when the economy failed, as I am today. I was near the financial center of the financial collapse of 2008 and able to observe it closely as it unfolded. Earlier in my career I worked as an IT company owner who studied the progress of business in the USA and globally by observing my client companies' businesses through the computer systems I developed.

Thus, I have a close up view of the financial collapse AND a broad-based view of the real world economy that underpins it. This perspective has made me a successful investor. But I do confess to having been blindsided by the 2008 collapse, as Mr. Greenspan and most professional economists were. This book explains Mr. Greenspan's opinion of WHY so many professional economists were caught napping during the Great Recession that began in 2008 and casts its long shadow over the economy today and for years to come.

Mr. Greenspan gets right to the heart of the question:

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On the face of it, the financial crisis also represented an existential crisis for economic forecasting. I began my postcrisis investigations, culminating in this book, in an effort to understand how we all got it so wrong, and what we can learn from the fact that we did..... What went wrong? Why was virtually every economist and policy maker of note so off about so large an issue?
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Having phrased the question in precisely the right words, Mr. Greenspan then proceeds to obscure the answer by giving the literary equivalent of the verbal "mumble" he made famous in giving indecipherable testimony to Congress while Chairman of the Fed.

The book begins with an essay on investor psychology, popularly known as "animal spirits" that delves into the psychological reasons why investors may commit or withhold their capital from the economy. That is followed by a chapter on banking regulation. Then there is a discussion on statistical analysis followed by a rambling chapter on THE ROOTS OF THE ECONOMIC CRISIS:

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The toxic securitized U.S. subprime mortgages were the immediate trigger of the financial crisis, but the origins of the crisis reach back to the aftermath of the Cold War. The fall of the Berlin Wall in 1989 exposed the economic ruin produced by the Soviet bloc's economic system.
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I did not find Mr. Greenspan's insight to be meaningful. I'm not unsophisticated about business, real estate, or the financial markets. I just did not find anything in this book that told me anything that a person with "101" experience in any of these fields would not already know. The macro-economics history lessons that Mr. Greenspan relates have been covered much more lucidly in Paul Samuelson's economics books of the last few decades.

Having avoided answering (at least to my satisfaction) the question of WHY the economy failed in 2008, Mr. Greenspan proceeds to explain his theory of why the recovery remains so tepid five years later. Economic Conservatives will find this chapter UNCERTAINTY UNDERMINDS INVESTMENT to be in synch with their economic philosophy:

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That business had become markedly averse to investment in fixed long-term assets appears indisputable. The critical question is why? Although most in the business community attribute the massive rise in their fear and uncertainty to the collapse of economic activity, many judge its continuance since the recovery took hold in early 2009 largely to be the result of widespread government activism in its all-embracing attempt to accelerate the path of economic recovery and regulate finance. The evidence tends to largely support the latter judgments.
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And yet it's curious why the stock market crashed and the economy failed in 2008 during an era of business-friendly governments (i.e. the Clinton Administration and the Conservative Republican Congress followed by President Bush whom I voted for twice).

During the 11.5 years between August 5, 1997 (the date of the first tax cut) to January 1, 2009 --- while taxes were cut to 80-year lows and numerous free trade agreements were enacted --- the S&P500 fell from 952 to 825, losing 13% of its value in non-inflation adjusted terms and 34% when adjusted for inflation.

Yet as soon as the "anti-business" President Obama was inaugurated in January, 2009 the stock market began a sustained rise that has GAINED 112% to date as the S&P500 has risen from 825 to 1750. And the gain did not come just because "the Fed is printing money." It came because corporations ARE MAKING RECORD PROFITS.

I would postulate that the economy failed in 1998 through 2008 for reasons unknown to ivory tower economists like Mr. Greenspan who have never operated in the real world economy of factories, offices, stores, and property:

1. Beginning in the late 1980s companies began stunting the consumption side of the economy with massive dis-employment of the American workforce. Millions of American jobs were shipped to Mexico, India, and China. Millions of Americans were put out of work by excessive importation of foreigners on H1-B visas. Millions were put out of work by mergers and acquisitions and by improvements in machine technology and automation. Millions were let go because company executives discovered that profits increased when they replaced high-paid senior career people with cut-rate hourly contract workers.

