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Rating: 
Summary: Botswana?
Review: After a series of ad hominem attacks a Reader from Washington, DC writes (below): "Her characterization of Botswana is a perfect example of the chasm in her own knowledge. It's very clear to the reader that Ms. Frank has no idea that Botswana has enjoyed the highest per capita growth rate of any country in the world over the last 35 years when she cites it as an example of a developing country that has suffered from poor economic choices by its government."
It is true that Botswana has a public sector debt equal to a mere 10 percent of its GDP. This is very low and it gives Botswana high marks with DCReader and the International Monetary Fund. But is that really a mark of a successful economy? Switzerland, the UK and the USA have debts exceeding 50% of their GDP. Canada has a debt almost equal to the GDP and Italy and France have debts exceeding the GDP. On the other hand the HIV rate in Botswana is 38.8% -- more than one person out of every 3 has HIV. President Festus Mogae (Botswana) issued a chilling warning last year that his AIDS-ravaged country faced extinction if it failed to slow the spread of the deadly virus.
Dr. Frank actually wrote: "The International Monetary Fund, increasingly regarded as a voice for financial interests throughout the world, routinely requires fiscal austerity plans from developing countries as a condition for receiving loans. The financial community's insistence that developing countries balance their national budgets has killed efforts to spur internal growth through public spending programs. In an article on the downgrade in Japan's bond-rating, the New York Times pointed out that Botswana has a public sector debt equal to a mere 10 percent of its GDP. The authors do not point out that the population of Botswana, decimated by AIDS, might be better off had their government utilized more of the country's resources on their behalf."
Rating:
Summary: Provocative and accessible
Review: Ellen Frank argues convincingly that economic policy has been hijacked by an economic elite who put protection of their own assets above other social goals like promoting jobs and protecting ordinary Americans from poor health, old age and unemployment. Unlike other books that focus on the outcomes of this political shift --growing inequality and so forth -- Frank's book details how the policy shift is sold via mind-numbingly confusing debates about technical financial issues -- federal debt,inflation, the value of the dollar. It is a very engaging, provacative and accessible book. The chapter on
the Fed and inflation alone is worth the price of admission.
Rating:
Summary: Pulling the curtain aside
Review: We all know that things are seldom what they seem. The earth is not flat. The sun does not move around the earth. The stars are not tiny pin pricks of light. The "solid wall" before us is almost entirely empty space. And that is just the physical world - how much more deceptive is the world we create - the world of stocks, money, debt and finance. What does it really mean to own something? Is money wealth? Would it still be wealth if there is nothing to sell? Is a stock certificate wealth? What about a house? Dr. Frank does an excellent job of explaining the difference between the money economy (the economy of money, stocks, mortgages and other paper) and the "real economy" (the economy of houses, bread and cabbages).It is no surprise that the people with some understanding of these things are robbing the rest of us blind. Trying to understand them is more than just idle curiosity - it is self-defense. Ellen Frank pulls the curtain aside and allows us to see what this human world is really like. "The Raw Deal" and William Greider's "Secrets of the Temple" should give every reader a fighting chance to keep her head above water. Dr. Frank gives an excellent summary in Chapter 1. I will simply add that the book more than lives up to the promise. In addition it is really quite readable and interesting. "Each of the following chapters is an attempt to dispel the myths and illusions surrounding money, financial markets, federal finances, the financial policies of the Federal Reserve, and the policies of global financial institutions. At each turn, we will examine the myths promulgated in the media, the policies these myths engender, and the real impact these policies have on ordinary wage- and salary earners. "Because the shifts in economic policy rest, to such a degree, on aligning the perceived interests of wage earners with financiers, chapter 2, will focus on the illusions surrounding the stock market and individual stock investing. Recent events shattered some, but not all, of those illusions. And recent corporate scandals have left Americans no less dependent on financial markets for funding retirement and higher education. I will argue that the stock market can never provide economic security for the majority. The problem is not simply that financial markets are volatile, or that they have been rigged by insiders. Rather, stocks and savings accounts provide middle-class households with no secure claim on the production of the real economy. "The politics of finance and money rest on a deliberate misrepresentation of government finances, fostering the belief that governments operate under restraints that are not, in fact, operative. Chapter 3 assesses the debates over federal borrowing, debt, and the prospects for Social Security. "The economic origins of our current impasse lie in the extraordinary power ceded to the Federal Reserve and other central banks in the 1980s and 1990s. Chapter 4 casts a critical eye on myths surrounding the conduct of monetary policy and the problem of inflation. "The economic consequences of the raw deal are today most evident in developing countries that, under the tutelage of the International Monetary Fund, geared their policies single-mindedly toward the protection of financial wealth. Chapter 5 looks at the role of the dollar in the world economy and the devastation that efforts to ensure the dollar wealth of international investors have wrought on the real economies of Asia and South America." Chapter 6 offers suggestions for how to move beyond financial myths and construct policies that sustain and share the real wealth of the economy."
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