There weren't a great many slam-dunk, must-read books in 2011, but the things that were good were very, very good. I'll cite four, and then add one more, specifically for the financial advisor's mind and soul. 

1 David Mamet is one of the most acclaimed playwrights, screenwriters and film directors of our time. He won a Pulitzer Prize for Glengarry Glen Ross, and has received Academy Award nominations twice, for The Verdict and Wag the Dog. He is now in his mid-sixties, and has said that he never met a conservative, nor was exposed to any conservative thought whatever, until about eight years ago. At that time, he met and began studying with Rabbi Mordecai Finley, who introduced him to the work of Friedrich Hayek, Thomas Sowell, Milton Friedman and others. Intellectually and even morally, Mamet was struck from his horse and blinded on the road to Damascus.

He recounts and explains his epiphany-that government "could tax or confiscate, but it could not allocate with greater justice than the Free Market"-in a brilliant new book, The Secret Knowledge: On the Dismantling of American Culture, which I believe every advisor, and indeed every American, should read. For his essential perception, that free-market capitalism is not merely more efficient than any form of statism but more just, is-together with the idea of one person, one vote-at the heart of genuine American exceptionalism.

Mamet is deadly accurate at skewering the ultimate emptiness of the stated goals of collectivism (what does it mean by "social justice;" what is enough "equality;" by what objective standard does one test "fairness"?). And he puts his finger on the progressives' insatiable appetite for more and larger government "programs" (if $800 billion in fiscal stimulus goes down the drain while unemployment keeps on rising, the problem can't be that Keynesian stimulus doesn't work, but that we need even more stimulus).

The Secret Knowledge is simply the most intellectually rigorous and emotionally compelling account of an economic and thence political awakening since Whittaker Chambers' classic Witness came out in 1952. 

2 You do not need to be a hopeless economics geek (like moi) to enjoy-and to benefit greatly from reading-Sylvia Nasar's new book Grand Pursuit: The Story of Economic Genius. (Ms. Nasar's only previously published book is A Beautiful Mind, the biography of the mathematician John Forbes Nash Jr. which became a brilliant, Academy Award-winning film.) Grand Pursuit is a survey course in the development of economic thought from the time of Dickens to the present day, related by means of exceptionally rich, nuanced portraits of the thinkers themselves.
Economics, said its modern father Alfred Marshall, is an "engine of analysis," and as Keynes put it, "an apparatus of the mind." But it is the personality as much as the theories of the leading lights to which Ms. Nasar is drawn, to marvelous effect. She is especially good on Marx (who deservedly comes off quite badly), Schumpeter and even the Fabian socialist Beatrice Webb, but-as James Grant observed in his perceptive WSJ review-she  ought not to have passed over Murray Rothbard.
This is the most accessible and entertaining account of the development of modern economics you're ever likely to see, and a joy to read.   

3 It is a thing of consummate irony that the last-and best-account of the late mortgage-driven financial crisis should come from a New York Times reporter. Ironic, that is, because Gretchen Morgenson (with Joshua Rosner), in her important book Reckless Endangerment, lays the blame where it belongs: squarely at the feet of the government and its political commitment to the "social justice" of home ownership for nearly everyone-including, and especially, those who could never afford it.

This goal was seized upon and perverted by the GSEs, Fannie Mae and Freddie Mac, for their executives' personal enrichment (Morgenson makes unmistakably clear that Fannie, under James Johnson, was as corrupt as any Wall Street firm). And the single-minded way in which Fannie spread around what was essentially bribery and influence peddling to silence its critics was beyond anything a Wall Street malefactor would have dreamed possible. One can say all one wants about the cynical lending policies of a Countrywide Financial, but no entity bought more Countrywide mortgages, nor was a better friend to its flamboyant CEO Angelo Mozilo, than Fannie Mae.

The defense of the GSEs to and beyond the bitter end by bullying politicians like Barney Frank completed the circle of deception, which ended up costing the taxpayers hundreds of billions of dollars, and is continuing to do so even today. Morgenson's account demands to be read.

4 The most perfectly timed nonfiction best seller in publishing history must be Walter Isaacson's authorized biography of Steve Jobs, publication of which was rushed (and it shows) to follow as closely as possible on Jobs' death on October 5. Nonetheless, the book-which is nothing less than a history of the microprocessor as well as the definitive account of the life of one of technology's greatest geniuses-is a hugely important achievement. I should think every financial advisor would want not merely to read but to study it.

Isaacson, the author of crackerjack biographies of Franklin and Einstein, took a while to come around to Jobs' repeated suggestions that he undertake this work, because he didn't understand-until Jobs' wife told him so two years ago, in nearly as many words-that Jobs was dying. (It is, of course, a key element of Jobs' emotional pathology that he hid the true nature of his illness as long as he could-the last and greatest manifestation of his legendary "reality distortion field.") 

Jobs was never the engineer-he was something far greater than that, an artist and a genuine visionary, whose genius placed him at the intersection of the humanities, technology, the entrepreneurial spirit and, yes, the counterculture. He was far more influenced by calligraphy, Eastern religions and music than he ever was by electronics, and his creations are suffused by the beauty of simplicity.

All of which should never be allowed to obscure the fact that, like many geniuses, this adopted child (a psychic wound which would never completely heal) was capable of being a singularly, almost existentially mean-spirited man. (I defy you to read this book and not think, time and again, of John Lennon.) Isaacson does not shrink from the full development of this theme-as Jobs and especially his wife did not want him to-and one finds this a welcome antidote to the rather bizarre global outpouring of affection at the death of the instantly canonized Saint Steven of Cool Technology.
Jobs' return to Apple, and the triumphs he wrought thereafter, disprove Fitzgerald's dictum that there are no second acts in American life. To those of us who lived and tried to keep investors sane during the terminal years of the dot.com craze in the late '90s, it must be the ultimate irony that, in these last dozen years of his life, Steve Jobs worked miracles that even the wildest adherents to that ill-fated bubble could never have imagined.

5 And finally, one for your practice and your soul, from one of the industry's greats. I can never think of my friend Joe Jordan without calling to mind Jimmy Breslin's description of Speaker Tip O'Neill: "a warm spring rain of a man." Joe is Senior VP of MetLife in charge of their Behavioral Finance Strategies-the latest step in a career of nearly four decades, in which he's gone from strength to strength, and mentored thousands of advisors everywhere on the globe. He (and I) always knew he had a book in him, and he finally made it manifest this year. It's Living a Life of Significance, and is available for $15 from The American College, to which-wouldn't you know it-Joe is donating all his royalties. (It can be ordered at www.theamericancollege.edu/significance.) 

The spine of the book, and the lesson that leaps out of it at you, is that we advisors have no moral right to our call reluctance-that we were sent into the world to prevent financial disaster from overtaking families, either because someone dies too soon (as Joe's dad did) or, more often these days, lives "too long." It's that impulse-to make one more call, to try to bring financial peace to one more family before we go home-that infuses this beautiful, critically important book. I can't recommend it too strongly or too warmly.

© Nick Murray 2011. All rights reserved. These and many other reviews of important resources appeared throughout the past year in Nick's newsletter, Nick Murray Interactive, a sample issue of which appears on www.nickmurray.com, click on "Newsletter." 

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