Two thousand fifteen saw the publication of almost two dozen books of economics, finance and history that the thoughtful advisor might be well-advised to read; as is my wont, I offered capsule reviews of them in my newsletter, Nick Murray Interactive. (The archive is permanent, and always available to new subscribers.) Of them, these eight stand out on their own original and highly eclectic merits. In the order I encountered them, they are:
The Forgotten Depression: 1921, the Crash That Cured Itself by James Grant. The enormity of fiscal and monetary stimulus thrown by this country at the crisis of 2007-09 is entirely without precedent—and it bought us the slowest economic recovery ever. To the acerbic James Grant, this is no surprise, and he longs for the halcyon days of the business depression that followed the sudden end of World War I. The nascent Federal Reserve actually raised interest rates in the teeth of this massive deflation, and the fiscal authorities moved—if you can even believe this—to balance the budget. There was no stimulus—indeed, no intervention of any kind—leaving wages and prices quickly to fall to market-clearing levels. The depression burned itself out in 18 months, to be followed by the unprecedented boom of the 1920s. Another reviewer called The Forgotten Depression “learned, beautifully written and timely.” You will call it a perfect delight.
The Moral Case for Fossil Fuels by Alex Epstein. There are over 7 billion human beings in the world. The International Energy Agency classifies 3 billion of these as not having “adequate electricity,” including 1.3 billion who have none at all. Yet for the past half-century, predictions of environmental disaster wreaked by fossil fuels, together with draconian proposals for cutting back their use, have held sway, despite the fact that none of these predictions have come true. Mr. Epstein asks, in this quietly devastating book, what our standard of value is. If it is the quality, not to say the sanctity, of human life, then the world needs more rather than less electricity. And the only way to generate sufficient electricity—once nuclear and hydro are off the table, as the environmental religion decrees that they must be—is by burning more fossil fuels. (Of course, if human life is not our standard of value, then we are left to wonder what is.) The reader will find this book a profoundly moral exercise.
Target Tokyo: Jimmy Doolittle and the Raid That Avenged Pearl Harbor by James M. Scott. Even as we mark the 70th anniversary of the end of WWII, and that generation of citizen soldiers passes away, the literature of the war continues to add spectacular books. This first account of the Doolittle Raid that can be termed definitive is a case in point (as, I suspect, will be Antony Beevor’s forthcoming book on the Battle of the Bulge). Mr. Scott has not merely rendered the most detailed and authoritative account of the men and the mission, but has developed as no one before a complete history of the aftermath, and the terrible reprisals carried out by the Japanese against the Chinese who aided the fliers. Only two of the 79 raiders remain with us, including Doolittle’s co-pilot, Richard Cole, who turned 100 on Labor Day. (My grandson Will Dickerson has his autograph, framed with a photo of their plane lifting off the deck of the USS Hornet.) Target Tokyo evokes the memory of these gallant Americans, all of whom volunteered for what they knew to be a one-way mission.
Misbehaving: The Making of Behavioral Economics by Richard Thaler. It is only in the last 40 years that we have come to realize that investor behavior rather than investment performance is the dominant determinant of real-life financial outcomes. In Misbehaving, the godfather of behavioral economics, Richard Thaler, takes us on that four-decade, epiphany-by-epiphany journey in an account that advisors will find even more spritely than scholarly. Along the way, we meet the other actors in this quest, including Daniel Kahneman, his late (and bitterly lamented) colleague Amos Tversky, and many of the lesser known but important contributors to the science. This is the best account of that development we will ever have, and a joy to read—because in addition to all his other sterling qualities, Professor Thaler turns out to be a genuinely funny guy.
