Tuesday, January 6, 2009

The Return of Depression Economics and the Crisis of 2008

Pardon me, dear reader, for the prolonged and unannounced absence, its just that things get a wee bit hectic in the wine business for the last few weeks of December into the first week of the New Year. It's can be fun and it can be profitable, but also stressing and quite the timesink. Needless to say, 2008 has finally ended and 2009 is underway. So we've got that going for us.

However while I wasn't blogging for the past few weeks, I have been spending more time than usual reading, and not reading for fun (see: Ender's Game, Xenocide) but for fun and education, the most recent book being Paul Krugman's The Return of Depression Economics, an updated re-issue of his 1999 book by the same title written in light of the current economic crisis that has us all abuzz. So I thought I'd offer up a little bit of a review, knowing full well that rare is the person that would have any interest in reading a book on economics for fun, and that I am weird that way. I accept that.

While I am wired in that strange way that makes books on history, politics, economics and other social sciences strangely fascinating, I would be remiss if I didn't mention that my knowledge of economics is extremely weak. In fact, a big portion of why I enjoyed this book is that in all my 27 years on this earth, this is the first time anyone has been able to adequately the difference between short-selling and long-selling in a manner that I can wrap my tiny brain around (and then, as with so many other economic concepts, wonder aloud how the fuck that's legal but I can't legally play poker or bet on football, but I digress). As I read through it I couldn't help but think to myself that in many ways, this book was like 'Economics For Dummies' as it explained concepts that even Mr. Holmes, a fine teacher in his own right, couldn't get me to understand during Economics classes in high school. Furthermore, upon explaining the concepts in a meaningful way it did a fantastic job of linking them all together.

Why did the Mexican economy crash in the '90s? Why did the Argentine peso collapse and how did they fix it? And then, after explaining them, Krugman would link the two events, link their causes and their solutions. Then he'd go into the oft-publicized Asian financial crisis of the '90s, explain it, and link it to the other two, and finally he stuck the landing and managed to offer a reasonable connection-atleast to my economics brain-between all three of those events and the ongoing worldwide economic crisis, and lend credence to the old adage that 'the past is prologue.'

He threw out just enough economic jargon to make it an economics book, but explained enough of it that I'd feel it to be pretty easy reading for anyone with just a basic understanding of the economy (ie, a high school diploma). And considering the hundreds of billions of dollars the American government is throwing at this economic mess, and the reality that this is having a profound impact on all of our lives and will for the foreseeable future, I find it have been a great read so that I'm atleast somewhat abreast of the economic events of the day. I'd strongly recommend it if you're into that sort of thing, and by that sort of thing I mean trying to keep yourself knowledgeable of current events and your [crooked] government.

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