Thursday, April 24, 2014

The "Most Important Book Ever" Is All Wrong

On Bloomberg View, Clive Crook takes a sobering look at Piketty's "Capital in the Twenty-First Century": "It's hard to think of another book on economics published in the past several decades that's been praised as lavishly as Thomas Piketty's "Capital in the Twenty-First Century." The adulation tells you something, though not mainly about the book's qualities. Its defects, in my view, are greater than its strengths -- but the rapturous reception proves that the book, one way or another, meets a need."

So what is the problem with "The Most Important Book Ever"?: "Quite a few things, but this to start with: There's a persistent tension between the limits of the data he presents and the grandiosity of the conclusions he draws. At times this borders on schizophrenia. In introducing each set of data, he's all caution and modesty, as he should be, because measurement problems arise at every stage. Almost in the next paragraph, he states a conclusion that goes beyond what the data would support even if it were unimpeachable."

The Mises Economic Blog summarizes neatly what's wrong with the book and with its idolizers: "In 1936, a dense, difficult-to-read academic book appeared that seemed to tell politicians they could do exactly what they wanted to do. This was Keynes’s General Theory. Piketty’s book serves the same purpose in 2014, and serves the same short-sighted, destructive policies. If the Obama White House, the IMF, and people like Piketty would just let the economy alone, it could recover. As it is, they keep inventing new ways to destroy it."

Monday, April 21, 2014

Private Equity Performance

From McKinsey&Company: "Private-equity performance has been misunderstood in some essential ways. It now seems that the private-equity industry decisively outperforms public equities with respect to risk-adjusted returns, which may prompt return-starved institutional investors to allocate even more capital to the asset class. But this good news comes with an asterisk: top private-equity firms now seem less able to produce consistently successful funds. That’s because success has become more democratic as the general level of investing skill has increased."

Monday, April 7, 2014

Manufacturing in the USA


Manufacturing Innovation Blog: "This infographic tells the story of manufacturing.  It shows how manufacturing enables our everday lives, drives our economy, offers many different rewarding careers, and what can happen when communities across the country come together to show the public what manufacturing is…"