Billionaire private-equity investor Stephen Schwarzman studied geopolitics, while Morgan Stanley Chief Executive Officer James Gorman drew lessons from rowers trying to win the Olympics.
U.S. Secretary of State John Kerry looked at China and ice hockey. Economist Thomas Piketty enjoyed Mexican literature. Billionaire Wilbur Ross disagreed with Piketty’s own work on inequality. Deputy U.S. Treasury Secretary Sarah Bloom Raskin focused on the New Deal.
These were some of the responses to the annual Bloomberg News survey, which asked CEOs, investors, current and former policy makers, economists and academics to name their favorite reads in 2014.
Books seeking to explain the global financial crisis, analyze technology or plot the future for governments proved popular reads. The most-cited selections were Martin Wolf’s The Shifts and the Shocks: What We’ve Learned –- and Have Still to Learn -– from the Financial Crisis; The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson and Andrew McAfee; World Order by Henry Kissinger and House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent it from Happening Again by Atif Mian and Amir Sufi.
The List:
Stephen Schwarzman, chairman, co-founder and chief executive officer of Blackstone Group LP
At a time when the world has little or no order, Henry Kissinger’s World Order is indispensable reading. Informed by a long view of centuries of history, the author demonstrates why our diplomacy must be rooted in a genuine engagement between cultures, rigorous pragmatism and, yes, realpolitik. Henry makes clear the dangers of ambivalence in the face of the apparent landscape of disorder before us, and reminds us of the only path forward: If we are to defend our principles, we must set out to prove them.
James Gorman, chairman and CEO of Morgan Stanley
The Boys in the Boat: Nine Americans and Their Epic Quest for Gold at the 1936 Olympics by Daniel James Brown. The story of the 1936 U.S. Olympic rowing team competing in the Berlin Olympics. One should never underestimate what the determined amateur can do when armed with a professional attitude.
Final Rounds: A Father, A Son, The Golf Journey of a Lifetime by James Dodson. Any son who has played golf with his father will instantly connect not just to the golf but to the bond of father and son.
Thomas Piketty, professor at the Paris School of Economics and author of Capital in the Twenty-First Century.
One my favorite books this year was Carlos Fuentes’s novel La Voluntad y la Fortuna. It is a wonderful meditation about contemporary capitalism in Mexico.
John Kerry, U.S. secretary of state
Hotel Florida: Truth, Love, and Death in the Spanish Civil War by Amanda Vaill is just a great read. A messy, complicated period, a story about shades of grey, idealism, guts and grit in the middle of a war. I can’t read enough about Hemingway, and there were some lesser known journalists of the era that come across just as intriguing.
Citizens of London: The Americans Who Stood with Britain in Its Darkest, Finest Hour by Lynne Olson. Amazing characters set against a colorful, compelling period in London that I thought had been combed over already, but it comes alive in a new way through Murrow, Harriman, Winant, and Churchill.
Age of Ambition: Chasing Fortune, Truth, and Faith in the New China by Evan Osnos. I got this book as a gift from my deputy chief of staff who was college roommates with the author. Small world. The book’s a great reminder of China’s recent journey.
Orr: My Story by Bobby Orr. A gift I received for my 70th birthday. Orr is my Boston Bruins idol and reading this one, I’m just struck by what a class act he is off the ice. Humble, self-effacing, generous, he’s class personified. And in my mind he’ll always be soaring through the air in that famous image.
Scribe: My Life in Sports by Bob Ryan. You were never done reading the Boston Globe until you’d read what Bob Ryan had to say, whether it was about Larry Bird or the Red Sox. He was ubiquitous. Just a great columnist. Here, he finally writes a memoir of sorts, and even in semi-retirement, he still has more stories to tell.