2. These millions of Americans were involuntarily removed from the labor force for reasons that might be considered to be good or bad, necessary or unnecessary, depending on one's point of view. An entire vocabulary of euphemistic terms like "rightsizing, downsizing, offshoring, outsourcing, early retirement, work force reductions, reengineering" was invented to explain the dis-employment phenomenon. Labor force participation peaked in 1999. That was the last year when any American who wanted a job could find one.

3. In order to fight rising unemployment Alan Greenspan lowered interest rates, believing that lower rates would boost corporate cash flows by allowing corporations to refinance their debt. The increased cash flows were supposed to encourage American companies to invest in expanding their businesses and hiring more American workers. President Bush also asked Congress to cut income taxes on capital gains and dividends to further boost business cash flow under the theory that it would be reinvested in growing the business.

4. Lowering interest rates and cutting taxes FAILED to grow the economy (in contrast to the success of these policies in reviving the economy during Reagan's years) because:

----- A) By 2000 many American companies were moving overseas and hiring foreign labor to replace Americans. Lowering interest rates and cutting taxes ACCELERATED the process of dis-employing Americans.

----- B) The increased profits that resulted from replacing Americans with Third World labor went exclusively into the pockets of the business owners. The incomes of the 1% soared while the 99% were afflicted with job losses and falling wages.

5. Consumer demand slackened due to the falling incomes of those put out of work or afflicted with falling wages.

6. With consumer demand falling, investors could not profit by investing in expanding production of goods and services. So, instead of creating real wealth by building factories that hire employees to produce goods and services, the 1% poured their money into real estate and leveraged real estate derivatives like collateralized debt obligations (CDOs) and credit default swaps (CDS). For a few years these paper "investments" soared even while American corporations hollowed out the economy by moving production overseas.

7. By the summer of 2007 the accumulation of job losses from layoffs and involuntary retirements made it impossible for large numbers of people to pay the mortgages on their homes.

8. When homeowners defaulted on their mortgages due to job losses, the leveraged CDO and CDS derivatives became defunct. The CDO's and CDS's had puffed up the asset ledgers of the banks. When they became worthless the banks discovered that they had only liabilities on their ledgers and no assets to offset them. The banks became insolvent.

9. The banks became insolvent and the stock market crashed. Business stopped dead in its tracks. The injection of several trillion dollars of printed/borrowed paper money by the government resuscitated the economy. Without that infusion every bank and business in the country would have failed and unemployment would have reached 100%. It would have been back to the Stone Age barter economy.

10. Five years later the jobs-creating side of the economy remains sluggish even though corporate profits are soaring to all-time record highs as are their publicly traded stocks. Is employment sluggish because:

----- A) Business won't invest in creating jobs because it is afraid of the allegedly "anti-business" policies of President Obama.

----- B) Business isn't creating enough jobs for the same reasons it hasn't been creating enough jobs since 1998 --- offshoring of American jobs to Mexico and China, excessive immigration of low paid foreigners on H10-B visas, downsizing, rightsizing, work force reductions, redundancies created by mergers and acquisitions, and early retirements.

Conservatives believe A) because it jives with their belief that free market capitalism cannot fail unless it is debilitated by a "Liberal" Democrat President. I would suggest that Greenspan doesn't understand why the economy failed because he can't get past his political lens to understand that B) is the correct answer.

If B) is the correct answer then cutting interest rates will have no effect in boosting employment. And so far, they haven't.

By failing to recognize that B) is the correct answer, Mr. Greenspan has developed an inside-out-view of the economy. He thinks that people aren't working because "entitlements have become too generous." In truth, people aren't working because corporations have shipped their jobs to foreign shores, replaced Americans with foreigners on H1-B visas, replaced fulltime workers with part-time workers, and forced millions into involuntary retirement.

Mr. Greenspan thus advocates economic policies that are OPPOSITE to what is required to recover the economy. He wants MORE tax cuts even though the enormous tax cuts of 1998-2008 failed. He wants MORE foreigners imported on H1-B visas at a time when millions of American-born engineers can't find work. He wants MORE free trade agreements even though our economy has been debilitated by ever-rising trade deficits with low-wage countries that suck American jobs out of the economy.