Reagan: The Life by H. W. Brands. The two great presidents of the 20th century—intriguingly, from diametric opposite ends of the political/economic spectrum—are Franklin Roosevelt and Ronald Reagan. But it has taken a decade since Reagan’s passing for there to appear a rigorous, fair-minded one-volume biography. (Remember that the “official” biographer, the world-class Edmund Morris, was so confounded by the enigmatic Reagan that he produced the incomprehensibly bizarre Dutch: A Memoir.) It takes—as they say in Texas, where Professor Brands teaches at UT Austin—a lot of damn gall to subtitle this first effort of its kind the rather than a life, but he actually pulls it off. Nor does he neglect to give us an astonishingly good read: his chapter on Reagan and Gorbachev at Reykjavik is the most lucid I’ve read. FDR and Reagan were certainly opposed in their political philosophies. But they were alike in their supreme faith in America’s future, and that’s the quality that shines through this luminous biography.
Becoming Steve Jobs: The Evolution of a Reckless Upstart into a Visionary Leader by Brent Schlender and Rick Tetzeli. Walter Isaacson’s biography of Jobs—published within a month of its subject’s death—could hardly have been expected to be definitive, however much one admired it for its timeliness. And over time, it has become clear that no few people who were quite close to Jobs disagreed fundamentally with Isaacson’s half-genius, half-jerk characterization. Thus this new volume is most welcome. Based on the primary author’s quarter-century acquaintance with Jobs, its key idea is the first word of the title: to Schlender, Jobs was always in the process of becoming. The book does not absolve Jobs of his titanic faults, but portrays a person gradually but significantly growing out of many of them. It would have been fascinating to see how the man in full might have turned out.
The Conservative Heart: How to Build a Fairer, Happier and More Prosperous America by Arthur Brooks. Conservatives are seen (far too often by themselves) as advocating for such values as fiscal discipline and curbing the debt as ends in themselves—as austerity for its own sake, or to protect and advance the interests of the “rich.” Brooks, president of the American Enterprise Institute, would have us realize, and testify to the fact, that fiscal soundness is the only way to sustain the social safety net in the long run—otherwise we become Greece, or Detroit. Likewise we do not seek to curb soaring dependency on the state out of some animus against the poor. On the contrary, we seek to endow them with the dignity of productive work and self-sufficiency. Going into an election cycle in which the extreme left is already demonizing conservatives as insatiably greedy, hard-hearted and even racist, the thoughtful advisor will welcome this genuinely beautiful book.
America’s Bank: The Epic Struggle to Create the Federal Reserve by Roger Lowenstein. The idea of a central bank has always been anathema to a wide swath of Americans—and, albeit for different reasons than those espoused by Jefferson and especially Jackson, remains so today. Indeed, only the IRS is hated more than the Fed in public survey after survey. This helps explain why—operating without a central bank from the time Jackson killed it in 1837 until the coming of the Fed in 1913—the U.S. financial system was the worst species of emerging market chaos, long after we became the world’s largest economy. Roger Lowenstein—the early and most perceptive biographer of Buffett, and the chronicler of Long-Term Capital Management—brings to life in this new book the tortuous political and legislative path which culminated finally in endowing the United States with a lender of last resort. One wonders if the legislation which created an independent Federal Reserve could pass today—and doubts it. America’s Bank is a splendid book of economic history by a first-rate writer, with resonances in this morning’s headlines.
Honorable Mentions: Bethany McLean’s Shaky Ground, a startling report on the perilously undead Fannie Mae and Freddie Mac; David McCullough’s evocative and charming life of the Wright Brothers; John Tamny’s delightful Popular Economics: What the Rolling Stones, Downton Abbey and LeBron James Can Teach You About Economics; Greg Steinmetz’s fascinating and fast-moving The Richest Man Who Ever Lived: The Life and Times of Jacob Fugger; Morton Kondracke’s and Fred Barnes’s Jack Kemp: The Bleeding-Heart Conservative Who Changed America.
© 2015 Nick Murray. All rights reserved. Reprinted by permission. Nick reviews current books, articles and research findings in the “Resources” feature of his monthly newsletter, Nick Murray Interactive. To download the current sample issue, visit www.nickmurray.com and click on “Newsletter.”