Sarah Bloom Raskin, deputy secretary of the Department of the Treasury
The Woman Behind the New Deal: The Life and Legacy of Frances Perkins, by Kirstin Downey. This book landed mysteriously one day on a chair in my office at the Federal Reserve Board, without attribution, while I was awaiting Senate confirmation for the Treasury. I started in on it, curious to see the comparisons of our economic recovery to the post-Depression recovery. By the end of the first chapter I found myself transfixed by the first female cabinet secretary, who in 1936 was maneuvering her way through a new administration. She brought reforms and insights from her experience observing and improving working conditions.
Wilbur Ross, chairman and CEO of WL Ross & Co.
One book I read although I totally disagreed with it is Thomas Piketty’s Capital in the Twenty-First Century. He’s off the deep end, but it’s a worthwhile read because it’s at the pulse of people’s thinking on inequality.
I enjoyed Central Banking after the Great Recession, Lessons Learned and Challenges Ahead, which was published by the Brookings Institution, where I’m a trustee.
I’m waiting on former Federal Reserve Chairman Ben Bernanke’s book, which should be quite fascinating.
Alan Greenspan, former Federal Reserve chairman
“The Innovators” by Walter Isaacson and “Washington: A Life” by Ron Chernow.
Jeffrey Gundlach, co-founder and CEO of DoubleLine Capital LP
What Art Is by Arthur C. Danto
Abby Joseph Cohen, president of Goldman Sachs Group Inc.’s Global Markets Institute
The Innovators: How a Group of Hackers, Geniuses, and Geeks Created the Digital Revolution by Walter Isaacson is a wonderful reminder of the genius in many endeavors that drove development of the digital world, beginning with Ada Lovelace in the mid-19th century.
Being Wrong: Adventures in the Margin of Error by Kathryn Schulz is a deceptively easy read which tackles one of the most critical issues for decision makers: understanding how we form opinions. Importantly, she discusses how to revise those opinions when new information becomes available, rather than clinging to earlier views.
The Assassination of Margaret Thatcher: Stories by Hilary Mantel was recently released in the United States. She is a master and this compelling collection of short stories reminds us that time spent with good literature is a gift.
Mohamed El-Erian, adviser to Allianz SE and a Bloomberg View columnist
Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration by Ed Catmull is the inspiring story of Pixar Inc., or what has become the world-leading animation studio. By discussing the good, the bad and the ugly, it provides valuable insights into the management of transformational companies.
The Second Machine Age by Erik Brynjolfsson and Andrew McAfee is an optimistic analysis of the breathtaking technological changes that are changing both the workplace and our homes.
Together these two books provide us with a terrific feel for our rapidly changing world, including what it takes to better understand and navigate it.
Dan Fuss, vice chairman of Loomis Sayles & Co.
War and State Building in Medieval Japan, edited by John Ferejohn and Francis McCall Rosenbluth. “The Limits of Partnership: U.S.-Russian Relations in the Twenty-First Century” by Angela E. Stent. I just completed “Pere Marie- Benoit and Jewish Rescue: How a French Priest Together with Jewish Friends Saved Thousands during the Holocaust” by Susan Zuccotti. Most of my reading, outside of direct research and the newspapers, is what I find and trust on the geopolitical side. This material is normally not in book form. I wish I had more time for books but the world is moving quite fast now.
Henry M. Paulson, former U.S. Treasury secretary and chairman of the Paulson Institute
Walter Isaacson’s latest book, The Innovators, weaves together dozens of stories of the innovators who contributed to the development of computers and the Internet. Some of the narratives are short vignettes -- others are mini biographies like the Bill Gates story -- but all thoroughly engaged me. The book’s magic is that it brings technology to life using simple and easy to understand language. It is a compelling account of the different qualities of innovators and the collaborative process of innovation -- that over-used word, which is the Holy Grail so many businesses and nations are pursuing.
Anat Admati, professor of finance and economics at Stanford Graduate School of Business and co-author of The Bankers’ New Clothes: What’s Wrong with Banking and What to Do about It
Just when you thought that there can’t possibly be any more to say about the financial crisis, four excellent books came out in 2014 to expose, from different perspectives, the continued distortions in the financial system and the failure of policy makers to learn essential lessons and take the appropriate actions. The issues are important but often ignored or misunderstood.
