BOOK REVIEW Outrageous Fortunes (1643 wds.)

Outrageous Fortunes: The Twelve Surprising Trends that will Reshape the Global Economy
Altman, Daniel
Henry Holt, Times Books
2011
223 pp.
ISBN 978-0-8050-9102-1
$25.00 hard copy

Published Midwest Book Review, June 2011, Reviewer's Bookwatch, Joanne's Bookshelf.
Published The Livingston County News, 6/23/11.

These intriguing predictions could have significant consequences for our world: China will become poorer? [12] The European Union will disintegrate? [ 29] A new worldwide colonialism will occur? [56] Immigration will worsen brain drains? [71] Americans will be the world’s new sales force? [128]
Daniel Altman, who has written 3 other books and teaches at NYU’s Stern School of Business, groups these and 7 other predictions into 4 categories: Limits, Obstacles, Opportunities, and Risks in his new book Outrageous Fortunes: The Twelve Surprising Trends that will Reshape the Global Economy. These categories are somewhat problematic as some of his predictions overlap categories. For example, if the EU disintegrates, he says it will “unleash destabilizing forces,” which would seem to be a “Risk” as well as a “Limit.” Similarly, a new worldwide colonialism, which is an “Obstacle,” may have some “Opportunities” if exploitation is avoided. Nevertheless, he concludes, “Reconsidering how the global economy will develop in coming decades will help us perceive new opportunities and emerging risks.” [222]
For Americans, being insular won’t cut it anymore; the world is too integrated and interrelated. The recent financial crisis also illustrates it. The U. S. Federal Reserve was making loans to banks all over the world. Activities, not always hidden, have been taking place faster than many realize. Multinational companies and sovereign wealth funds (state-owned investment funds) from all over the world are involved in numerous countries and making monumental investments. If it seems overwhelming, it is. Numerous writers, including Mark Steyn in America Alone and Fareed Zakaria in The Post-American World, along with many others, have described some of these issues as well as how the demographics in America and other countries have worldwide effects. Even economists Reinhart and Rogoff in This Time is Different have pondered the complications of a global financial economy and the complexity of financial data.
Altman first predicts China will have enormous growth for a couple decades only to be followed by debilitating consequences because of their Confucianism, lack of legal and property rights, government corruption, inefficient corporate and managerial structures, and an aging and unproductive population, the latter which will exceed other countries’. In 2005, 67% of their population was working ages 15 to 59. By 2050, that will become 54%. [26] The U. S. working age population will fall from 62% to 56% by 2050 if current immigration and fertility rates continue. Without enough people working, there aren’t enough to sustain seniors’ living standards. Nevertheless, before China’s decline, Altman joins others in saying China may replace the U.S. as a superpower, with Shanghai becoming the world’s financial sector and the yuan or renminbi overtaking the dollar in world markets. [12] Then the China flame-out.
The European Union, a 27-country bloc with a half billion people and about 1/3 of the world’s gross domestic product will suffer losses of trade and economic growth that will unleash destabilizing forces and leave the world poorer. [29-30] Conditions of EU membership are reducing corruption and budget deficits 3% or lower, but they aren’t enforced. Some will survive their aging populations, costly pensions and benefits, tax increases, debt and borrowing, but some may default.[ 37-38] This sounds familiar, judging by news media reports. Altman cites Luxembourg, Ireland, Estonia, Sweden, Denmark, and Finland as having the lowest risk and highest potential for economic growth. [39-40] Perhaps this is already changing if Ireland’s recent news is accurate.
A third trend is that a new colonialism will leave the “colonizers and colonized worse off in the long term.” [49] “Many developing countries have control over valuable assets—minerals, metals, fuels, farmland—but are unable to develop them.” [53] Their 3 options are (1) to try and develop with their meager resources, (2) get help from the World Bank, UN, or International Monetary Fund (IMF), but that help comes with strings attached, or (3) allow foreign ventures and investment, which, as mentioned earlier, have been occurring right along. [55 ff] Problems may be land and property rights, economic exploitation, retarded living standards, and instability, just like earlier colonizations. [70]
Fourthly, he says immigration policies in rich countries will worsen the brain drain from poor countries, even as they get richer. [71] “Demographically and economically, both groups of countries will be undergoing a transformation that will be simply incompatible with their current immigration policies.” [74] The richer countries will need more low-paid workers to free up their native-borns who are developing higher skills and more productivity. Many richer countries have lower fertility rates that may drag down their economies. The only choices are having more babies or increasing immigration. [75] Once the demand for low-paid workers is addressed, countries will then “cherry pick” immigrants from other countries and a worldwide competition will ensue. He says China, Brazil, Australia, Canada, New Zealand, Switzerland, and Japan will contend with such immigration issues. [79-81] (As a side note, some 2005-2010 UN statistics show China, Australia, Canada, and New Zealand with increased birth rates, and Switzerland holding at same rate as 2000-2005.) Fertility and immigration are important not only for having enough workers to support aging populations but also for accessing skilled workers such as managers, scientists and engineers.
