Expanding interest

It appears to be rather obvious that a lot of people are not buying into the recovery argument. I was surprised to learn today that six months after its release, The Return of the Great Depression is the #6#3 bestselling Kindle book in the Economics category and #37#10 in Business & Investing. That’s not bad at all for a book that has not been reviewed in a single mainstream news, business, or economics publication. And, much to my surprise, at $1.99 it’s not even the least expensive in the top ten as the Economic Report of the President by Council of Economic Advisers is free.

UPDATE: It would appear InstaPundit is the culprit. Thanks, Glenn!

Second run

I heard from my editor at WND Books yesterday. It seems that RGD has been “doing very well” and is going into its second print run. I don’t know if I’ll have a chance to correct the errata or not, but I have requested the opportunity to do so. I would like to thank all of you who supported that first foray into writing about economics.

Another RGD error

GL spots a problem on page 70:

“The unemployment rate is the third major statistic that is considered to be fundamentally unreliable, and like the previous two it is closely watched by politicians, economists, and Wall Street. Like GDP and CPI, it is an estimate, though it is theoretically a little less difficult to estimate due to the obvious fact that there are far more economic actions and goods being sold than there are people in a national economy, so the challenge of figuring out how many of those people are working is somewhat reduced. This does not mean that it is difficult, though, since the definition of employment can vary greatly from one individual to the next.”

The last sentence should read: “This does not mean that it is not difficult….” I appreciate the correction. Those inclined to a critical perspective should feel free to commence arguing how this proves that every economic prediction in the book is false, Keynes and Friedman were both correct, Ben Bernanke saved Western civilization, now is the right time to invest in equities, and the global economy has recovered.

RGD: a rather good review

An academic economist reviews RGD:

The book is simply a brilliant masterpiece. It is written remarkably well and gets you to read more and more. It provides a balanced mix between telling a story and zooming in on the economic fundamentals. Right from the very beginning, it becomes perfectly clear to the cognoscenti that Vox is a member of a small, ultra-elite club that has figured out the fundamental flaws of our modern-day Keynesian economic dogma, as well as the finest points of the Austrian school that only few people in the world are familiar with and understand. As an Austrian myself, it is easy to see how sophisticated Vox is in the area.

I am a professor in Economics who has been trained in and disillusioned from the mainstream economics. As an economist, I was completely reborn when I became an Austrian 7-8 years ago. Ever since, I have been teaching economics and finance mostly as an Austrian. During the Spring semester of 2008, I was teaching a course on the Financial Crisis at the American University in Bulgaria. My biggest regret is that I did not have at that time available to use Vox’s book for my course. It would have been perfect. The book may be somewhat difficult for first year Econ 101, but it is absolutely perfect for juniors and seniors – it could well be the book that will make them rethink their mainstream economics foundations. For my course, I had to use Peter Schiff’s “Crash Proof” as the very best available at the time. If I had to do it today again, I would use “The Return of the Great Depression” as my primary book. When combined with “Crash Proof”, it provides a killer combination that would open the eyes to any student willing to read. My third choice would be, without doubt, “Meltdown” by Thomas Woods.

Enough praising Vox and his book. Do not hesitate to get your copy and read it – I guarantee that you would be glad you did it.

This is without a doubt the best book review I have ever received from Bulgaria. Possibly the most interesting thing about Dr. Petrov’s review is that I happen to know he does not agree with me on the most important question of the day, inflation vs deflation. But, as I have said many times in writing about the issue, including in RGD, there are very smart and informed individuals on both sides of the issue and it is only the less sophisticated observers who think that the issue is simple enough to be critical of the other side for the way they interpret the available evidence. While I think that evidence of the last fifteen months has tended to favor the deflationary scenario, I don’t regard the matter as settled. And I certainly don’t think any less of excellent economic observers such as Marc Faber, Jim Rogers, Peter Schiff, the Mogambo Guru, or Dr. Petrov due to their expectation of a Whiskey Zulu situation.

