Review of The Sages: Warren Buffett, George Soros, Paul Volcker, and the Maelstrom of Markets (Hardcover)

This book on the "longest recession in postwar history," is made up of three biographical essays about three men who have lived this and previous economic disasters of recent times: Buffet, Soros, and Volcker. Warren Buffet and George Soros are consummate investors; Economist Paul Volcker is a crisis-solver - an inflation slayer, more graphically.

The author wants to understand from these VIPs how and why most experts failed, and only a few succeeded, to see the coming of this near-depression recession. Other experts like Paul Krugman have offered their explanations. What is new in this book is that Soros has warned of the gathering "'superbubble' in the 1990s (p. viii)." Buffet worried about financial excesses even earlier than Soros. Apparently close friendly and colleagues have known for a long time of Volcker's concerns about the states of the US and global economies, but the ex-Fed Chairman kept quiet because he did not want his worries to undermine the authority of his successor.

Why did these men see what many didn't see? - because they are not dogmatists; they are commonsense pragmatists. Instead of allowing blind fixation with quantitative idiocy of late, the three VIPs avoided dogma with high integrity and preparedness to accept mistakes and to move on with enthusiasm. History is part teacher and part cheerleader here. Volcker saw the strengths and weaknesses of Keynesian policy in dealing with the inflation of the 1965-1980. Soros and Buffet made billions of dollars in good and bad economic times. All three sages respect free markets, but they also understand that freedom has its limits. Ideal efficient markets assume a statistical person pursuing her/his self-interests (maximum satisfaction = utility). Unfortunately application of that model to real life is a folly, because financial markets play dice with other people's money.

If you like historical biographies, you will love this book. And there are new facts to learn. Did you know, for example, that Soros' Open Society organization is named after Karl Popper's book Open Society and Its Enemies (1945)"? Interesting stuff.

Amavilah, Author
Modeling Determinants of Income in Embedded Economies
ISBN: 1600210465

ISBN: 1600210465
Quotable Arthur Schopenhauer
ISBN: 9781430324959




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