The Passionate Economist

This is an interesting account of the career of a successful business economist. Diane Swonk puts plenty of passion into her economics, which is great. She's a good writer. Her call for more accurate economic statistics is well taken. I like her definition of economics as "the study of collective human behavior." She states one of her purposes as educating armchair economists; as a biochemist and patent attorney by profession, I certainly feel I have learned something from her. The book's flaws are mostly in its assumptions. Ms. Swonk thrills to every tiny increase in GDP, but she never stops to ask what GDP really means. GDP by definition excludes any consideration of depletion of resources, costs of pollution, effects of population growth, or quality of life. GDP has its uses in making short-term business forecasts, but applying it more generally to say how the country's economy is going is questionable at best. More accurate measures of the U.S. economy, such as the Index of Sustainable Economic Welfare (ISEW), tend to show that the amount of true economic growth per capita since 1947 has been fairly small, and that there has been little or no real growth since 1980. It strikes me as odd, therefore, that Ms. Swonk believes so sincerely that increasing GDP is the key to improving our country's prosperity. Most people's sense of economic well-being depends greatly on whether they're better off than others, so that trying to improve people's lives by continually increasing GDP strikes me as a squirrel cage to nowhere. Ms. Swonk states that immigration is good for the economy, which I think is very questionable. Immigration may be good for business in the short term; in the long term it is simply subsidizing other countries by letting them export their population problems here. Ms. Swonk includes a push for more deregulation. I agree that deregulation is helpful in some instances, but where significant externalities exist deregulation is likely to make our country's economic situation worse. Ms. Swonk's discussion of her personal life seems to show the same blind spot. She details her struggles dealing with an asthmatic son, but it never crosses her mind that polluted air could be affecting him.

?The lines between economics and who I am are often blurred,? writes business economist, Diane Swonk; and indeed, this is contributes to the charm, readability, and usefulness of The Passionate Economist. But let me get back to that later.This book is of interest to business economists, and others, for at least two reasons. First, Swonk has had a successful career for almost two decades at Bank One in Chicago. Although the times were turbulent, she kept her same job and phone number through six chairmen and two mergers, she tells us. This book provides insight on how she did it and lessons for how we, in a highly competitive business world and tight job market, might do it. She advises us to ask the right questions, worry about how the world might change, and make economic analysis relevant for our firms. She describes how a successful economist operates?not just relying upon economic models, but using them in conjunction with other sources of information from clients, policy makers, and other economists. Use clients not only as customers but also as sources of industry information. Develop a deep pool of sources that can provide insights into economic policy issues and policy-making. Develop ties with the top economists in key industries and countries and draw upon their knowledge and information. Further, become an expert in the data, but use data with caution. Lay out a road map of where the economy will move next, what structural changes can be expected, and advise management so it won?t be surprised. She relates her experience forecasting the industrial Midwest economy and then the tactics she used to convince senior management of her views, ultimately influencing a change in the bank?s own strategy. She advises us to develop good rapport with the public relations person in our organizations. She also outlines her approach for getting her message across to the business press?among them, promptly return calls to press members and kick stories around with them (even if you aren?t a part of the story). All this helps in building relationships. She gives tips on how to become a good speaker?practice is essential, but the challenge is to connect with the audience; and she tells you how to do it.Secondly, the book serves as a useful review and analysis of economic events over the past two decades and provides insightful interpretations. The book covers the 1980s, when Swonk began her professional career, to the present. Chapters 9 through 16 provide a narrative of these decades. Among the events that she discusses are the early 1990s jobless recovery, changes in credit markets, the low inflation/high growth of the 1990s, the Asian financial crisis of 1997-98, the 1998 debt crisis in Russia and other countries, and the more recent U.S. asset bubble. She weaves in Fed policy actions through much of the narrative. Swonk compares the stock market crashes of 1929 and 1987 and demonstrates how they were not alike. She illustrates th

Swonk begins her story with the events of Septmeber 11, 2001, as she saw them from her perspective at the World Trade Center. Her story demonstrates her belief that economics is about much more than just about cold, hard numbers. Against the wishes of her family, she chose economics as a field and went on to become a star. As chief economist of Bank One, she is widely respected and a leader in her field. Well known as a public speaker, she has often appeared on television and her story is worth reading.

This is a great introduction for anyone who wants to better understand basic economic theory and why it matters to individuals. Swonk first talks about her own career and how she got involved in studying economics. Then, she offers insights into why people should understand Fed policy, interest rates and world economy. This book will help people better understand what they read in the financial press and make more informed investing choices.