The August 2nd episode of BBC’s popular automotive show “Top Gear” included a segment in which two of the show’s hosts were assigned the job of creating an advertisement for a new car. Hilarious mayhem ensued. The car they had to create the ad for was the new VW Scirocco TDI, a diesel version of the sporty hatchback that won “Top Gear’s” car of the year award. (Sorry America, VW has no plans to sell the Scirocco in the US). The hosts, James and Jeremy, concluded that the car was indeed sporty, handled great, and got around really well. Plus, it got 55 mpg! Fantastic! Unfortunately, the engine was a real dog. The power band was too small and the gearbox didn’t match well with it. Their conclusion after driving it was that it was “a great car ruined by a canal boat motor. Never buy it.” Now they had to create a TV spot for it.

So how do you create an advertisement, and what is the advertising business like? Luke Sullivan’s Hey Whipple, Squeeze This gives a humorous inside look at the industry and how to create a great ad. The title comes from Sullivan’s years of despising Charmin’s lovable Mr. Whipple. He was featured in 504 different Charmin ads from 1964 to 1990 and, after knocking Scott Tissue paper out of the no. 1 spot, kept Charmin the market leader. Yet, he was irritating, wasn’t he? Compare him to all the great VW adds we’ve seen over the last 4 decades. Those are witty, fun, unobtrusive, and best of all, memorable. Neither campaign changed drastically over time, and neither needed to because they were effective. The difference is in how they got consumers to remember the product. Sullivan gives many fine examples of print and television ads that ran over the last 40 years and explains what made them work. He also describes his years in the business and what it was like working with so many other creative people all bouncing ideas off each other. He tells about some truly awful (unnamed) clients and the things they want an ad to do and some of the great clients that would grab an idea with gusto and run with it. Some people get it, some don’t. One of the things I really liked about the book is how much of Sullivan’s advice about both the idea of advertising and the business of advertising relate to any other business and even the way we live. We all like to smile and feel good about ourselves: That’s what an ad should do, and it’s something we can do at a personal level. The consumer isn’t stupid: An ad shouldn’t be demeaning towards anyone and neither should we as individuals or business people. Know what you’re talking about: Obviously.

I really enjoyed this book and I got a lot out of it. I took several graphic design courses in college and this book helped me (belatedly) figure out what I did wrong and how I could have made my work better. It also would have helped James and Jeremy. After numerous attempts that had me rolling on the floor laughing, they almost created some decent work. It was an ad for a VW, but it sure wasn’t a VW ad.

Recently I noticed that something like a hierarchy of Western currencies has developed. These are the Swiss franc at about ¢80, the US Dollar, the Euro at $1.35, and the British Pound at $1.55 or so. Those are where they are at today. Not long ago the Dollar was about equal to the Euro, and a Pound cost $2.00. Before World War I, the European countries used a gold standard to keep currencies at a steady and predictable value relative to other currencies. After WWI, they had to go off gold because their gold holdings were spent, in the US, to pay for the war. The US then had so much gold, that it was forced to tie its currency to gold. None of the major economies are on gold anymore; currency values are now sorted through market value based upon the supply and demand of the currencies. Of course, this is pretty much common knowledge, but in considering the current hierarchy and how it got there, I read John Kenneth Galbraith’s Money: Whence it Came, Where it Went.

One would be hard pressed to find a better biographer for money. Galbraith, who passed away in 2006, was an economic advisor in some capacity or another to all presidential administrations since FDR, usually maintaining a simultaneous teaching position at Harvard. He also authored 33 books, primarily on economics and economic history.

Money is a short history that begins with 4000 years ago with the first use of exchanging precious metals for goods; a quick dash through official Roman and Byzantine coinage; the 200 year era when tobacco was the major currency in North America; and ending with state of the US Dollar in 1975, when the book was written. Along the way, Galbraith explains how the incredible wealth in gold and silver from the New World changed the nature of European economics; how the Bank of England and the Banque de France developed out of less than upstanding finance schemes; the birth of the ‘greenback’ and the decade long debate about whether or not it was constitutionally permitted to issue a common currency. Galbraith also explains issues and controversies of Keynesian economics, the creation of the US Federal Reserve and how the Great Depression got so bad.

Most economics books are slow and boring: not this one. It’s a quick, easy and interesting read. Galbraith has a sharp sense of humor and expresses his contempt or adulation for others and/or their ideas. His belief that economics are culturally influenced adds to the interesting tales of peculiar money-oriented activities in mankind’s history. This book gives historical perspective to anyone interested in money.

This current economic recession, just like the ones that have preceded it, have a lot of people asking who’s fault it is and why it happened. Blame has been placed on the mortgage companies, the banks, the federal government, deregulation, homeowners who overspent, Wall Street traders, etc. A really big-picture view of the whole thing is just that, in a free-market economy, booms and busts are just going to happen. They will happen due to any number of indeterminate, ephemeral and fluky reasons.  These unpredictable reasons then cause a run, which devalues a market and money, or the valuation of something in terms of money, is lost. It’s a two-stage process: the initial reason followed by the run. But it is the run that makes the market fall. Think of it like seeing a bear in the woods. The instinct is to run away, but if you do that he will definitely chase you and tear you to bits; but if you stay still, the bear might pass you by.

The causes, consequences and stories of market runs since the 1987 crash are the subject of Michael Lewis’ Panic: The Story of Modern Financial Insanity. Lewis is the author of Liar’s Poker, a story of his days at Salomon Brothers and a contributor to the New York Times Magazine, Bloomberg and Slate. Panic is an anthology of news reports, interviews, editorials and articles previously published in The New York Times, The Economist, The Wall Street Journal, Fortune, Bloomberg News and other media. The authors of these pieces include Lewis himself, Paul Krugman, Joseph Stiglitz, Jeffrey Sachs, Robert J. Shiller and even humorist Dave Barry. The book is divided into 4 parts: Black Monday 1987; the Southeast Asian and Russian currency crises; the dot-com bust; and the sub-prime mortgage collapse. Unfortunately, Panic’s chronology ends just at the time Bear Stearns was collapsing. Still, the content provided by the previous two decades makes fascinating reading.

Part one of anthology begins with a July 1987 Time article describing the “wild bull market,” and is followed by an excerpt from Lewis’ Liar’s Poker that describes the insanity he saw on October 19th, Black Monday, at Salomon Brothers. The look back to that time is enlightening. I had just graduated from high school the previous June, and although I didn’t pay much attention to the crash itself, I do recall how the times suddenly changed, especially the job market. Part three, the dot-com days, is still fresh in my memory though. Anything Internet was always going to be the greatest thing. A March 2000 Barron’s article, however, listed hundreds of companies that would soon go bust. One that was expected to fail almost immediately was Marketwatch.com, now owned by the Wall Street Journal. Salon.com was soon to follow, as was Amazon.com. CDNow.com looked healthy, though; it is now owned by Amazon. Investors tried, but the truth is that nobody can predict the future. The dot.com crash sorted it out though.

Lewis’ retrospective on runs is like watching a stampede from a helicopter. Panic gives us the benefit of hindsight about some of the rationalized absurdity that causes a market to go amok. The sell-offs that happen when a market falls are perfectly rational at the time because free-markets are not collective or communal and thus every participant must protect himself. As Panic demonstrates, this is the way of things. Sometimes it’s merely a correction, but sometimes, when we run from the bear, it’s a collapse.

This book is an interesting read especially in these times, when the whole world is wondering, is the panic over… or are we just building up to the big one?