Not as Bad

My ongoing series reviewing the major books written on the economic crisis of 2008 has hit an important stride. Some pivotal books on the subject have been released, or are nearing release, and I think more of the mechanical causes of the crisis are finally being discussed. Former Treasury Secretary, Hank Paulson, has written On the Brink, and I will have the book completed and reviewed in the next day or two. Michael Lewis, the most highly acclaimed writer to address this topic so far, releases his work this week (and expectations are high, at least for this reviewer). But the subject of my review today, Brian Wesbury's It's Not as Bad as You Think: Why Capitalism Trumps Fear and the Economy Will Thrive also belongs in the list of the truly important books to come out on the subject. This book is deeply ideological, has already proven to be prescient beyond belief, and most significantly, contains a larger perspective on the future of our economy that many other books have not concerned themselves with at all. Wesbury is an important voice in the national conversation about the economic crisis of 2008. Unlike media talking heads, op-ed pundits, politicians, and most self-identified "authors", Wesbury actually runs money, which means he has skin in this game as it pertains to identifying what took place in 2008 and where things will go from here. That is not to say that the cadre of authors who have written about the crisis thus far are less credible; it is just to say that there are more impactful consequences for Wesbury if he gets something wrong than there is for most authors. The book's underlying theses are: (1) The government, not the free market, deserves the lion's share of the blame for the crisis of 2008; (2) The free market, not the government, will play the major role in the economic rebound we are going to experience; and (3) It is a shame people on the right and the left do not better understand and apply both points #1 and #2. My study of the 2008 crisis led me to agree with thesis #1 some time ago. At this point it is an incontestable conclusion for anyone doing more than a superficial glance at the events that led up to the crisis. Wesbury, though, takes a different approach than other conservative authors. Thomas Sowell rightly blames Uncle Sam for the insidious use of national housing policy to carve a social agenda. John Taylor, William Fleckenstein, Thomas Woods, and others have gone after different aspects of easy monetary policy for its role in the debacle (and all with complete legitimacy to their case). But what Wesbury focuses on more particularly (though he also joins Sowell in his harsh critique of the national housing policy which foolishly intoxicated Republican and Democratic leadership in our country the past couple of decades) is the utter disaster that was "mark-to-market" accounting. The role that mark-to-market (MTM) accounting requirements played in exasperating the crisis of 2008 is a somewhat technica

This book is an excellent read; easy to follow charts, language and analogies. I highly recommend reading this book in these tough economic times where we are trying to understand what's happening and what has happened, Mr. Wesbury puts in all in perspective and lays it out for us as readers, consumers and investors to understand, why..."It's Not As Bad As You Think", after you read his book. It's Not as Bad as You Think: Why Capitalism Trumps Fear and the Economy Will Thrive

Read this book if you own a business or care about being a successful long term investor. Wesbury makes a compelling argument that the future is far brighter than the apocalypse du jour naysayers would have you believe. Do yourself a favor and just read the book.

An excellent analysis of the recent downturn and recovery, and valuable information for investors going forward. If you are an investor and only read one book, this is it.

The "Buy and Hold" strategy of investing has taken a lot of hard knocks during the past year. If you are bullish on the domestic stock market long term and don't have the time or interest in following the daily gyrations of the DJIA, NASDAQ, S & P 500, etc., the "buy and hold" investment strategy is the only game out there for you. "Market timing" is for suckers. But, during the last year, the bears, short sellers, and market timers looked pretty smart. The bulls, who stayed invested in the market, were left high and dry with their "buy and hope" strategy. One year ago (November 2008), "buy and hold" investors couldn't find too many voices who were still beating the "buy and hold" drum. The lone voice in the wilderness was Brian Wesbury. Some heeded his advice and stayed all in, after hearing his arguments that the recent economic crisis was the "Panic of 2008," not the "Great Depression of 2008." All of the pain we experienced was self-inflicted, and could easily be remedied with minor changes to accounting rules, such as, for example, mark-to-market accounting. Instead, conservatives jettisoned their faith in free-market principles at the first sign of trouble, and liberals saw an opportunity to introduce government solutions. The result has been a longer, deeper recession. Fast forward one year later, Brian Wesbury has released his book, It's Not as Bad as you Think, which encapsulates the arguments behind his initial diagnosis of the economic crisis. But, this time around, his argument is bolstered by the "real events" of 2009, described as a V-shaped recovery in the stock market. Of course, we're not at 14K yet, but the domestic stock market has come a long way from the dark days of March 2009, when everyone saw black. Three things have helped this recovery: relaxation of the mark-to-market accounting rules, corporate profits, and easy Fed money. These three factors are not going away soon, and Wesbury indicates that future traumatic events, like the passage of a costly healthcare reform bill and higher taxes, have already been factored into the market. If you've been paying attention since March, you had the opportunity to make more than the bears and market timers, and you will continue to. According to Wesbury, the bears predicted this down market, but they did so for all the wrong reasons. His book, on the other hand, vindicates the "buy and hold" strategy, which is based on confidence in the productivity of the American people. In this way, it provides chicken soup for the long term investor's soul.