I would conclude that Greenspan's book misses the mark due to Mr. Greenspan's lack of acquaintance with real world economics. He has an inside-out view of the economy based on ivory tower political ideology. And even that viewpoint is not coherently expressed.
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7 of 7 people found the following review helpful
1.0 out of 5 stars Greenspan's litany of reasons how the world failed him, December 21, 2013
This review is from: The Map and the Territory: Risk, Human Nature, and the Future of Forecasting (Hardcover)
The most obvious lesson for aware readers is that Greenspan is among the luckiest apple-polishers in US history. Greenspan claims to be an advocate of global free markets and economic meritocracies driven by minimally regulated private sector enterprise; supporting that belief is widespread agreement that Greenspan's most notable "successes" are saving US finance in 1987, and the Clinton years. As with many political figures, facts on file do not match their memories.

The Crash of '87 was the market response to uncertainties caused by five years of debt-fueled federal binge spending and speculation in high risk securities. Greenspan's response was Keynesian; he pumped as much public money into the market as it took to maintain the facade of integrity in finance. By 1987 politicians had redefined financial services from necessary parasites to the foundation for all that is good about America. By the end of 1988 well-employed Americans lived falsely optimistic lives in a false economy propped up by massive public debt. The people Greenspan needed to please were pleased, and so politicians and the corporate welfare classes tended to grade Greenspan's performance in the range A+++ to A++.

A different parallel reality tended to be unacknowledged. The middle class was shrinking as the quality of jobs declined. Risks to taxpayers increased as the quality of securities declined and government debt exploded. Still, Greenspan apparently felt the transfer of wealth from middle class consumers to parasitic financial services industries needed more accelerant, so The Maestro continued to weaken quality constraints on credit and debt claiming rational markets would check financial avarice.

The direct result was that after 1987 inflation moved from shopping baskets to assets, a class of goods not typically covered in month-to-month inflation measures, and which could therefore be allowed to continue unremarked by most "experts" in the art of economics. Massive asset inflation after 1987 provided the pretend security for the real leverage that fueled the doubtful boom of the 1990s which set the stage for the housing bubble that followed. As happened in the 1980s when the federal debt binge combined with loosened shackles on financial avarice to create a feel-good economy, the 1990s boom was built on private debt, asset inflation and even fewer shackles on financial avarice to create a feel-good economy. 'The 1980s and 1990s economies felt real, our jigged measures show growth, so it was real,' remains the position of most "experts" trained in finance and economics. The 1990s boom is The Maestro's second widely proclaimed triumph.

That The Maestro ignored history and real time lessons of the dot.com bubble didn't surprise sentient Greenspan Watchers. There is an argument for the belief that the lessons of the dot.com bust - speculators can lose money on Wall Street - do not transfer well to the housing bubble and bust. Because of the obviously larger implications to the nation's financial infrastructure, there is no argument supporting Greenspan's failure to address the risks of the speculator-driven housing bubble that put at risk most of the assets of millions of citizens.

The traits that appear to define Greenspan are 'self-serving' and 'hypocrite'. No senior official in US history advocated keeping government out of the economy more frequently, but through the end of his eighteen year tenure at the FED no official in US history intervened in private enterprise to the extent Greenspan did. No senior official in US history survived a similar number of years talking one set of values while practicing a polar opposite set of values to cover the damage caused by their public views. The Maestro's career is a testament to sycophancy to political power regardless of costs to the nation.

But I digress...

