Economic Puppetmasters
By Lawrence Lindsey
Hyperion, 2001 - 192 pages

Having left Wall Street over a year ago I still have a place in my heart for the financial markets.  I find that my focus in reading is increasingly turning towards history, the issue of worldwide standards of living and how economic growth in various parts of the world varies so dramatically.

Economic Puppetmasters by Lawrence Lindsey, the current economics advisor to the President, is an excellent book for those that are interested in (1) economics (2) the history of monetary policies in various economic areas such as Japan, Europe and the United States and finally, (3) the inextricable link between politics and the economy.

I was going to rank this book a solid four star book because it provided some really good analysis.  However, after thinking about it for a day or so, I am deducting a full star from the book (a three star ranking) due to the partisanship rhetoric and a complete lack of attention to the national debt. 

In my opinion the real value of this book is Lindsey’s explanation of why Japan has been in an economic funk for 10 + years.  Another element of excellent insight on his part is that he provides readers with an excellent explanation of the pros and cons of the Euro and difficulties that will likely occur in the next ten years from the establishment of such a central bank/currency.  The book provides readers with a great history lesson into various monetary regimes.

In my opinion Mr. Lindsey, like many financial authors, is HIGHLY deficient in one key area.  He never talks about the U.S. national debt and how it has gone from $960 billion to $5.6 trillion in a 23 year span.   For those doing the math, it is an 8% per year growth rate for the last 23 years!  The explosive growth in the national debt has caused growth rates to be overstated because they are unsustainable.  At the end of the day you have to pay interest on the debt and you have to repay the debt.  What about the fact that America will go from 7 working people per retiree to 2.5 within 20 years?  This will cause social benefits to soar with fewer workers to pay for it?  But Mr. Lindsey doesn’t feel this is important.  Instead he takes shots at previous administrations for their “deficient views.”  You can learn a good amount from reading the book but Mr. Lindsey and the rest of the politicians/economists disgust me because their desire to get re-elected is going to leave a nation bankrupt or heavily indebted within 20 years.  Nothing short of a tragedy.

He explains here how those who pull the world's economic strings make their decisions and shows how those decisions affect the world's and national economies. He suggests that there are systemic limits to the power of even key decision makers, and he argues that the decision-making systems in place today are ill suited to current needs. The decision makers Lindsey profiles are Alan Greenspan, chairman of the U.S. Federal Reserve Board; Eisuke Sakaibara, vice-minister of finance in Japan; Helmut Kohl, then chancellor of Germany; and financier and investor