Unintended Consequences.

• Author: Sweeney, Paul
• Position: Unintended Consequences: Why Everything You've Been Told About the Economy is Wrong - Book review

By Edward Conard Portfolio / Penguin, 310 pages, $27.95

Author Edward Conard sets a high bar for himself in Unintended Consequences with the confident and self-assured subtitle "Why everything you've been told about the economy is wrong."

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In this polemical book, he aims to disclose the real reasons behind the financial crisis and challenge what he insists are "myths." He disputes, for example, the majority findings by the Financial Crisis Inquiry Commission early last year that certain reckless banking and financial practices, coupled with weak or non-existent regulation plus compromised rating agencies, were among the chief causes of the economic meltdown.

Unlike some conservative theoreticians, he does not deny that income inequality has been occurring. Instead, he embraces the chasm between the 1 percent and the 99 percent, and even seeks to refute the notion that the imbalance is unhealthy (During the Occupy Wall Street protests last fall, CNN News reported that, according to the Internal Revenue Service the top 1 percent of U.S. citizens earned $1.3 trillion in 2009, averaging $960,000 per year, and amounting to 17 percent of the income pie.)

Income inequality, he argues, results in surplus equity, which can be put to work by risk-taking entrepreneurs who will drive innovation. "The willingness to take risk is largely a function of wealth," he says. "Wealth and equity are the same thing." He also asserts: "The amount of equity, and its tolerance for risk, grows the economy."

Corporate efforts to move jobs offshore in search of cheaper labor while opening borders to immigrant labor back home also wins applause. More in sorrow than in anger, Conard castigates those who fret that such practices result in job tosses here in the U.S.

Unintended Consequences is chock full of such provocative interpretations and policy prescriptions. With the country's nerves frayed in a presidential election year and as demonstrators promise more heckling of Wall Street, this book by a former Wall Street financier--whose resume includes some 14 years (1993-2007) as a partner at Bain Capital, the public equity firm founded by his friend, former colleague and Republican presidential nominee Mitt Romney has already proven controversial.

In early May, Conard was featured in The New York Times Magazine as a "spectacularly...