Altman believes a fifth trend will be a backlash against capitalism, that the battle between capitalism and communism (the Cold War) has consumed more hours, resources and human lives than ever before and that the clash of economic ideologies continues. [90-91] Twenty years after the fall of the Berlin Wall, the financial crisis shook the faith in capitalism, amplifying grievances with the IMF, WTO, banking, and multinational corporations. [93] Various countries swing from left to right and back again, depending a great deal upon living conditions. “Capitalism is most sustainable…when there is equality of opportunity….Socialism stalls when government controls the economy too closely.” [108] Sound familiar?
He says a sixth trend, or “Opportunity,” is that Americans will become the world’s sales force as our hucksterism is unmatched. He believes American commercial culture will spread because it reflects the American dream. [121] Although education, health care, and service sector jobs will grow, more will be needed for office support workers, sales, marketing research analysts, and public relations. [116] He warns, however, that the American ideal must be preserved or people will not covet the American lifestyle or their products.
In a fascinating chapter “As Global Economy Integrates, Middlemen Will Win,” he says the simplest and most important concept in economics is gains from trade, and online middlemen will be collecting enormous profits to connect workers and employers. [131] Private equity funds, hedge funds, and cross-border purchases will grow and may “sop up profits in poor countries, preventing masses from benefiting.” These middlemen will be engaged not only with tangible products, but also ideas, as such idea-factories like Bollywood are becoming an ever larger share of the global economy. [134]
The demise of the World Trade Organization is foreseen because the WTO requires consensus decisions of the group, which have failed numerous times, and countries have even walked out of meetings. Instead of the WTO increasing trade, sectors and blocs of countries will negotiate their own trade accords. [147] Efforts made as recently as March 2011 by V. P. Biden to help Russia join the WTO may have been a futile exercise.
In his chapters “A New Set of Lifestyle Hubs will Replace Today’s Business Hubs,” and “An Enormous Black Market will Arise,” he says the relaxing of immigration rules and the rise of middlemen will create opportunities that cut across countries regardless of their position on international trade. Electronic trading activities will burgeon, regardless of location. With every major change in how the global economy works, a new set of economic hubs is created while others sink into irrelevance, e.g. Rome, Damascus, Constantinople, Venice, Antwerp, London, New York City, HongKong. He says Singapore and Dubai are waiting to step up. [158] However, he also says, “…the new places/hubs could generate enormous financial black markets, and the next financial crisis would have serious consequences for both the black market and the regulated markets, and the new hubs may disintegrate as quickly as they arose.” [195] At the heart of financial expansion are the derivatives, which are nothing more than gambles and are largely unregulated. [177] The International Monetary Fund labeled 26 countries as “offshore financial centers,” which are attractive for privacy, ability for handling more money, having lower costs, and broader trade freedom. They will proliferate as the real big money stuff, daily trading to reap huge profits, will go offshore, like the Cayman Islands, which has 10,000 hedge funds. [193] As a result, policy makers may consider serious monitoring of foreign investments to avoid systemic risk similar to 2008. Altman describes a Star-Trekian electronic network that will collect voluminous financial data, which might address Reinhart’s and Rogoff’s concerns, and isn’t really so far-fetched. At Sandia National Laboratories in Albuquerque, NM, government scientists, the Federal Reserve, and the European Central Bank have network maps of the world’s biggest payment systems. [187] An early warning system could be possible.
The last two predictions about environmental issues and impotent political institutions cite tradable pollution rights, carbon credits, et al, [201-205], which may be too expensive for poor countries and make them dirtier polluters, cause worsening living standards, and lead to conflict, even exploitation by richer countries. Altman thinks the structure of political institutions will stop the world from solving its biggest problems. [215] He faults leaders for not having longer-term insights on all these issues, that educating citizens to think in long-term planning and cooperation is needed, and that rich and poor countries need to live within their means. Where have we heard that last one before? Eighteen pages of end notes and website references provide background and useful statistics for readers who should, at the very least, be cognizant of these world-changing and very plausible trends.
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BOOK REVIEW, The Other Wes Moore

