Debt Be Not Proud and Other Tenets of the World of Money

Economics, like math, is something most people rationalized they would never need to know after graduation. But with gas prices soaring, home values sinking, consumer debt rising and jobs vanishing, it is hard to deny that economics affects our daily lives and livelihoods. While pundits and presidential candidates kick around economic issues and possible solutions, five new books aspire to jump start your economic intelligence quotient.

WHATEVER HAPPENED TO THRIFT? Why Americans Don't Save And What to Do About It By Ronald Wilcox | Yale Univ. 159 pp. $40

Americans spend too much, leaving them ill-equipped to meet unforeseen needs, contends Ronald Wilcox, a professor of business administration. In Whatever Happened To Thrift?, Wilcox asserts that consumers overspend because they overestimate future wealth and obsess over keeping up with the Joneses. Wilcox ticks off shopworn fixes, such as a call for financial education, more aggressive retirement savings plans and personalized savings and investment advice, but omits ways to pay for these programs

Buried among Wilcox's proposals is his plan for a partial overhaul of Social Security. He would let low-paid workers divert some of their contributions to a stock mutual fund run by the federal government. He insists that participants would have no say in investment decisions and that operating rules would be more restrictive than those in private defined-contribution plans such as 401(k)s. He claims, "At death the current value of monies held in the account would enter the estate of the deceased." But what if these investments lose money? Wilcox concedes the possibility and states that at a minimum there would be "the potential for political pressure to bail them out." He never analyzes the implications of "diverting monies from a currently underfunded Social Security trust fund" to his untested privatized one.

SPEND 'TIL THE END The Revolutionary Guide to Raising Your Living Standard -- Today and When You Retire By Laurence J. Kotlikoff and Scott Burns | Simon & Schuster. 319 pp. $26

With a different view of spending, economics professor Laurence J. Kotlikoff and financial writer Scott Burns stress that what matters is not how much one spends but rather the standard of living that it enables. In their new book, Spend 'til the End, they argue that most people could achieve and sustain a higher standard of living throughout their lives.

This book's greatest contribution may be the inclusion of often overlooked topics, such as the timing of payouts and deductions. The authors analyze when, how and in what order to start taking payouts from various retirement savings plans, as well as when and whether to choose your own or spousal Social Security benefits. Making the wrong choice could significantly increase your tax bill and reduce the tax benefits of charitable contributions and other deductions now and for years -- or decades -- to come.

Another neglected topic they cover is the problem of outliving your money. Kotlikoff and Burns advocate making spending decisions based on the maximum age to which you might live, not the lower, average life expectancy that most financial planners use.

How can a consumer optimize his standard of living? Kotlikoff and Burns tout their software program "ESPlanner," which is available online for a fee. They claim that the late Nobel Prize-winning economist Franco Modigliani endorsed it. Whether their software lives up to the authors' promises is never proven. What is shown is that Kotlikoff "is president of the company and has a financial stake in the software."

SMART WOMEN DON'T RETIRE -- THEY BREAK FREE By the Transition Network and Gail Rentsch | Springboard. 256 pp. $24.99

Regardless of the standard of living they have achieved, retirement day will soon arrive for millions of Baby Boomers. For some, it will be a long-hoped-for beginning, surrounded by family, friends and fulfilling activities. But others will face retirement with trepidation, often alone and with few, if any, hobbies or friends outside the workplace. So there is a need for sound advice on making one's way through the coming decades of new choices.

In an attempt to fill the information void for boomer women, the Transition Network, which describes itself as a "nation-wide community of women who are creating exhilarating new transition possibilities," joined with Gail Rentsch to write Smart Women Don't Retire -- They Break Free. The book's layout is appealing, but the narrative is repetitive and meandering, with an overabundance of anecdotes. To its credit, the book addresses a growing problem that few acknowledge: Retirement can have a strongly negative impact on a previously happy marriage. Other topics that retirees need to know about, such as financial planning, are handled perfunctorily, if at all.

FLIP How to Turn Everything You Know On Its Head -- and Succeed Beyond Your Wildest Imaginings By Peter Sheahan | Morrow. 309 pp. $25.95

The number of middle-aged women and men who will need practical retirement advice will grow considerably faster if a brash, 28-year-old Australian business guru, Peter Sheahan, has his way. He argues that companies should replace older workers with 20-somethings, "Gen-Y's."

In FLIP, Sheahan claims to have "attracted clients" from such companies as Google, Apple, CocaCola and Fox. He admits that he is short on traditional experience or formal credentials and seems surprised to have found a publisher. Touting workers his age, Sheahan asserts that "a Gen-Y friendly workplace will be a talent-friendly workplace" and that managers who resist his push for youth are out of touch and will lose market share. But how friendly will this brave new workplace be to the appendage that often accompanies Gen-Y's: "hovering parents" who are about the same age as their kids' new managers?

Sheahan's "business fundamentals" include: 1) to get control, give it up; 2) to refine your plan and test your ideas, take bold action; 3) creative genius is almost always found on the lunatic fringe. He stops short, however, of resurrecting the 1960s mantra "Never trust anyone over 30."

Throughout this self-indulgent book, Sheahan stresses the role of a good story in selling products -- or even oneself. "Your job," he writes, "is to find out what your story is." After reading FLIP, this reviewer wondered: Is Sheahan a business prophet or just a gifted storyteller with a book deal?

BIOGRAPHY OF A DOLLAR How the Mighty Buck Conquered the World and Why It's Under Siege By Craig Karmin | Crown Business. 263 pp. $25.95

When good-paying jobs move offshore, imports outpace exports, and inflation rises, the resulting economic quakes are felt not just in the United States. Surveying the globe, financial writer Craig Karmin looks at the state of money in Biography of a Dollar.

For decades the United States has owned the world's dominant currency, but "at the start of the new millennium," Karmin writes, "it is hard to mistake signs that the dollar's unrivaled supremacy is in the early stages of inevitable decline." In this easy-to-digest historical travelogue, Karmin shows how the dollar dethroned the British pound sterling decades ago, then how the United States jettisoned the gold standard, relying solely on faith in the United States and paper money. He gives behind-the-scenes glimpses of a hedge fund and the workings of the Bureau of Engraving. He exposes the love-hate relationship that other countries have had with the dollar, as well as the potential dangers of too much U.S. debt being held by unfriendly nations. This book may not turn you into a currency trader but would make an interesting addition to your beach bag.

Nancy Lloyd is an economist, formerly with the Federal Reserve Board, and is the author of "Simple Money Solutions."