The Irwin Guide to Using The Wall Street Journal, 5th ed.

• Author: Dulaney, Robert W.

Reviewed by Robert W. Dulaney, cash and debt administrator of the City of Dallas, Texas, and member of GFOA's Committee on Cash Management.

As Michael B. Lehmann states in the preface, the objective of the book is to show the reader "how to use The Wall Street Journal to be your own economist." The book certainly succeeds in that objective by providing insight into interpreting the various economic data provided in The Journal and by helping the reader to understand the relationship between the various data and the business cycles. The reader in achieving this understanding will hopefully make better-informed business and investment decisions.

Lehmann begins with the big picture, describing the ever-repeating business cycles and their transformation during the 20th century. From the dramatic changes in the economy after World War I and the pre-Federal Reserve years, Lehmann provides the historical context leading to the formation of the Federal Reserve system and its use of monetary and fiscal policies, decade by decade, to form and shape the modern-day U.S. economy. In examining the post-World War II period, Lehmann introduces the effects of consumer demand, consumer prices, and inflation on the economy. As all economists must, he offers a treatise on the conflicting views of the monitarists who use the banking system to influence the economy, and the Keynesians, who rely on the government's ability to tax and spend, or fiscal policy, to fine tune the economy. His description of the high inflation and interest rates of the early 1980s, the Federal Reserve's policies to combat them, and the current low-inflation strategy of today make for fascinating reading. His assertion that inflation has been, and will continue to be, under control due to Federal Reserve policy is quite believable given the evidence and reasoning provided.

With the business-cycle environment thoroughly explained, Lehmann moves to a description of the investment vehicles available with easy-to-understand descriptions of the stock market, commodities and metals, and money market instruments. A chapter on long-term interest rates provides the perspective necessary for the official responsible for issuing long-term debt for a local governmental entity.

While a detailed examination of the business cycle and the various...