Unintended Consequences: Why Everything You've Been Told About the Economy Is Wrong

Unintended Consequences: Why Everything You've Been Told About the Economy Is Wrong

by Edward Conard


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Unintended Consequences: Why Everything You've Been Told About the Economy Is Wrong by Edward Conard

Was our country’s economic success before the Crash of ‘08 built on false pretenses? Did we simply borrow and spend too much, or was something else really going on?

The conventional wisdom now accuses Wall Street and the mortgage industry of using predatory tactics to seduce homeowners. Meanwhile, average Americans are blamed for increasing consumption to unsustainable levels by borrowing recklessly. And the tax policies of the Reagan and Bush administrations are blamed for encouraging reckless risk-taking.

Edward Conard disagrees. In an attempt to set the record straight he presents a fascinating new case for how the economy really works, why the U.S. has outperformed other countries, what caused the financial crisis, and what improvements might better protect our economy without damaging growth.

Product Details

ISBN-13: 9781591846307
Publisher: Penguin Publishing Group
Publication date: 04/30/2013
Edition description: Reprint
Pages: 320
Sales rank: 1,213,408
Product dimensions: 5.40(w) x 8.40(h) x 1.00(d)
Age Range: 18 Years

About the Author

Edward "Ed" Conard is the author of the New York Times top-ten bestselling book, Unintended Consequences: Why Everything You've Been Told About the Economy Is Wrong (2012). He is a visiting scholar at the American Enterprise Institute. Previously, he was a founding partner of Bain Capital, where he worked closely with his friend and colleague, former presidential candidate Mitt Romney.
In May of 2012, Conard published Unintended Consequences: Why Everything You've Been Told About the Economy Is Wrong. The book was featured on the cover of the New York Times Sunday Magazine and went on to become a New York Times top ten non-fiction bestseller. Because of the publicity surrounding the publication of his book, Conard was the tenth most searched author on Google in 2012.
Since its publication, Mr. Conard has made over 100 television appearances in which he has debated leading economists including Paul Krugman, Joe Stiglitz, Alan Kruger, Austan Goolsbee, and Jared Bernstein; journalists including Jon Stewart, Fareed Zakaria, Chris Hayes, and Andrew Ross Sorkin; and politicians such as Barney Frank, Howard Dean, and Eliot Spitzer.
Prior to Bain Capital, Conard worked for Wasserstein Perella & Co., an investment bank that specialized in mergers and acquisitions, and Bain & Company, a management-consulting firm, where he led the firm's industrial practice.
Conard has a master of business administration degree from Harvard Business School and a bachelor of science degree in engineering from the University of Michigan.
For up-to-date information on Ed, visit the homepage: www.EdwardConard.com
Become a fan of Ed on Facebook www.facebook.com/EdwardConard
Follow Ed on Twitter www.twitter.com/EdwardConard
Connect with Ed on LinkedIn http://www.linkedin.com/in/EdwardConard/  

Table of Contents

Introduction 1

Part I What Went Right

1 A Brief History of the U.S. Economy 11

2 The Role of Investment 30

3 The Role of the Trade Deficit 52

4 The Role of Incentives 72

Part II What Went Wrong

5 The Role of Banks, Credit Rating Agencies, and Regulators 113

6 The Role of Short-Term Debt and Government Policy 158

Part III What Comes Next

7 Preventing Another Bank Run 195

8 Reducing Unemployment 219

9 Redistributing Income 254

Conclusion 275

Acknowledgments 287

Notes 289

Illustration Sources 301

Index 305

What People are Saying About This

From the Publisher

"Refreshing, at a time when so many take the failure of capitalism for granted, to read a bravado defense of the greatest force for wealth creation that the world has ever known."
—BRIAN CARNEY The Wall Street Journal

“Edward Conard’s book presents the most cogent and persuasive analysis of the financial crisis to date. It is deeper and likely more accurate than what we have seen so far from journalists, academics, and particularly former government officials.”
—ANDREI SHLEIFER, 1999 John Bates Clark Medal winner; Former Editor, Quarterly Journal of Economics; Professor of Economics, Harvard University

“Edward Conard’s keen business insight and sharp eye on economic forces explain structural strengths and weaknesses of the American economy. While some of his proposed solutions are controversial, the U.S. economy can recover its mojo if policy makers understand Conard’s diagnosis.”
—GLENN HUBBARD, Dean, Graduate School of Business, Columbia University; Former Chairman, President’s Council of Economic Advisers

“Edward Conard provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.”
—NOURIEL ROUBINI, Chairman, Roubini Global Economics

Unintended Consequences will be the most talked about economic book in 2012. When Ed Conard points the spotlight at recent economic history, his uncanny ability to cut through the confusion provides something totally unexpected: a fresh, nonpartisan perspective on what is right and wrong with America.”
—KEVIN HASSETT, Senior Fellow and Director of Economic Policy, American Enterprise Institute