Economics is a complex science wherein the timing remains an art. This means everyone gets something wrong sooner or later; even when you have interpreted all the evidence correctly you can still get the timing fatally wrong. I very much appreciate Dr. Petrov’s review, as it is great to see academics who have opened their minds to Austrian School economic theory. But, to return to the inflation/deflation matter, this chart on the diminishing marginal utility of debt nicely illustrates why I fall on the deflationary side and why I am confident that we are still in the early stages of the Great Depression 2.0.

Return of the Great Depression blog

One of the things I have wanted to do since the release of the book is to turn the RGD book site into a bona fide economic resource. However, I simply have not had the bandwidth. A number of people responded to my inquiry last month, and I selected two of them to act as my associate bloggers there.

Sam will be focused on Europe, Asia, and the Middle East. He has a great initial post on why the current economic crisis has not hit Israel as hard as might be expected. He’ll be paying particularly close attention to the Greek situation and to the Irish and Spanish reports since it’s looking like one of those three nations will be the flashpoint in the next round of European debt-deflation. But don’t count out China either….

Carlton will be focused on the USA and keeping abreast of the economic release schedule, particularly as it relates to significant indicators such as debt, New Orders, housing prices, and sales tax revenues. His introductory post is on the FDIC. The goal is to have daily updates on various economic statistics, but focused on those measures that I believe to be more significant and less susceptible to manipulation for political purposes. In keeping with this goal, I’ve added my own post showing annual GDP growth charted against total commercial bank loan growth from 1947 to 2010.

Any comments or suggestions for further improvements would be welcome.

That’s a negative?

This is one of the more positive two-star reviews I’ve ever happened to see:

Overall, Mr Day’s book is too detailed, verbose, and essentially reads too much like an academic level text. Good points made at the end of his book could have been arrived at in fewer pages. This book would do well in a graduate level econ. class.

It’s true, the points made at the end actually don’t require most of the preceding chapters because it’s not necessary to understand the rival economic theories in order to understand the range of forecasts by various economists and the policies that I recommend. RGD is a book about economic theory and recent economic history more than it is one dedicated to practical policy measures. As for it being too detailed and verbose, to paraphrase the immortal words of Cecil Vyse, I can only plead guilty to it being such a book.

Anyhow, as a Japanese reviewer concludes, it’s a pretty good value even so: “I just want to add that the Kindle version is currently $1.59, which is about the price of a 20oz soda. Needless to say, this was the best $1.59 I have spent since gas was less than a dollar a gallon.”

The tide rolls out

The pace of credit contraction continued to increase according to the first February report.  Nearly $100 billion in bank loans were paid off, pulled, or defaulted in January.  At 1.42% of the total, this increases the estimated 2010 contraction from 10% to 15%, more than twice as much as the 2009 record.  This is a new chart going back to 1947, in order to better show the unprecedented nature of the ongoing loan shrinkage.  Keen observers may note that on this larger chart, 1975 does not show up as a negative credit year as it did in the previously displayed 1973-present graphs.  This is because the 1973+ numbers are weekly, while the 1947+ numbers are monthly.  This was enough to change what was a 0.9% contraction into 0.2% growth.  If you’re interested in understanding more about the significance of these credit statistics, The Vulture Lurks has a new review of RGD up:

The book is eminently readable, even for those lacking economics training. Vox was able to describe the economic mess in which we find ourselves, the steps that got us into that mess in the first place, and the likelihood that the steps currently being taken by our ruling class will exacerbate the situation, in terminology that wasn’t overwhelming. This book is understandable by ANYONE, regardless of economic background, prior study, or existing expertise. I consider this to be quite an accomplishment on Vox’s part.

Also, in what would appear to be the first review from Malaysia, GKE has a recommendation up on Amazon:  I recommend this book for anyone interesting in a non-simplistic, but readable analysis of the current economic situation. I should also mention that I bought this book for Kindle and the price was perfect for a digital book.”