Back to the book: buy it if you are a dyed in the wool fake-conservative seeking bathroom reading defending pillar to post thinking and reactionary management. People with math and logic skills sufficient to overcome their worst political instincts can also use this book in their bathrooms, but there are more comfortable and lower cost alternatives.
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8 of 9 people found the following review helpful
3.0 out of 5 stars 3 stars for the effort, but I find the book not worth reading, November 19, 2013
This review is from: The Map and the Territory: Risk, Human Nature, and the Future of Forecasting (Hardcover)
3 stars mainly for the effort, as I found the book largeley disappointing. Mr. Greenspan tries - but fails - to justify his mistakes with the fact that "no-one knew" what was going to happen. Fair enoguh, but that's not an issue worth writing a book about, especially so when the author's primary interest is pointing the finger of blame somewhere else.
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5 of 5 people found the following review helpful
3.0 out of 5 stars Lacks cohesion, December 15, 2013
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This review is from: The Map and the Territory: Risk, Human Nature, and the Future of Forecasting (Hardcover)
I expected Alan Greenspan's years of experience and wisdom to come together in some kind of "ah ha" moment. This is really just a compilation of economics and statistical vignettes. Lots of interesting stuff, but no real message in conclusion.
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23 of 30 people found the following review helpful
2.0 out of 5 stars Not worth reading. Nothing new here., October 28, 2013
By 
John E. Pombrio (Manchester, CT United States) - See all my reviews
(REAL NAME)   
This review is from: The Map and the Territory: Risk, Human Nature, and the Future of Forecasting (Hardcover)
I came into this book with great expectations. A man in the heart of the US economy explaining how the financial crisis happened. By the second chapter, I was running around the house looking for writing materials to jot down things that I felt were wrong or just puzzling. I was also muttering at the book- never a good sign. There is just nothing NEW here- rehashing the same old excuses, explanations, and the party line. 175 pages in, I had two full sheets of points made. I am not sure I will bother finishing the book as he is back reminiscing about his business triumphs during the 60's and 70's. (EDIT I finished the book, the rest slightly better than the first half- added a star for his economic history lessons in the back). I could write out a long list of things but I will just name a few:

1. Mr. Greenspan NEVER mentions the public DEBT or Fed INTEREST RATES or UNEMPLOYMENT RATES or FEDERAL PENSIONS in the book. Of all the dozens of charts in the back, absolutely none show any US, public, or business DEBT nor are any about Fed INTEREST RATES. He explains that the low interest rates in the US and around the world during the 2000-2008 period were strictly due to the massive increase in savings by the Chinese and other developing countries. Nor was the Fed in any position to pop the housing bubble that he, of course, saw coming but had his hands tied.

2. Those same charts are "cherry picked". One chart starts in 1840. The next chart in 2007. Sometimes he uses the old "let's skip that old zero point" making the chart look REALLY BIG (by showing how things changed from .95- the bottom of the chart all the way to 1.15 the top of the chart). The 10 regression charts are useless to me, the reader, and feels like Mr. Greenspan is just showing off his economic smarts.

3. Here are a few more. He blames Fannie and Freddie.
He says to let Too big to Fail banks fail NOW but of course supports the TARP actions to the fullest.
The Fed should never step in and try to save failing banks or businesses unless under "extreme conditions"- that would become "addictive and politically cost free actions for every conceivable adverse condition".
He thinks the stock market prices are fine (if you start back 100 years or so on your charts) and they are vital to the economy to the country to keep them as high as possible- to be protected from all those inbred frightened investors with their animal spirits.
CEO pay is in line with the growth in the company's stock prices the last few decades.
People's savings rates are low since 2000 due to too much government entitlements with Social Security and Medicare- nothing to do with the people.
Financial dealings lately are now too complex to regulate- indeed those new pesky regulations recently passed will dampen financial institutions and hurt the economy.
Ah, and back in the good old days with President Ford, he knew that the recession would take care of itself, and of course it did.
There are too much entitlements, decreasing productivity, personal savings, and capital investments. They will also hurt the military and infrastructure upkeep.