“Edward Conard has written a provocative and important book about the economy that challenges conventional wisdom about the financial crisis, the trade deficit, government policy, and the path to prosperity. I hope policy makers and business leaders will pay close attention to Conard’s framework.”
—WILLIAM A. SAHLMAN, Senior Associate Dean, Harvard Business School

“Virtually everyone who reads Unintended Consequences will feel the pain of knowing that we may never get EVERYONE to read it. The clarity of Edward Conard’s explana­tion of where we are, how we got here, and what we do now is profound.”
—BILL BAIN, Founder, Bain & Company

“There are an amazing number of good ideas and interesting points made in this book. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.”
—STEVEN LEVITT, Coauthor of Freakonomics; 2004 John Bates Clark Medal Winner

“This is a wonderful book, filled with wisdom by a guy who really knows what he’s talking bout. It is a must reading for both businessmen and politicians.”
—JOHN C. WHITEHEAD, Former Chairman, Goldman Sachs & Co.; Former Deputy Secretary of State

"Conard's contrarian chapter on the benefits of low taxation for the rich is powerfully written. It should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved." —The New Republic

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Unintended Consequences: Why Everything You've Been Told about the Economy Is Wrong 3 out of 5 based on 0 ratings. 7 reviews.
merchiebum More than 1 year ago
Should be required reading for high level federal government officials. I gave it 4 stars only because, quite frankly: I didn't understand all of it. I'm sure Milton Friedman, if he were alive today, would highly recommend this book. I highly recommend it for anyone wanting to learn about economic reality as opposed to economic policy spin from Washington DC
Anonymous More than 1 year ago
What caused the financial crisis? How do we speed up recovery? And how do we, as a nation, avoid getting ourselves stuck in the traps we landed in during the 2008 financial crisis? Unintended Consequences is a fresh and different look at the U.S.'s economic woes. This is a great gift for anyone interested in the economy, growth and innovation, and best practices for helping the middle class and working poor.
Anonymous More than 1 year ago
If you would like to understand the context of Mitt Romney's "47%" statements this is the book for you.  It describes a set of beliefs that argues why wealthy capitalists should be richly rewarded for their accomplishments, and honored and supported by the remaining 99% for their  wealth. The book consists of 285 pages extolling the virtue and worth of wealthy capitalists/investors, explaining how any government "interference" is well-meaning but misguided, and extolling the benefits the "little people" would receive from supporting the wealthy.   I went "tilt" quite a bit. I found many of his examples/analysis misleading (companies are grand because they spend 70% of their take on labor, leaving only 30% for the capitalists; unfortunately, the cited labor percentage includes the massive renumeration for the top executives who, after all, are "labor" as much as any minimum-wage front-line employee in this accounting.) The book is full of such statements which are open to challenge. An example of the author's mindset from page 276 "A shortage of talent exists, in part, because a large number of college graduates refuse to take the risk and responsibility necessary to bring unrealized investment opportunities to fruition. Art history and Elizabethan poetry don't employ workers; the arduous and tedious application of businesses sciences such as computer programming and accounting does. ..For the sake of those less fortunate, we must persuade our vast supply of underutilized talent that they have amoral obligation to lead and innovate." Pretty much sums up the tone of the book.I was hoping for a conservative view of  our economy's performance over the past decade or so. Instead I read an apologia for a second Gilded Age.  Don't waste your time with this book; buy/read something from a conservative economist such as Thomas Sowell instead. And I write this review as a staunch capitalist. 
Anonymous More than 1 year ago
Anonymous More than 1 year ago
Greyhound-Dad More than 1 year ago
I tried: I really tried to read Mr. Conard's book, but I was unable to follow his logic. I suppose as a Ph.D. I am more accustomed to reading research papers that provide cites for fact statements or emphirical evidence to justify a conclusion. However, Mr. Conard wrote in a style I would attribute more to Rush Limbaugh and I found his arguments less than convincing. I really am trying to understand the Republican positions on the economy, but this book only muddied the water in my opinion.
zenman More than 1 year ago
To be honest I have not read this book yet. But based on the second bullet point I question either his knowledge of the circumstances of the housing bubble or his desire to discuss it accurately. Most of the "predatory lenders" took mortgages with little or no down payment because the days of the originating lender keeping the loans had passed. Instead, they quickly sold the mortgage to a Wall Street firm to be packaged as a bond and sold for profits to investors. There was no risk to the original lender, all he had to do is make the deal, sell it to someone else and make a nice commission.This is precisely why there was such a huge jump in sub-prime, Alt-A, low-doc and ninja mortgages that made the housing bubble grow and then pop. I question the credibility of anyone writing authoritatively on this subject. who appears not to be aware of this fact.