Something is clearly wrong, and too little has changed in the U.S. housing market. In House of Debt, economists Atif Mian and Amir Sufi present compelling evidence that homeowners’ distress exacerbated and prolonged the recession. They are critical of U.S. policy makers who focused on saving banks while failing to relieve homeowners’ distress, and advocate reducing the reliance on debt (which is, counterproductively, encouraged and subsidized) in the financial system, including housing.
Another important book, Other People’s Houses: How Decades of Bailouts, Captive Regulators, and Toxic Bankers Made Home Mortgages a Thrilling Business by law scholar Jennifer Taub, traces specific homeowners, bankers, regulators and politicians in the last few decades to expose how bad housing policy, failed regulations and harsh bankruptcy laws have harmed Main Street homeowners while benefiting bankers.
We meet shocking recklessness in Shredded: The Rise and Fall of The Royal Bank of Scotland by Ian Fraser, which tells the story of RBS and especially of Fred Goodwin, its CEO from 2000 to 2008. The extent of greed and broken governance is fascinating and highly disturbing. The book raises critical questions about how and why RBS practices persisted and whether much if anything has changed to prevent such institutions from harming society. (Beware that the author falls into the pervasive language trap that falsely portrays “bank capital” as if it refers to banks’ “holdings” rather than to their funding mix or indebtedness.)
The themes of flawed policies and recklessness are also paramount in Martin Wolf’s The Shifts and the Shocks. Wolf offers an insightful and brutal analysis of the broad political and economic forces that have shaped the global economy in recent years, particularly in Europe.
Jason Furman, chairman of President Barack Obama’s Council of Economic Advisers
I spent more time thinking about Thomas Piketty’s Capital in the Twenty-First Century and Atif Mian and Amir Sufi’s House of Debt than any other economics books this past year. Both books add to our empirical understanding, challenge our prevailing assumptions and, both in their rightness and in their wrongness, have initiated important debates.
Capital in the Twenty-First Century got me to move beyond the traditional thinking about labor earnings inequality to better appreciate the role of capital income, including inherited wealth, in the large increase in inequality in recent decades.
House of Debt shifted the focus from bank lending to household indebtedness, powerfully advancing a novel interpretation of the causes and aftermath of the Great Recession.
Neither book is the last word, especially on policy prescriptions which often ranged from impractical to half-baked to just plain wrong. But both of them will help get us closer to the understanding and ideas that we need.
My favorite diversion was Minae Mizumura’s A True Novel, a retelling of Wuthering Heights set in postwar Japan. It had compelling characters, a unique mode of storytelling and an epic sweep.
Bill Ford, executive chairman of Ford Motor Co.
The Wise Heart: A Guide to the Universal Teachings of Buddhist Psychology by Jack Kornfield. It is very practical advice for practicing compassion in a difficult world. Jack Kornfield is an original thinker and a brilliant communicator.
Juergen Fitschen, co-CEO of Deutsche Bank AG
The Innovation Paradox: Why Good Businesses Kill Breakthroughs and How They Can Change by Tony Davila and Marc J. Epstein. How to successfully marry disruptive ideas and innovative thinking is one of the key challenges for established corporations. Davila and Epstein convincingly describe how incremental innovation can coexist with breakthrough thinking, and how the benefits of pursuing operational excellence do not turn into liabilities for breakthrough innovation.
