lk greer, writer
Author: Nicholas Shaxson
Do you ever wonder why there are so many billionaires and multi-millionaires in the U.S. and worldwide while prices of all essential items are significantly outpacing wage increases? Instead of the usual ranting about the topic, author Nicholas Shaxson takes on a large bite-sized piece of the puzzle in a book I consider to be a must read for anyone interested in financial investments.
To be clear, the book doesn’t give financial advice, but instead provides helpful information needed for every day people to understand the economic system and assess risk more accurately. Shaxson presents intriguing examples, historical information and several interesting tidbits along the way to keep the reader engaged.
The book is well-researched with more end notes per chapter than a reader could possibly need, over 55 pages of additional reading!
The title, The Finance Curse, may not mean much to many people. However, the author does a good job setting the table in his introduction. You know—tell the audience what you’re going to show them. Just a few of Shaxson’s documented examples of the financial curse include:
- Corporate Tax Havens. There is no correlation between economic growth of an area and the tax havens the area provides.
- Staggering increase in financial players compensation has led to a brain drain of professionals from other sectors that produce goods and growth and solve problems. High paying financial sector jobs lure smart people away from careers as doctors and engineers.
- Bankers’ financial policies lead to economic instability. When there is a boom in industries such as tech or oil and gas, the money flows out of the bank like Niagra Falls. Debt explodes. Then the inevitable crash, and credit becomes impossible to get, along with good paying jobs.
- The increase in financial players and the money they make has substantially reduced the influence of voters. Big money buys off politicians, eliminating accountability to voters.
- Corporate model is anti-community. The old model was for the corporations to make profits, provide good jobs and contribute taxes to allow government to provide important infrastructure services. Now the model is to maximize shareholder wealthy only.
Shaxson’s book provides a peek into how world economies have gotten to where we are today, and draws the direct line to the negative impacts on our daily lives. Despite everything, the author remains optimistic that we can turn this ship around and reduce the Finance Curse.
One lesson we can all take away from the book is a quote from Daniel Yakelovich in 1972 regarding making sure when we make decisions, set policy and measure success, we are considering enough factors.
“The first step is to measure whatever can be easily measured. This is OK as far as it goes. The second step is to disregard that which can’t be easily measured or give it an arbitrary quantitative value. This is artificial and misleading. The third step is to presume that what can’t be measured easily really isn’t important. This is blindness. The fourth step is to say that what can’t be easily measured really doesn’t exist. This is suicide.”
This is the kind of information you can’t easily glean from short internet posts. The analysis and examples will provide food for thought. You don’t have to agree with everything you read. I certainly don’t agree with everything in this book. However, the way Shaxson analyzes and supports his conclusions is well worth the read.
Go outside and read a book today!
LK Greer
