Financial Shenanigans: The Roaring '80s (Smith, 1988)

Adam Smith. The Roaring ‘80s (1988) “Adam Smith” (George Goodman) was a financial adviser with a knack for story-telling.  For some time he told those stories for Esquire and other magazines. This book is one of several that collected his columns. He understands his subject, and he knows enough people in the moneysphere that he can always get the interview that will clarify the current economic crisis or hiccup. And most crises turn out to be hiccups. His style is breezy (for once the cliche fits), a mix of high, medium, and low-level explanation, and illustrative anecdotes. Lots of anecdotes. The effect is that, at least while you’re reading about it, the most abstruse economic theory seems plausible. Or not, depending on Smith’s thesis.

What Smith demonstrates most, though, is that economics isn’t just about the money, and that collectively we have at best a confused mess of notions about finance and the economy generally. At worst, we suffer from a mess of contradictory superstitions, chief of which are the ones surrounding the concept of a free market. Smith’s accounts of financial shenanigans make it quite clear that all markets are distorted by players with market clout. And that these players all eventually succumb to the temptation to use their clout to make the market work for their exclusive benefit. Financial crime may lack gore, but there's no shortage of victims.

A page turner. The time frame is the Reagan years, plus and minus, and all that’s changed since then is that the libertarians have more clout than ever. They will finish the work of economic destruction that began under Reagan. That destruction did not succeed. Smith (and his group of financial gurus) predicted the financial crisis that hit in 2008. Without government bailouts, that crisis would have destroyed the American financial industry. This time, with the government apparatus being systematically gutted, there may be nothing to save the us from the wreck.

Recommended. ****

Happy Rockers Help Solve Crime (I Only Read Murder, 2023)

Ferguson, Ian and Will. I Only Read Murder. (2023) Miranda Abbott, aka Pastor Fran of TV crime series fame, a wise fool of an actor who’s past her prime and bankability, rides to Happy Rock, Washington, on a bus (!) when summoned by her (soon-to-be ex-) husband. He operates a bookshop whose name supplies the title for the novel. Miranda becomes entangled in an amateur play productions, and when the lead dies after ingesting real poison, she must use what she has learned from her role as amateur sleuth to untangle the murderous knot. Which she does, and she gets her husband back, too (you didn’t think it would end otherwise, did you?)

A mildly amusing entertainment, which I think would work better edited down to about two-thirds of its length. Or maybe not. Happy Rock is a bucolic place, where people live at half-speed, so the laid-back pace of the story matches the ambience. And the Happy Rockers are much wiser and more charitable than Miranda realises.

The Fergusons are Canadian, so why have they set this novel in the USA? Are they angling for a TV series? What a hook: A TV series featuring an amateur sleuth who acted in a TV series.... Maybe they should angle for salmon instead. The fishing is good on the Tillamook river, they say.

Recommended for any mystery fan. **½

X (is for Unknown) (Grafton, 2015)

Sue Grafton. X. (2015) A rambling novel with several subplots. The main one ends with Kinsey’s near-death (usual) and an unresolved crime (unusual). All the regulars appear, even Dietz, who supplies a crucial (but distant) clue. 498 pages in the paperback version, which shows the publisher let Grafton write as she wished. What she wished was a kaleidoscopic view of the world she had created. As if to remind herself. She died two years after the publication of this novel.

A good read. ***

Vinyl Café Classics: Extreme Vinyl Café (2009)

Stuart McLean Extreme Vinyl Café (2009) Some of McLean’s classics, the ones we want to hear again and again. Such as Petit Lac Noir, when Dave and Morley stop at the wrong cottage, and do the renovations and repairs their friend asked them to do as rent. Or A Trip to Quebec, where Sam misses the bus because Murphy answers "Present" for him. And then meets a girl with a skateboard and has the first love of his life.

There’s one more book of stories to go. I’m enjoying this wallow in McLean’s brand of not-quite-sentimental nostalgia. Well, I suppose other people will see sentimentality where I see bitter-sweet acceptance of the fragility of life, the fragility that makes it precious.

****

Secrets From the Vinyl Cafe (2006):

Stuart McLean. Secrets From the Vinyl Café (2006) The common motif in these stories is misunderstood information kept secret to avoid embarrassment or worse.

Usually the person who misunderstands keeps it secret, as Sam does when he misinterprets some words of Morley’s when she takes Arthur the dog to the vet. Sam believes that Dave is dying too. Dave keeps his confusions secret to avoid the embarrassment of looking foolish or incompetent.

And while these stories often veer towards tragedy, their structure is generally the same: each complication develops perfectly naturally from the current state of misunderstanding or misinformation.

Someone has said that tragedy and farce are two sides of the same page. McLean manages to put them on the same page, and the result is a satisfying mix of reality and the nostalgia that reminds us of what makes life worth living.

****

Gold finches, May 2019

 

We have a couple of feeders set up so we can watch them from our dining room. This feeder had to be replaced when squirrels found a way to break in.  

Depressions, demand, and money: An economic puzzle.

Some years ago, I posted the following in the Comment section of a major newspaper. I can't recall the details of the story, but there was the threat of an economic downturn.

A puzzle about Depressions keeps bothering me: In a Depression there is tremendous demand for goods, mostly consumables. There is a pool of workers willing to produce and satisfy that demand. It looks to me like a Depression violates the "law" of Supply and Demand.

So why doesn't production match demand? The culprit seems to be "debt", which must be paid at all costs. Even if it prolongs the Depression by reducing the profits needed to pay the debt.

Something is seriously wrong with an economic theory that can't explain why its founding principles don't work.

Another reader commented as follows:

@Wolf Kirchmeir 

Something is seriously wrong with your understanding of the economic dynamics of depressions. In a depression contrary to your assertion there is NOT a tremendous demand for goods. In fact, due to massive unemployment demand plummets, as does the incentive to supply that demand. The result is spiral where decreasing demand and the decrease incentive to supply feedback on one another. The dirty little secret about capitalism is that distressed markets when left to their own devices will collapse without outside i.e. government intervention in the form [of] fiscal and monetary policy and massive fiscal stimulus which creates enough demand to literally resuscitate a distressed economy until markets are able to function without that assistance.

This was my answer:

@[name] You're using classical economics, which equates "demand" with the amount of money available to spend. But demand is what I need and want. Money is merely a measure of my ability to satisfy my demand, and that's not the same thing at all.

In short, the classical explanation doesn't resolve the puzzle, it creates the puzzle.

My need and desire for stuff doesn't depend on the amount of money I have. It depends on how much food, shelter, clothing etc that I have. Demand rises and falls with that supply of needs and wants. To repeat: Money is just a measure of my ability to satisfy my demand. Not enough money means incomplete satisfaction of demand. It does not mean reduction of demand. On the contrary. The less money I have, the more demand I have. So if you use available money as a measure of "demand", that shows that there is something wrong with how money is distributed.

The reference to the "dirty little secret of capitalism" I think reinforces that point, if I understand it correctly. Government's injection of money doesn't "create demand", it just reduces the mismatch between demand and money.

The puzzle remains, because it's about  psychology, not about finance.