Carolyn A. Wilkins, senior deputy governor, Bank of Canada
I read quite a few books this year, both fiction and non- fiction. Here are my favorites: 1) Kate Atkinson’s Life After Life.”There is something irresistible in the possibility of renewal and alternative paths. Kate Atkinson brings this possibility to life in Ursula and the other characters in her book in a way that makes turning pages feel like opening doors to new places. The compelling art of her work is that she does this without resorting to predictable second chances, but rather by showing the power of determination. 2) Martin Wolf’s The Shifts and the Shocks. It takes a knowledgeable and confident hand to add value to all the work we have seen so far on the lessons from the financial crisis, and Martin Wolf pulls it off. Some of the messages are tough for policy makers to read, and some of the recommendations are controversial. But the clarity and boldness of his analysis, his comprehensive perspective and acknowledgment that the financial crisis has had more insidious and long-lasting effects that need to be addressed, makes this a valuable contribution to what is bound to be a conversation that spans many years to come. And the number of pages devoted to notes made me smile.
Martin Sorrell, founder and CEO of WPP Plc
Empress Dowager Cixi: The Concubine Who Launched Modern China by Jung Chang proves that as some Chinese believe the last two hundred years or so have been a blip in history. It also proves why gender equality could be very productive.
Jim Yong Kim, president of the World Bank
Cheryl Strayed’s Wild: From Lost to Found on the Pacific Crest Trail. Any writer’s ability to be that honest is striking. I also really appreciated her own persistence in finishing the hike. It helped her deal with such profound issues, and it was a reminder to readers that there is a kind of a deep, sometime therapeutic value to persist in the face of an almost impossible task until you are done.
Mark Hurd, co-CEO of Oracle Corp.
The Organized Mind: Thinking Straight in the Age of Information Overload by Daniel J. Levitin. The time is rapidly approaching when insights driven by Big Data will dominate not only most business decisions but also many choices we make in our personal lives. So when I read a review of Levitin’s book, I sat up and took notice because I’m bombarded by information every hour of every day. Levitin does an excellent job in discussing the science of thinking in language that’s not only clear and informative but also entertaining. Readers of this book will get a better understanding of the mind along with some valuable guidance on how to exploit the emerging world of Big Data.
Pippa Malmgren, founder of DRPM Group
I loved The Second Machine Age by Erik Brynjolfsson and Andrew McAfee because it reminds us we are on the cusp of a new industrial revolution driven by computers, sensors, big data and artificial intelligence. Many economists feel there will be deflation forever but this book shows that there will also be extraordinary innovation. Of course, we should keep in mind what Stephen Hawking says about this new era of artificial intelligence. The first thing a robot is likely to say to us is “I can’t believe you are so stupid.”
Mervyn King, former governor of the Bank of England and visiting professor at New York University
Charles W. Calomiris and Stephen H. Haber’s Fragile by Design: The Political Origins of Banking Crises and Scarce Credit” is a magnificent study of the economics and politics of banking. “The Shifts and the Shocks” by Martin Wolf is the best all-round account of the global financial crisis and what we should do to reduce the chances of a repetition.
Bharat Masrani, CEO of Toronto-Dominion Bank
An Astronaut’s Guide to Life on Earth: What Going to Space Taught Me About Ingenuity, Determination and Being by Chris Hadfield. Not a business book per se, Colonel Hadfield’s memoir recounts how insatiable curiosity, single-minded dedication and a healthy competitive streak propelled him to, quite literally, out-of-this world accomplishments. His humility and charm throughout his ascent to notoriety are further evidence that a winning formula includes staying true to yourself.
Steve Jobs by Walter Isaacson examines a simple, but important, concept: how thinking like a customer transformed an industry. This philosophy led Apple Inc. to become one of the most valuable and recognizable companies in the world.
Benoit Coeure, member of the European Central Bank’s Executive Board
I don’t read many books on finance. Life’s too short for that and I prefer novels or poetry. I enjoyed reading “ouse of Debt by Atif Mian and Amir Sufi, an illuminating insight into the dangers of collateralized finance. A great book I’ve only just read (it’s never too late) is “Memoirs” by Jean Monnet. It helps you understand most of what’s happening today in Europe. And why Brexit would be a setback for the Western world.
