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Pop!: Why Bubbles Are Great For The Economy Hardcover – Bargain Price, May 8, 2007
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From Publishers Weekly
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.
"Its hard to resist crossing your fingers...hoping that the next bubble bursts while youre 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.
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
Top Customer Reviews
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.
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.
In the 1950s, Joseph Schumpeter coined the phrase "creative destruction" and applied it to modern capitalism. That is, no economy grows in a straight line. Boom follows bust which follows boom. The process pushes the weak parts of an economy to one side and allows the strong to grow. The end result is greater wealth. The antithesis would be North Korea today. No booms, no busts; just a total mess. A people enslaved and famine continually threatening.
In retrospect, I know my expectations were too high. I had come to believe that "Pop!" would be a serious book of economics. How naïve was I? I should have realised better with the title of the book.
So, for the general reader wanting an overview of economic booms, this book is fine. For the reader wanting something more, go elsewhere.
Gross does not contend that all bubbles are useful - eg. investors buying Cisco at $70, only to see it fall to $16 have not helped the American economy - it is only when commercial infrastructure is left behind that others can use. Further, Gross concedes that government cannot be relied on or expected to pick those bubbles to support.
However, Gross does not consider the fact that overbuilding assets inevitably results in relative scarcities, higher than necessary costs, and misapplication of resources - certainly not beneficial. Further, qualifying his conclusions to "only when commercial infrastructure is left behind that others can use" severely limits the generalizeability and value of his thinking. Incredible amounts of valuable capital have been wasted in the Holland tulip craze, Motorola's satellite phones, agricultural subsidies, modernizing American industry (only to see the work move to China and India), providing college educations for jobs that don't require them (one expert estimates this at 50%), doubling inflation-adjusted per-pupil expenditures (including fixed assets) to no avail, and ballooning the costs of American health care (including fixed assets) to more than twice the costs of other developed nations.
Most Recent Customer Reviews
Not that I'd expect anything written by Daniel Gross to be worthy of reading, I was initially intrigued by the claims made by this book. Read morePublished on September 1, 2010 by cuthere
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... Read morePublished on December 27, 2008 by R. E. Jorden