Sunday, September 21, 2008

Summer Reading Report

Now that summer is officially over, it is time to go over my summer reading:

Starting with fiction, I ended up reading two very original novels. Oguz Atay’s Tutunamayanlar is truly an exceptional book, both with its satirical approach to post-Republic Turkish bourgeoisie and its revolutionary style. However, it is definitely not easy-reading and its depressive tone means that it may be the best choice under a hammock by the sea. Whereas the characters in Orhan Pamuk’s latest book Masumiyet Muzesi are melancholic if not depressed, the book is anything but: This bifurcation between the tone of the characters and the book as a whole was what kept me enchanted, and the typical brilliant set-up definitely helped. I am no literary critic, but as far as love stories go, this one sits at the very top along with other masterpieces like Love in the Time of Cholera. Oh, by the way, I found the opening and closing lines very moving, they also help you feel the cheerful tone of the novel.

As far as non-fiction goes, I ended up reading a variety of books with different audiences in mind and very different writing styles. Tim Hartford’s columns in the Financial Times, which have become one of the indispensable items of Saturday mornings for me, led me to read his two books: The Undercover Economist and The Logic of Life. While both books are extremely well-written, I was disappointed in several ways: First, while the books are a great introduction to a huge variety of Economics literature and more importantly the economist’s way of thinking, they contain almost nothing new to anyone who has majored in Economics as an undergraduate. However, since the author’s target reader is someone who would like to learn about Economics, I cannot blame him for not giving a literature review on his topics; the North Holland Handbook series and the Journal of Economics Perspectives are more appropriate for that purpose. However, I do have a more serious criticism: As anyone who has studied the dismal science would know, almost all the issues in Economics have are multi-faceted. Therefore, speeches (or even soliloquys) starting with “on one hand” and ending with “on the other” are common among economists- President Carter was aware of this when he famously asked for a one-handed economist. However, in both of his books, Tim Hartford always presents only one side of the issue he is tackling, and for someone new to Economics, a partial picture may be worse than having no picture at all.

Another disappointment of the summer was Mahfi Egilmez’s Hitit Ekonomisi (The Hittite Economy). Not that I did not get anything from the book; on the contrary, Egilmez provides many facts on the Hittite economy, all of which were new to me. But there is not much else; I was expecting to see at least some economic analysis and commentary rather than a laundry list of facts and facts. Being a big fan of the author’s book with Ercan Kumcu (Ekonomi Politikası: Teori ve Türkiye Uygulaması- Political Economy, Theory and Application to Turkey), I guess I was expecting something of similar caliber, which I didn’t get.

Last but not the least, I immersed myself on books on the financial crisis of the last couple of years. While the events of the past two weeks have revealed that there are many more pieces to this unfolding drama, books on the turmoil have started to appear. From a wide selection, I picked up The Gods That Failed: How Blind Faith in Markets Has Cost Us Our Future by Larry Elliott and Dan Atkinson, The Credit Crunch: Housing Bubbles, Globalisation and the Worldwide Economic Crisis by Graham Turner and The New Paradigm for Financial Markets: The Credit Crunch of 2008 and What It Means by George Soros. Elliott and Atkinson have written a very entertaining book with lots of anecdotes, while Turner has the most complete economic analysis of the three. Soros, on the other hand, applies his ideas from previous books to the ongoing turmoil, so there might not be much new if you are familiar with his earlier work. All these three books are playing the blame game: According to Elliott and Atkinson, it is the greedy bankers and investors, whereas Turner thinks it is free trade- incidentally, this is where he gets his theory messed up big time; according to him, “free trade today is no longer driven by comparative advantage, but the ability to maximize profits by cutting costs.” A really weak point of an otherwise informative book. Whereas both these two books put the blame on a certain group, Soros seems to wave his finger and say “I told you so, but you didn’t listen”- I am sorry George, but I still cannot make much of your reflexivity theory; I understand it all right, but I am not sure how to apply it. But maybe that’s why you make more money in a few minutes than I would do in a lifetime…

If you do not have much time to read all these books on the turmoil or if you are looking for an objective treatment of the events that led to the current mess until early this year rather than play the blame game, look no further (if you speak Turkish): Saruhan Ozel’s Global Dengezikliklerin Dengesi (The Balance of Global Imbalances) might be just what you are looking for: Ozel, Denizbank’s chief economist, has been following the economic and financial events unfold for the past few years and takes the readers as far back as the tech boom and the aftermath of September 11 to trace causes of the current problems. What you get is not only a brief and well-written summary of the last decade in the global economic and financial landscape, but also an introduction to the new financial instruments, BRICs less Brazil and last but not the least Turkey’s role in the new global landscape. It is this last part where my sole criticism of the book lies. While Ozel summarizes economic developments since the 2001 crisis well, he has got bogged down in detail in analyzing Turkey’s current account deficit. The issue is extremely important and definitely deserves discussion, but Ozel has been sidetracked from the many subtopics emanating from his analysis of the current account deficit so that his main points seem to get lost during the process. But the non-Turkey sections of the books are required reading for anyone who would like to get a crash course in understanding the world economy.

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