Andy Haldane, chief economist at the Bank of England
Scarcity: Why Having Too Little Means So Much by economist Sendhil Mullainathan and psychologist Eldar Shafir, is an extraordinary book. It has received, in my view, far too little attention. Scarcity of goods, services, resources and time have all been analyzed to death. The scarcity that exists between our ears -- our cognitive bandwidth -- has scarcely been analyzed at all. Mullainathan and Shafir show that this neurological constraint is fundamental in explaining all manner of behaviors and outcomes, from unaffordable borrowing to measured IQs. The public policy implications are potentially profound.
Mark Fields, CEO of Ford Motor Co.
“he Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William N. Thorndike. These CEOs thought very differently and took a bit of a contrarian view about how to create value in their companies. Each looked at their business from the outside in, took their time to develop a clear point of view and stuck with it, which ultimately created a lot of value for shareholders and everyone associated with their companies.
Anne Hidalgo, mayor of Paris
Dora Bruder by Patrick Modiano. I recommend to everyone this poignant yet short and easy-to-read novel, which plunges readers into history and memory as Modiano based it on an ad for a missing person published in a Parisian newspaper in December 1941. With unrelenting constancy as well as tenderness and modesty, the writer follows the steps of a young woman fleeing her home and school to finally disappear in the somber Paris of the 1940s. Modiano’s investigations reveal she was included in a convoy to a concentration camp in 1942, ending up in the hell of Auschwitz. I was gripped by Patrick Modiano’s art, his choice of words and sober style reinforcing the story’s intensity.
Bjorn Wahlroos, Chairman of Nordea Bank AB and Sampo Oyj
Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change by Edmund S. Phelps. He takes off where Schumpeter and Hayek ended, to explain what it is that makes our economies modern. Against a rich and insightful historical background he draws a picture of the market institutions and social traditions that promote innovation and thus economic growth. In the process he redraws many political front lines and provides us with an answer to those who believe more public funding for investment and innovation is the road forward for our stagnant economies. It is a marvelous book that deserves to be read by everyone, but particularly by those entrusted with the design of the European future.
Ian Bremmer, founder and president of Eurasia Group
In World Order, former Secretary of State Henry Kissinger argues that “chaos threatens” the world order “side by side with unprecedented interdependence” between nations. Kissinger is dead right in describing the evolution of the world order and how it’s unravelling today. His predictions for what comes next rely on inertia: they will prove accurate if today’s trends continue apace without a significant shift in trajectory.
The Revenge of Geography: What the Map Tells Us About Coming Conflicts and the Battle Against Fate by Robert D. Kaplan. Kaplan brings a true understanding of the long range geopolitics that seriously matter, even as world leaders lose the plot in the wake of distracting headlines du jour. The long term is about the rebalancing to Asia, whether the United States engages in a concerted strategy to “pivot” or not. Asia is the world’s economic, security, and demographic locus, and the preeminent geopolitical challenge of tomorrow. Even if it did come out in 2012, “Revenge of Geography” remains well ahead of its time in making the case that global power dynamics will revolve around Asia in the years to come.
Dataclysm: Who We Are (When We Think No One’s Looking) by Christian Rudder. In a world where corporations and governments have growing troves of data on citizens, it’s essential to take a step back and question what can actually be gleaned from this stockpile. “Dataclysm” is an extremely insightful book that actually mines big data for social implications, outlining what it can tell us about the state of humankind—and importantly, what it can’t. Finally somebody is letting data speak for itself.
It opens some very important questions on the evolution of society. And the author seems like he’d be an amusing dinner guest—always a plus. I highly recommend it.
Grover Norquist, president of Americans for Tax Reform
“Glass Jaw: A Manifesto for Defending Fragile Reputations in an Age of Instant Scandal” by Eric Dezenhall can be summed up in its subtitle. He is an expert in PR trench warfare and how the Blitzkrieg of Internet and 24/7 news coverage has changed the correlation of forces putting every public person and corporation at risk. The book is filled with examples of success and failure. There is no cure all, no promise of certain success. Some problems don’t fix. Sorry.
