One’s selections this year run a bit farther afield than just the usual works on finance, economics and histories thereof. This is testimony both to a relative paucity of genuine bell-ringers in our areas of direct interest, as well as to the richness one has found elsewhere.

Nor have I one clear, unequivocal choice at the top of the list for Book of the Year, inasmuch as my head claims one and my heart another.

The intellectual choice is Johan Norberg’s Progress: Ten Reasons to Look Forward to the Future. For the advisor, this is a worthy successor to Matt Ridley’s The Rational Optimist, in that Norberg documents unprecedented (and indeed accelerating) positive trends in 10 of the key metrics of human experience, from food and sanitation to life expectancy and even freedom. (Unsurprisingly, he finds that economic growth is the closest thing humankind has to a magic bullet.)

Items: Global extreme poverty has halved just since 1980; global literacy has grown from less than half of all adults (from the dawn of man until the 1960s) to 85% and rising; for the last 25 years, 285,000 people have gained access to clean water every day. And still the great bulk of investors we encounter are convinced that the world is going to hell in a handbasket. Progress is the antidote. Its conclusions are as ennobling as they are inarguable, making this a drop-dead critical read for advisors and a worthy holiday gift for your more thoughtful clients and prospects.

My emotional choice for Book of the Year is Bob Benmosche’s sadly posthumous autobiography, Good for the Money. Benmosche, the savior of AIG, remains the only genuine hero to emerge from the great financial crisis of 2008-09. A builder rather than a liquidator—and a leader rather than a manager—he saw AIG for what it had been before the crisis and (he alone believed) could be again. It was only one unit of 440 of AIG’s 100,000 global employees, insanely insuring mountains of worthless subprime mortgages, that had brought the company down.

Benmosche came in with the stated goal of shoring up the morale of the other 99,000 people at AIG, getting them back to work, selling off nonstrategic businesses (but only at the right prices), and paying back every penny of the government bailout money with interest. This he did—there is no other word for it—heroically. Good for the Money is a great book, by and about a great man. It simply demands to be read.   

Mind and heart can readily agree on the runner-up: It’s Don Watkins’ and Yaron Brook’s Equal is Unfair: America’s Misguided Fight Against Income Inequality. This extraordinary and indispensable book does for the “issue” of income inequality what Alex Epstein’s The Moral Case for Fossil Fuels did for climate change. It is a powerfully argued, deeply moral dismantling of the economic, social and political underpinnings of the thesis that income inequality—which must proceed, in a free society, from unequal talents, drive and discipline—is inherently inimical to the American Dream. Indeed, the authors irrefutably document that it is the American Dream: that there is and ought to be no limit to how far a person of sufficient intelligence and initiative can rise by creating value. A must read not just for advisors but for all Americans.

Financial and market history geek that one unashamedly is, one expected to like Jeff Gramm’s Dear Chairman: Boardroom Battles and the Rise of Shareholder Activism. Instead, I was quietly bowled over by it, both as history and as literature. The book is organized into eight signal episodes in the evolution of shareholder activism, each of which was touched off by one very significant letter from a shareholder to management. (The first is Benjamin Graham’s to the Northern Pipeline Company in 1928.) But Gramm does not force us to read the letters themselves, nor does he allow them to interrupt the flow of his narrative. (They’re there as appendices for those with the time and interest.) The author is a dispassionate observer of activism, not at all inclined to obscure its occasional excesses and even abuses. Moreover, he’s a writer with a genuine voice, and an utter delight to read.

My top choice among economic histories this year is the erudite yet sparkling JFK and the Reagan Revolution by Larry Kudlow and Brian Domitrovic. You all know Larry, although you may not know that I credit him with effectively re-educating me in Austrian economics after he returned to Bear Stearns from the Reagan administration in the early  ’80s. Brian is the author of Econoclasts, by far the best account of the supply-side revolution. Their new book documents President Kennedy’s conversion to the idea of permanently cutting high marginal tax rates as a way of stimulating sustainable economic growth. This is a story all but lost, and it places the Reagan tax cuts in their proper perspective. The economics here are as powerful as the historiography, and the book is both an enlightenment and a joy.

Another high point this year is Angela Duckworth’s Grit: The Power of Passion and Persistence. A psychology professor at the University of Pennsylvania and the recipient of a MacArthur genius grant, Ms. Duckworth brings to her subject—brilliantly encapsulated in her book’s subtitle—both a scrupulous scholarship and a very accessible personal style and warmth. Innate talent as a determinant of life outcomes is a pure myth—Mozart and Tiger Woods came under their fathers’ single-minded instruction as toddlers, and don’t ask how many hours the Beatles performed live in Hamburg. Moreover, as Calvin Coolidge said, unrewarded genius is almost a proverb. Ms. Duckworth documents that persistence and determination—together with a certain hunger for transcendence—are the real drivers of superior life outcomes. The advisor who is grinding it out while watching people much smarter than she failing all around her will find understanding and inspiration in Grit—as will any parent.

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