(432 words) Apr. 2011

Moore, Wes.
The Other Wes Moore.
2010.
Spiegel & Grau (Random House trademark).
233 pp.
ISBN 978-1-58836-969-7.
$25 hardcover.

Published Livingston County News 4/28/2011.
Also published Midwest Book Review, June 2011, Reviewer's Bookwatch, Joanne's Bookshelf.

Two Wes Moores, one a Rhodes Scholar and the other a felon. The lives of two young boys with the same name, similar backgrounds, families, schools, from Baltimore and the Bronx are chronicled by Wes Moore, a veteran and NYC financier, in his book The Other Wes Moore. The other Wes Moore became imprisoned for life for murder. ‘Two roads diverged…,’ and the author’s psyche compelled him to find out what led them on such opposite roads.

When newspapers were reporting his Rhodes scholarship, they were also reporting the other Wes Moore’s involvement in a jewelry heist and a policeman’s death. The divergence so obsessed Wes that he wrote to the prisoner. The reply arrived about a month later that he could visit Jessup Correctional and talk with the other Wes.

Poor neighborhoods where these two African-American boys lived don’t speak well of America’s war on poverty. Drugs, murders, and all kinds of inequities generate despair in the “projects.” Both boys grew up without fathers; the author’s died of a rare virus, and the other Wes’s father was just absent, drowning his despair in liquor. The author’s mother completed college, but the other Wes’s mother, accepted by Johns Hopkins University, was denied college aid, despite her Associate Degree from Community College of Baltimore. It’s difficult to determine why their two roads led to different outcomes, but poverty surely influenced the other Wes’s early decision to become a lookout for drug dealers that earned him good money. His first high from using was exhilarating and made “him forget everything else.” [62]

The Valley Forge Military Academy in Wayne, PA, became a turning point for the author, where his mother enrolled him because of bad grades and skipping classes. . He tried to escape, but got lost and returned chagrined. His Sergeant Austin and Cadet Captain Ty Hill taught him that people really cared about him . [115]

It cannot be said the other Wes didn’t try; he returned to high school after a juvenile detention, was reading at a college sophomore level, later tried Job Corps, and became a carpenter, but he couldn’t earn enough to support his families. The author says, “The chilling truth is that…(the other Wes’s) story could have been mine. The tragedy is that my story could have been his.” [xi and 179]

A “Call to Action” by Tavis Smiley and a forty-six page “Readers Guide” of nonprofits helping youngsters overcome adversity are included. Although moving from one Wes to the other is sometimes difficult to follow, it is a book that is difficult to put down.
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