Recommended: Unintended Consequences

Edward Conard is not an academic economist; he is a highly successful capital manager, a onetime head of Bain Capital's New York office. (ie - he walks the talk and shows results). His new book Unintended Consequences: Why Everything You've Been Told About the Economy is Wrong is an important book because it questions the very foundations of today's popular political policy making. This is not an easy book to read, with simple, intuitively plausible ideas.  It is not that it is too technical, too full of arcane economic terminology and impressive equations, as are some economics books.  It is hard because it requires looking at the whole economic system from the top down, as a complex interacting system, which is not the way it is usually explained to us. Nor is it biased to the liberals or the conservatives - he gives short shrift to the popular delusions of both sides.

I have had to reread sections a number of times to get my head around some of his arguments, but once understood they make a good case for his views, which are basically that what has made the American economy forge ahead of the rest of the world (and he shows it has, despite the current recession) is our appetite for innovation and risk taking. Policies which inhibit that risk-taking will inevitably harm and slow the economy.  A number of his ideas are contrarian - example: outsourcing low-skill low-wage manufacturing jobs to other nations is a GOOD thing for us (that frees capital and labor in this country for more productive, higher value-add work) and for them (labor wages may be low by our  standards, but they are a substantial improvement over the agrarian work alternatives they have).  It takes some work to absorb his arguments, but if he is right (and I am slowly coming around to his views on many of these points), then neither the Democrats nor the Republicans have viable plans to restore this nation's economy.

This book is well worth the (considerable) investment it will take to fully understand his ideas.