Wintersalen Sale
 
 

Special Offers see all

Enter to WIN a $100 Credit

Subscribe to PowellsBooks.news
for a chance to win.
Privacy Policy

Tour our stores

PowellsBooks.Blog

Authors, readers, critics, media — and booksellers.

 

The 21st Century Economy: A Beginner’s Guide

If we've learned one thing during the recent global meltdown, it's that no one really understands how the 21st-century economy works. Which means that we all need to get out there and play a part in finding the right path forward — and not leave everything for the experts to decide.

The problem is that, until now, none of us felt qualified. "Economic literacy" was defined as having a fancy degree or, at least, having made our way through one of those thick economic textbooks that they make you read in Econ 101.

But what did all that book-learning give to those who were asked to chart the course of the world economy over the past few years? Not much, apparently. Recessions, depressions, bubbles, currency crashes, credit crunches, and global economic meltdowns. That's what the so-called experts were able to cook up.

It's amazing that the best and the brightest, running the world's banks and governments (and regulatory agencies), were unable to see that the "financial weapons of mass-destruction" — as Warren Buffet called the new-fangled financial instruments — were going to one day blow up in our faces.

Even second-rate crooks like Bernhard Madoff were able to fool the smart guys who were sent to oversee his bogus investment activities. Even after someone tipped off the SEC that something was rotten in Madoff's world, the experts were unable to uncover any wrongdoing.

Huh? Madoff was supposedly overseeing the investment of more than 50 billion dollars worth of clients' funds, and yet had apparently bought virtually no stocks or bonds for years. So, how hard would it have been for the SEC agents to tell him, "Hey, Bernhard, show us the money — or show us where it was invested." How hard could it have been?

And yet the experts got fooled.

So if we can't trust those "in the know," who can we trust? Maybe we should take a lesson from the game show Who Wants to Be a Millionaire? and rely more on the audience to help sort out the world economic mess. Maybe the amateurs could actually do a better job that the experts.
Statistics actually support this hypothesis. The success rate of the audience in answering the difficult questions is considerably higher than any other tool at the contestant's disposal — including the carefully chosen friend that people are allowed to call when they're stumped. It seems that the crowd gets it right more than 90 percent of the time, versus less than 70 percent for the so-called "experts."

But the people in power tend to ignore our voices. Brushing us off with an arrogant "Let us run the economy. You'll see, everything will be made right. Just be patient." But aren't these the same "experts" who decided to send Air Force One on a flyby of New York monuments? If Obama had decided to consult the people on the ground — asking them how good an idea it was to send a big 747 heading toward the statue of liberty in broad daylight, along with an F16 in pursuit — the answer would have been an overwhelming "Go back to Washington and come up with a better idea."

But they didn't ask. They left the decision-making up to the experts. And look what happened.
Now the whiz kids in Washington, London, and New York are trying to solve the economic crisis. Why aren't they asking any of us what we'd like them to do? Maybe we should tell them — without being asked.

But how can we step up and have our voices heard if we can't tell the difference between Keynesian stimulus plan or quantitative easing? Between the G8 or G20? Or even the difference between GNP or GDP? If we don't have the economic tools at our disposal, how can we become a part of the debate?

It's not easy. In this increasingly complex world, people tend to throw up their hands and say, "It's all too difficult for me to understand. Let the experts figure it out." Remember when people actually got down and crawled under their cars to see what was keeping them from running properly? When was the last time anyone you know did that? We hand over the reins to someone who's supposed to know more than we do. Which is the right way to proceed — as long as there's some sort of accountability.

But without any real knowledge of the underlying mechanism, economic or otherwise, it's hard to know if the person telling us we need a new carburetor (or economic stimulus plan) is really giving sound advice. It's important. Because what's being done in Washington and New York does affect us. In more ways than we can imagine.

In the interconnected world economy we live in, everything is connected in ways none of us can really understand. I call it "fusion economics." Think of a fusion reaction, where molecules interact constantly, giving off an enormous amount of energy. We just need to know how to use all that new energy.

And instead of waiting for the experts to figure out what's right — for us and for them — maybe we should start asking, and answering, the salient questions. There's no reason that our lack of formal economic training should keep us silent.

÷ ÷ ÷

Randy Charles Epping, based in Zurich, Switzerland and São Paulo, Brazil, has worked in International Finance for over 25 years, holding management positions in European and American investment banks in London, Geneva, and Zurich. He has a master's degree in International Relations from Yale University, in addition to degrees from the University of Notre Dame and the University of Paris-La Sorbonne. He is currently the manager of IFS Project Management AG, a Switzerland-based international consulting company. He is also the president of the Central Europe Foundation, which provides assistance to students and economic organizations in Central and Eastern Europe. In addition to several other books on the world economy, he has written a novel, Trust, a financial thriller based in Zurich and Budapest. Mr. Epping holds dual U.S. and Swiss citizenship and is fluent in six languages: English, French, German, Italian, Portuguese, and Spanish.


Books mentioned in this post

  1. Trust
    Used Hardcover $9.95
  2. The 21st-Century Economy: A... New Trade Paper $15.95


Randy Charles Epping is the author of The 21st-Century Economy: A Beginner's Guide: With 101 Easy-To-Master Tools for Surviving and Thriving in the New Global Marketplace (Vintage Originals)

6 Responses to "The 21st Century Economy: A Beginner’s Guide"

  1.  
    Mark Jordan June 3rd, 2009 at 7:55 am

    This is a great book! Must read for anyone interested in how the modern economy works, which these days should be everyone.

  2.  
    Shawn Engelberg June 3rd, 2009 at 7:57 am

    I read the book. It's great. He addresses the issues in a clear and understanding way. I now ALMOST understand most of the things published in the news and the things politicians are saying about today's bailouts etc. It's refreshing to be able to formulate my own views on the major issues we're facing in today's global economy.

  3.  
    Annette Friskopp June 3rd, 2009 at 11:46 am

    I loved the novel Trust. Full of suspense and takes you inside the world of banking from WWII to the present. A must read!

  4.  
    Roberto Rossi June 4th, 2009 at 7:51 am

    I read "Trust" in one day. You just can't stop reading it!



    Either to support or criticise the system we live in, the 21st-Century Economy explaines so simple and clear how things work. It is definitely a Must.

  5.  
    Skip Hewitt June 4th, 2009 at 2:57 pm

    I went to high school with Randy. I read Trust about 6 months ago & enjoyed the novel. I saw Randy on Book TV CSPAN & was impressed with Randy addressing the Global implications of the current economy. I look forward to reading the new book.
    PS: Will they make Trust into a movie? Please do not cast Tom Cruise.

  6.  
    Raul Juste Lores June 7th, 2009 at 2:25 am

    I loved the "second-rate crook" definition... Great text, great book. I felt less economic illiterate after reading it.

Post a comment:

 
Get Your Gravatar

  1. Please note:
  2. All comments require moderation by Powells.com staff.
  3. Comments submitted on weekends might take until Monday to appear.
PowellsBooks.Blog uses Gravatar to allow you to personalize the icon that appears beside your name when you post. If you don't have one already, get your Gravatar today!
spacer
spacer
  • back to top

FOLLOW US ON...

     
Powell's City of Books is an independent bookstore in Portland, Oregon, that fills a whole city block with more than a million new, used, and out of print books. Shop those shelves — plus literally millions more books, DVDs, and gifts — here at Powells.com.