Blogtalk interview

Avi Davis and I committed science on the lingering economic problems of the United States at Western Word Radio.

And speaking of those problems, Elusive Wapiti reviews RGD on Amazon:

Day’s book starts off with a description of Tokyo in its late 1980’s heyday, before the boom went bust and the nation some thought would rule the world has suffered from nearly twenty years of flat economic growth and stagnation. And Japan’s “lost decades” is an apt metaphor for what Day thinks is in store for America, and indeed, most of the world. Day illustrates the inevitability of credit-fuelled investment booms turning to bust, how the tools used to control the economy are crude, clumsily used, and ineffectual approximations, how it is de rigeur for a central bank with monopoly over the money supply to inflate, inflate, inflate, how stimulus is but more fuel on the bubble-bust fire, and how much further we have to fall today, given the stratospheric heights we’ve climbed to in successive investment booms, than our forebears did in Great Depression 1. In all, it makes for a sobering read.

Mailvox: “You are my Dawkins”

Samuel J. Scott reviews RGD:

The aver­age reader could prob­a­bly be for­given for pass­ing Vox Day’s “The Return of the Great Depres­sion” with­out giv­ing it a sec­ond thought. After all, the author is a weekly colum­nist for World­Net­Daily, a far-right, news web­site that is as biased as it is sen­sa­tion­al­is­tic.

But the reader would be miss­ing one of the poten­tially most-important eco­nomic reviews in recent times.

Con­trary to what some might have pre­dicted from a writer for WND, Day’s sec­ond non-fiction book — the first was his cri­tique of the so-called “New Athe­ism” of Richard Dawkins, Sam Har­ris, and Christo­pher Hitchens in “The Irra­tional Athe­ist” — is not a polemic in favor of end­ing the Fed­eral Reserve, return­ing to the gold stan­dard, or other such issues that dom­i­nate among fringe con­ser­v­a­tives and lib­er­tar­i­ans. Rather, it is largely a cold, ratio­nal, even-handed assess­ment of the eco­nomic his­tory of the past twenty years from the rise of Japan in the late 1980s to the finan­cial tur­moil of today.

Beware of spoilers! Chris Bechtloff posts reviews Summa Elvetica:

Could not put it down. This is one of the best fantasy books I have read in a while.

And finally, Mr. B.A.D. takes me to task for sticking to the literary formats:

To be blunt, you and your buddies are intellectual snobs. Which is fine if all you ever want to do with your great think tank is circle jerk each other about how much smarter you are than the dummies who are running the world.

However if you aspire to make the world a better place with your great minds, which is the only choice of use in a great mind that does not result in total waste, you ought to learn the value of the idiot. The key element of my favorite movie of all time, Conan the Barbarian, is that Will alone is the true power behind anything. Once you have the will of the mob, who are all idiots, you have the means to change the world. This is why Hitler’s number 2 guy was in charge of propaganda, this is why transformers 2 was a box office hit, this is why those red handed atheists found it easier to just kill people than change their minds, this is why Liberals pander to the poor and welfare crowd, and this is why you ought to format your great thoughts and books into something the idiot can enjoy/ comprehend: Documentaries with pretty colors, animations, zingy noises, and humor.

Now I’m no idiot on an all inclusive scale, but I am a far cry from you and your friends in mental capacity. I’ve never had an actual IQ test but…..I scored 136 on one of those Internet tests 8 years ago. I drank a lot back then, and have since enrolled in college. I bet I can squeak in the last few points on a real IQ test and qualify as a genius. I’ll wait till you stop laughing….

