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New books consider how money is made, invested and spent
REVIEWS BY RON WYNN With both corporate takeovers (think Rupert Murdoch and the Wall Street Journal) and the antics of the incredibly rich dominating the headlines these days, books on the economy are especially timely. Three new books delve into issues that could affect your net worth—and your peace of mind.
Think small
Mark J. Penn's Microtrends: The Small Forces Behind Tomorrow's Big Changes looks at the economy from the perspective of a cultural and political analyst. Besides being CEO of Burson-Marsteller, Penn served as a pollster to Bill Clinton; he is currently an advisor to such powerful types as Sen. Hillary Clinton and Microsoft chairman Bill Gates. Thus, he is in a position to anticipate not only major shifts in social and fiscal policy, but also smaller cultural changes. The many trends that Penn and co-author E. Kinney Zalesne identify as having significant future impact range from the potentially divisive (a sizable increase in the number of ex-convicts in the general population; a rise in the ranks of highly educated, connected and well-financed domestic terrorists and terrorist sympathizers) to the quirky (more left-handers, more office romances and more people eschewing the practice of sun-bathing). They encompass the curious (a surge in the number of 20-year-olds who knit; the increased popularity of archery) and the intriguing (growing numbers of Latino Protestants; second-home buyers). Some readers might question some of Penn's other contentions, particularly that less-educated voters are becoming more issue-oriented and sophisticated than their supposedly smarter comrades or that anti-Semitism is declining. But as the person who identified "soccer moms" as a key constituency long before his rivals, Penn is not given to shallow analysis or premature conclusions. Microtrends is a book you'll return to often over the next few years to track the accuracy and validity of its predictions.
By Mark J. Penn Twelve, $25.99 448 pages ISBN 9780446580960
There's plenty of debate out there among people far more literate in science and economics than I regarding the merits of "neuroeconomics," including questions about whether it's one discipline or the other—or just another fancy term coined to codify otherwise unexplainable behavior. Since Jason Zweig has worked at various times for Time, Forbes and Money magazines, he knows how to simplify fiscal language and explain things in an interesting way, which makes Your Money and Your Brain: How The New Science of Neuroeconomics Can Help Make You Rich a lot more fun than it might sound. Suggestions for improving your money management behavior range from resisting exposure to such images as stock tickers and closing bells (they provoke pain in the brain) to avoiding decisions based solely on short-term rewards (too impulsive and indicative of a dangerous trend if repeated). Many of Zweig's recommendations would work for anyone regardless of genetic factors, so even those doubtful of the link between biology and finance can benefit from his advice. Your Money and Your Brain is consistently enjoyable and filled with fascinating facts that will make you pause before making another misguided investment decision.
By Jason Zweig Simon & Schuster, $26 352 pages ISBN 9780743276689
Lastly, we have All the Money in the World: How the Forbes 400 Make—and Spend—Their Fortunes, by journalists Peter W. Bernstein and Annalyn Swan. Published to coincide with the 25th anniversary of Forbes, the book clarifies the difference between those who have money (lots of actors and athletes) and those with genuine wealth (the 400 richest people in the world, according to the magazine). If knowing how the likes of Bill Gates and Warren Buffett garnered their fortunes and what they've done with their wealth appeals to you, the Bernstein/Swan team's exhaustive research will prove quite rewarding. All the Money in the World is one of the most detailed books you'll see, with a host of tables, sidebars, factoids, anecdotes and material. Depending on your politics, the fact that some of these people have lost more money in 25 years than many nations of the world could raise in triple that time might be amazing, interesting or appalling. This amalgam of lists, profiles and stories does humanize the Forbes 400, however, showing that even the ultra-wealthy make mistakes in judgment, have bad marriages, family feuds, unexpected setbacks and other problems. All the Money in the World is not just scholarly; it's also highly readable and provocative.
By Peter W. Bernstein and Annalyn Swan Knopf, $26.95 352 pages ISBN 9780307266125
Ron Wynn writes for the Nashville City Paper and other publications.
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The rich and famous