Want to go on a really wild ride, a rant through the economic history of the US for the last 100 years? One that lambasts the Fed, FDR, and puts President Eisenhower as one of the best presidents the US economy ever had? Try the terrific "The Great Deformation" by David Stockman. That book is really interesting and completely at odds with Mr. Greenspan's non-book. The Great Deformation is a 5 star book. This one is not.
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8 of 10 people found the following review helpful
1.0 out of 5 stars Alan has learned, since 2008, nothing and spends 400 pages proving it., December 11, 2013
By 
Thomas H. Daly (Glastonbury, CT USA) - See all my reviews
(REAL NAME)   
Chairman Greenspan does not deal with why the Fed did nothing during the housing bubble.
He does not deal with the terrible Basel II agreement among the central banks, and why it was so wrong.(Sovereign debt as risk free, low reserve requirements)
He complains about Greece and Spain but offers no reason why the German and French banks were so foolish as to continue to loan them money until the very end.
He does praise Volcker, but doe not deal with why his mentor Burns did nothing to stop inflation.
He complains about the cost of Social Security and Medicare but offers no alternative, nor does he compare the US government costs to other modern industrial nations.
There is no praise for the one modern president who actually got rid of the deficit, or why it grew so large in 2001-2007.
At one point he says that fighting inflation does not cause unemployment, and a few pages later he deal with Volcker and a great recession.
He does not like QE1-QE3 but has no discussion of the role of deflation in the great depression, or what fiscal and monetary policy should be to avoid deflation.
He worries that the richest 10% are saving at a somewhat lower rate than before, but ignores the fact that they control more of the GDP. and that inequality could threaten capitalism.
He preaches competition as the basis for capitalism but does not speak to oligopolies.
He does not speak of the power to influence democracy that goes with extreme wealth.
He longs for the days of gold and silver, ignoring the damage the English did to India and China with opium to solve their balance of payment problem and lack of silver.
His charts are many but he does not deal with causation, only that the variables coincide. His failure to deal with the real world and hide in statistics is probably why his chairmanship will go down as a great failure, with the loss 20 trillion dollars of personal US wealth in 2008, and a worldwide depression.
In short he has not learned anything from the Fed and other regulatory failures in this century.
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3 of 3 people found the following review helpful
3.0 out of 5 stars Both very good and very bad, November 24, 2013
This review is from: The Map and the Territory: Risk, Human Nature, and the Future of Forecasting (Hardcover)
This book is both very good and very bad.

The very good part is the clear and persuasive message that federal government spending on social welfare programs (Social Security, Medicare, Medicaid) is out of control and forcing the economy into low growth. That means that our present situation is likely to stay the same or get worse. Put another way, the long post-war boom will not come back. This problem is not solved by tiny cuts in spending or tiny increases in taxes. There must be a large decrease in all government spending to allow the true engine of growth to return: that engine is entrepreneurship from private investment. His conclusion is inescapable.

The very bad part is the really poor writing (sorry Dr. Greenspan, but it is true). Reading this book is very heavy going. Be prepared for very long sentences – over seventy words in many cases. The sections and chapters do not flow into each other and lack clear transitions. Perhaps Dr. Greenspan’s iconic stature and intellectual power intimidated the publisher’s editors. Maybe someone else will take this powerful analysis and shocking conclusion and turn it into a compelling message.

Some people have criticized the book because of Mr. Greenspan’s role in the financial crisis of 2008. The book contains as much an admission of culpability that you can expect from a Washington insider.
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2 of 2 people found the following review helpful
1.0 out of 5 stars Unbelievable!, May 14, 2014
This review is from: The Map and the Territory: Risk, Human Nature, and the Future of Forecasting (Hardcover)
The man who failed to predict the global financial crises, which he, more than any other single person, was responsible for, is back in the business of making predictions. Now he predicts (and longs for) a future in which American business will be able to compete with China by replacing its workers with robots. Once the middle class, like the working class, are gone, "we" (and you know who he means by "we") will have a utopia in which "a small handful of especially talented people create and operate the newer technologies". It's not clear what Greenspan thinks will become of everyone else (they certainly won't be getting welfare, which Greenspan sees as the cause of all evils), but it is clear that he doesn't much care.
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2 of 2 people found the following review helpful
3.0 out of 5 stars OK Read, Need an MBA, March 4, 2014
By 
Douglas Long (San Rafael, CA USA) - See all my reviews
(REAL NAME)   
This review is from: The Map and the Territory: Risk, Human Nature, and the Future of Forecasting (Hardcover)
The title is misleading, making one think this is a popular read.

This is a decent read for those with the background in economics. But I'm not kidding when I say you do need an MBA level of understanding of these concepts to make sense of what he is trying to say.

Having said that, he covers a lot of information, and has a lot of interesting tidbits of information. On the negative side, it is disorganized, jumping all around the time line. Of all the books on this general topic, I would give it a grade of B.

He was a key player in these events, so don't expect an impartial discussion of the issues. He has his opinions, justifies his actions, etc. Among the criticism here on Amazon is that he doesn't accept blame for some things. Well, he's arguing his case. Don't expect him to impartially analyze his own life's work.
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