Now, my only point was that I am more intelligent than the average human, and I feel I was able to comprehend your books, but they certainly gave my brain a stretch. I am certainly not as sharp as you, and lack the ability to see through the multiple layers of BS spoon fed us by the media each day. In a way you can say that I am the Christian version of the atheists who take science and the unholy trinity as gospel truth, except you are my Dawkins. I do not have the capacity to see the big picture the way you do, nor the reasoning ability to weigh what is bullshit and what is not. On the grand scale I’d actually be on the same level as Dawkins intellectually, I can remember facts, and reason fairly well, but not as well as I think I can, and probably have huge gaps in my logic. Watch Dog of the big picture being your gift, you should use it in a manner that will benefit all, not just the intellectual elites that your blog caters to. If your books were at the far end of my ability, than the people I run across on a daily basis who are barely literate have no hope of grasping the vital truths that you are shining a light upon. So please, draft up some cartoon characters, saddle up with your power point, and put something together for a limited theatrical release with a broad DVD release. If the Lord was able to pass down his higher thoughts to us, than I’m sure you can figure a way to do something similar.

I am his what? Anyhow, I suppose the criticism is not entirely invalid. I have been looking into putting together some sort of bi-monthly YouTube deal with the intention of permitting those who prefer video to follow some of the economic matters I’m writing about. However, it’s important to keep in mind that some subjects can only be dumbed down so far. I mean, if someone genuinely cannot understand that 8.3% annual credit growth over the same time period as 3% annual GDP growth means that the increase in GDP is wholly dependent upon increasing credit, or grasp the significance of what it means when that 8.3% credit growth is replaced by a 6% contraction even when I point it out to him, then there’s really not a whole lot I can do even if I spell everything out with pretty pictures and monosyllabic words.

Of course, Mr. B.A.D. also has to keep in mind that I simply don’t care all that much about the rest of the world except for my desire to stay away from it. I tend to follow my intellectual interests as they happen to evolve; I’m certainly not attempting to save Man from himself.

And returning the subject to RGD, those who have read it should be amused by this inadvertant, but telling confession by Paul Krugman in today’s NYT column:

As you read the economic news, it will be important to remember, first of all, that blips — occasional good numbers, signifying nothing — are common even when the economy is, in fact, mired in a prolonged slump…. Such blips are often, in part, statistical illusions.

You don’t say…. In case you don’t understand the significance of what Krugman is saying here, it is a straightforward admission by a Neo-Keynesian Samuelsonite that macroeconomic statistics are insufficiently reliable for macroeconomic policy making. Which, of course, is the very point I was making in the chapter entitled “No One Knows Anything”.

Three book reviews

A new Summa Elvetica review by JS on Amazon:

In any other fantasy novel the question of whether elves have souls would be silly, but in Beale’s world it is profound question which has lasting repercussions. The question works because the medieval Roman Catholic Church is the one asking.  Most fantasy worlds have a facsimile of the Roman Catholic Church without the Roman and Catholic part. Outside of the addition of the RCC the fantasy world is very familiar to anyone who knows the genre. Tough, taciturn, stoic dwarfs and tall, beautiful, arrogant, magical elves live a world with orcs, goblins, lycanthropes, and demons. Beale succeeds in combing these elements into a lively and believable land.

Jason Clark reviews RGD on Amazon:

When considering the matter of how the world went into its economic meltdown people have many explanations, and many solutions.  In this informative and easily digested book, World Net Daily columnist, blogger and Austrian economist Vox Day applies his own expertise to analysing the problem and offering his solution.  Vox introduces us to the different economic schools that have weighed in on this issue, and details how their take on the matter generally fails to address the issue, and how their solutions will only make matters worse.

Bart Fuller reviews RGD on his blog, Liberty vs Leviathan and adds “It’s a most excellent book and joins Hazlitt and Bastiat on my short list of recommendations to friends wanting to learn about economics.”

This is a book for anyone and everyone wanting to make sense of the economic turmoil of the last two years.

One of my minor goals for 2010 will be to finish the sequel to Summa Elvetica. If I’m fortunate, it’s even possible that it might be published in 2010. But I’m not promising anything, as there are other projects which demand priority.