The book I have read and reread for months this year is “End the IRS before it Ends Us: How to Restore a Low Tax, High Growth, Wealthy America.” While writing it, I discovered a treasure trove of books on the role taxes play in American history. A favorite is “Taxation in Colonial America” by Alvin Rabushka, which documents the tax burden in the early 1770s before the Boston Tea Party. Average taxes then were 1 to 2 percent of income. Londoners were paying 20 percent. Empires are expensive. Just how did we go from 1 to 2 percent taken in taxes to our government spending over 30 percent of gross domestic product?
Philipp Hildebrand, vice chairman of BlackRock Inc. and former president of the Swiss National Bank
Henry Kissinger’s World Order contains the best reflection I’ve read on Russia this year. Henry Kissinger also provides an exceptional long-term perspective on Europe. Much of what he has to say is highly relevant for the future of the euro zone. The narrative is positioned around the premise that the core problem in Europe is that Germany has always been either too strong or too weak. In a sense that question is still very much on the table today: The question of how to form a Europe in which Germany is just right remains at the core the European integration project.
Edmund S. Phelps, Nobel-laureate economics professor at Columbia University
“Excellent Sheep: The Miseducation of the American Elite and the Way to a Meaningful Life” by William Deresiewicz must be one of the darkest books of 2014. We think of second-rung colleges as places where students are trained to occupy positions in the depths of a bureaucracy -- “lives of subordination and supervision.” But, the author argues, the Ivy League schools are -- in their own way -- damaging too. The kids arrive “curious, hungry for purpose” but leave with a “passion only for success.” Few experience college as the beginning of their own project of intellectual discovery and personal growth. If the author is right, the League’s product since the 1960s is a smug, self-congratulatory elite. Another reason why the American economy has been becalmed for several decades.
Renee James, president of Intel Corp.
I’m currently reading Man’s Search for Meaning by Viktor E. Frankl. The reason why is self-evident.
Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corp.
Harry Truman’s Excellent Adventure: The True Story of a Great American Road Trip by Matthew Algeo. Every American should read this true story. It chronicles a time and attitude long lost.
Richard Fisher, president of the Federal Reserve Bank of Dallas
On monetary matters, Martin Wolf’s The Shifts and the Shocks is a corker. Wolf is under no illusion about the frailties of economists and policy makers. The root cause of the financial debacle endured in 2007-2010 was, in Wolf’s point- blank words, “The economics establishment failed.” He rails against the “ignorance and arrogance of academics and policy makers,” “the insouciance encouraged by rational-expectation and efficient-market hypotheses,” and “the workhorse macro- economic tool used by central banks (that) was a ‘dynamic stochastic general equilibrium model’ in which finance barely appeared.” He harshly scolds contemporary economists for habitually neglected classical economic thought as framed by the likes of the iconic Walter Bagehot, historian extraordinaire Charles Kindelberger, John Maynard Keynes and Hyman Minsky.
“It is not enough to blame institutional failure” for the debacle we experienced, he says, “because the institutions that failed were those many economists had lauded. This then was not an institutional failure but an intellectual one.” Wolf’s criticism of the economics establishment is withering. And spot on.
Greg Mankiw, professor of economics at Harvard University
House of Debt by Atif Mian and Amir Sufi. In this book, two prominent economists who have done extensive research on the recent financial crisis and subsequent recession explain their findings in simple terms so they can be understood by the general public. They argue that policy makers have focused too much on struggling banks and too little on the plight of highly indebted homeowners. They also suggest that to prevent future crises, we as a society should rely less on debt finance and more on creative forms of equity finance.
Tessa Jowell, member of the U.K. parliament
The American Lover by Rose Tremain. She’s wonderful at drawing character. It’s short stories and if you’re busy you can enjoy them without every worrying if you’re going to finish it.