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Nilesh Jasani's Reviews > MegaThreats: Ten Dangerous Trends That Imperil Our Future, And How to Survive Them
MegaThreats: Ten Dangerous Trends That Imperil Our Future, And How to Survive Them
by
MegaThreats fails on multiple counts. Let's ignore that the count to ten is artificial when the first six risks are so intertwined that they could have been counted as one or two without the fine separation. We will return to these six, the best part of the book, later.
The last four non-economic sections are particularly weak, full of oft-heard remarks, and without anything original. The book fully lives up to its reputation for offering no tangible ways out of its doomsday scenarios, which is fine given its well-publicized intentions. It is still not just hopelessly damaging but also misleading. The low point of the book is when the author tries to translate such dire predictions for humanity into an investment strategy in financial markets; it is almost like he has nothing to suggest on how to avert the worst in real life, but he can help you protect your savings!
The economic sections of the first half are where the author is on the home turf. Financial market participants have long given up discussing the risks posed by excessive fiscal profligacy. These risks are exacerbated by monetary adventures, worsening inequality, demographics, populist pressures, and financial market reflexivities. The author is one of many who have read their economic history well to discuss these risks. He excels in his discussions of debt, while his prose is weakest when he begins discussing almost randomly selected historic episodes to support his fears. Rather than repeating descriptions of specific market or economic collapses of the past, the author could have done so much more to separate distinct types of risks, their potential severities, and what could trigger them.
Excessive debt can lead to cyclical downturns, but these are not dangerous if the leverage allows an economy to be on a much better structural path. No one enjoys market or economic downturns. However, if recessions like 2001-03 or 2008 are the price of leading the world in innovation or market return, most long-term theorists would take them any day over any other form of economic setup. The same argument could be made about China's choices so far. That said, if the arguments are for longer, structural decline like that experienced by Japan since the late 1980s or like the US in the 1930s/70s, the text and the logic should have been different.
Those in the habit of constantly evaluating history comprehensively miss how much the world of policymaking has changed, and hence why some of the past warning signs have not worked for years. Think of it this way: a thousand years ago, a voyager planning a journey seven seas across had to plan theoretically months in advance. With all the real-time information, a modern traveler hardly goes to the proverbial drawing board or prepares by the book, focusing instead on avoiding the nearest hazards and traffic while moving toward the destination.
In the world of scant information, a policymaker had to use the support of theoretical frameworks to manage an economy. The modern world allows current policymakers to abandon the rigid straightjacket of textbook theories and steer practically based on data points they see. Economic critics, almost always belonging to various theoretical schools, find framework-less policymaking abhorrent. Not only would each one find some policies inconsistent with their favorite theoretical formulas, but they also struggle to fathom long-term effects and even consistent near-term rationales. Today's policymakers appear capricious and short-sighted to the devotees of Keynes, Friedman, or any other similar great economic thinkers.
For nearly forty years, and notwithstanding many market and economic cycles, markets and economies have avoided prolonged downturns in most countries with proactive, data-driven monetary policymakers. This is not to say that an insidious downturn is not around the corner, but those predicting it need to make their case differently than merely signaling excessive levels in some economic parameters or drawing historical analogies. Given the author's reputation and past work, he must have a lot on why now and how worse it will be, but he missed them entirely in this work. That's all the worse for the book.
by
MegaThreats fails on multiple counts. Let's ignore that the count to ten is artificial when the first six risks are so intertwined that they could have been counted as one or two without the fine separation. We will return to these six, the best part of the book, later.
The last four non-economic sections are particularly weak, full of oft-heard remarks, and without anything original. The book fully lives up to its reputation for offering no tangible ways out of its doomsday scenarios, which is fine given its well-publicized intentions. It is still not just hopelessly damaging but also misleading. The low point of the book is when the author tries to translate such dire predictions for humanity into an investment strategy in financial markets; it is almost like he has nothing to suggest on how to avert the worst in real life, but he can help you protect your savings!
The economic sections of the first half are where the author is on the home turf. Financial market participants have long given up discussing the risks posed by excessive fiscal profligacy. These risks are exacerbated by monetary adventures, worsening inequality, demographics, populist pressures, and financial market reflexivities. The author is one of many who have read their economic history well to discuss these risks. He excels in his discussions of debt, while his prose is weakest when he begins discussing almost randomly selected historic episodes to support his fears. Rather than repeating descriptions of specific market or economic collapses of the past, the author could have done so much more to separate distinct types of risks, their potential severities, and what could trigger them.
Excessive debt can lead to cyclical downturns, but these are not dangerous if the leverage allows an economy to be on a much better structural path. No one enjoys market or economic downturns. However, if recessions like 2001-03 or 2008 are the price of leading the world in innovation or market return, most long-term theorists would take them any day over any other form of economic setup. The same argument could be made about China's choices so far. That said, if the arguments are for longer, structural decline like that experienced by Japan since the late 1980s or like the US in the 1930s/70s, the text and the logic should have been different.
Those in the habit of constantly evaluating history comprehensively miss how much the world of policymaking has changed, and hence why some of the past warning signs have not worked for years. Think of it this way: a thousand years ago, a voyager planning a journey seven seas across had to plan theoretically months in advance. With all the real-time information, a modern traveler hardly goes to the proverbial drawing board or prepares by the book, focusing instead on avoiding the nearest hazards and traffic while moving toward the destination.
In the world of scant information, a policymaker had to use the support of theoretical frameworks to manage an economy. The modern world allows current policymakers to abandon the rigid straightjacket of textbook theories and steer practically based on data points they see. Economic critics, almost always belonging to various theoretical schools, find framework-less policymaking abhorrent. Not only would each one find some policies inconsistent with their favorite theoretical formulas, but they also struggle to fathom long-term effects and even consistent near-term rationales. Today's policymakers appear capricious and short-sighted to the devotees of Keynes, Friedman, or any other similar great economic thinkers.
For nearly forty years, and notwithstanding many market and economic cycles, markets and economies have avoided prolonged downturns in most countries with proactive, data-driven monetary policymakers. This is not to say that an insidious downturn is not around the corner, but those predicting it need to make their case differently than merely signaling excessive levels in some economic parameters or drawing historical analogies. Given the author's reputation and past work, he must have a lot on why now and how worse it will be, but he missed them entirely in this work. That's all the worse for the book.
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Reading Progress
February 18, 2023
–
Started Reading
February 21, 2023
– Shelved
February 21, 2023
– Shelved as:
economic-and-finance
February 21, 2023
–
Finished Reading
