Best economics books of 2014: Fragile by Design
Fragile by Design: The Political Origins of Banking Crises and Scarce Credit, by Charles Calomiris and Stephen Haber
Michael Mauboussin Tips From Great Investors [Pt.2]
This is the second part of a short series on Michael J. Mauboussin's research document reflecting on 30 years of Wall Street analysis published in 2016. Q3 2020 hedge fund letters, conferences and more The document outlined Mauboussin's observations of successful investors throughout his three decades on the Street. This article starts at point six. Read More
Why are banking systems unstable in so many countries–but not in others? The United States has had twelve systemic banking crises since 1840, while Canada has had none. The banking systems of Mexico and Brazil have not only been crisis prone but have provided miniscule amounts of credit to business enterprises and households. Analyzing the political and banking history of the United Kingdom, the United States, Canada, Mexico, and Brazil through several centuries, Fragile by Design demonstrates that chronic banking crises and scarce credit are not accidents due to unforeseen circumstances. Rather, these fluctuations result from the complex bargains made between politicians, bankers, bank shareholders, depositors, debtors, and taxpayers. The well-being of banking systems depends on the abilities of political institutions to balance and limit how coalitions of these various groups influence government regulations.
Best economics books of 2014: Microeconomics
Microeconomics: A Very Short Introduction, by Avinash Dixit
Microeconomics – individuals’ choices of where to live and work, how much to save, what to buy, and firms’ decisions about location, hiring, firing, and investment – involves issues that concern us on a daily basis. But when people think about economics, they tend to place importance on the bigger picture – macroeconomics – including issues such as unemployment, inflation, and the competitiveness of nations.
Best economics books of 2014: Political Order and Political Decay
Writing in The Wall Street Journal, David Gress called Francis Fukuyama’s Origins of Political Order “magisterial in its learning and admirably immodest in its ambition.” In The New York Times Book Review, Michael Lind described the book as “a major achievement by one of the leading public intellectuals of our time.” And in The Washington Post, Gerard DeGrott exclaimed “this is a book that will be remembered. Bring on volume two.”
Best economics books of 2014: Stress Test
Stress Test: Reflections on Financial Crises, by Timothy Geithner, Random House Business
As president of the Federal Reserve Bank of New York and then as President Barack Obama’s secretary of the Treasury, Timothy F. Geithner helped the United States navigate the worst financial crisis since the Great Depression, from boom to bust to rescue to recovery. In a candid, riveting, and historically illuminating memoir, he takes readers behind the scenes of the crisis, explaining the hard choices and politically unpalatable decisions he made to repair a broken financial system and prevent the collapse of the Main Street economy. This is the inside story of how a small group of policy makers—in a thick fog of uncertainty, with unimaginably high stakes—helped avoid a second depression but lost the American people doing it. Stress Test is also a valuable guide to how governments can better manage financial crises, because this one won’t be the last.
Best economics books of 2014: How to Speak Money
How to Speak Money: What the Money People Say–And What It Really Means, by John Lanchester
To those who don’t speak it, the language of money can seem impenetrable and its ideas too complex to grasp. In How to Speak Money, John Lanchester—author of the New York Times best-selling book on the financial crisis, I.O.U.—bridges the gap between the money people and the rest of us.
With characteristic wit and candor, Lanchester reveals how the world of finance really works: from the terms and conditions of your personal checking account to the evasions of bankers appearing in front of Congress. As Lanchester writes, we need to understand what the money people are talking about so that those who speak the language don’t just write the rules for themselves.
Best economics books of 2014: Thrive
Thrive: The Power of Evidence-based Psychological Therapies by Richard Layard
Britain has become a world leader in providing psychological therapies thanks to the work of Richard Layard and David Clark. But, even so, in Britain and worldwide the majority of people who need help still don’t get treatment. This is both unjust and a false economy.
Best economics books of 2014: European Spring
Britain and the rest of Europe are in a mess. Our economies are failing to deliver higher living standards for most people and many have lost faith in politicians’ ability to deliver a brighter future, with support for parties like UKIP soaring. Are stagnation, decline and disillusionment inevitable? Do people have to turn to the likes of UKIP for alternative solutions? As a critically acclaimed author who was until recently a senior policymaker, Philippe Legrain has a unique combination of insider knowledge, intellectual authority and independent perspective that make him ideally placed to explain why things have gone wrong – and how to put them right. In this brilliantly original and passionate book, he explains why we need a European Spring: economic and political renewal. ‘Philippe Legrain provides an original and insightful analysis of what has gone wrong with Europe’s economies and politics and a timely warning that the crisis ultimately threatens our open societies. Better still, he provides a blueprint for a brighter future and how to achieve it. ‘ George Soros
Best economics books of 2014: House of Debt
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 Great American Recession resulted in the loss of eight million jobs between 2007 and 2009. More than four million homes were lost to foreclosures. Is it a coincidence that the United States witnessed a dramatic rise in household debt in the years before the recession—that the total amount of debt for American households doubled between 2000 and 2007 to $14 trillion? Definitely not. Armed with clear and powerful evidence, Atif Mian and Amir Sufi reveal in House of Debt how the Great Recession and Great Depression, as well as the current economic malaise in Europe, were caused by a large run-up in household debt followed by a significantly large drop in household spending.
Best economics books of 2014: War! What is it Good for?
War! What is it Good for?: The Role of Conflict in Civilisation, from Primates to Robots, by Ian Morris
In War! What is it Good for? What Is It Good For?, the renowned historian and archaeologist Ian Morris tells the gruesome, gripping story of fifteen thousand years of war, going beyond the battles and brutality to reveal what war has really done to and for the world. Stone Age people lived in small, feuding societies and stood a one-in-ten or even one-in-five chance of dying violently. In the twentieth century, by contrast—despite two world wars, Hiroshima, and the Holocaust—fewer than one person in a hundred died violently. The explanation: War, and war alone, has created bigger, more complex societies, ruled by governments that have stamped out internal violence. Strangely enough, killing has made the world safer, and the safety it has produced has allowed people to make the world richer too.
Best economics books of 2014: Capital in the Twenty-First Century
Capital in the Twenty-First Century, by Thomas Piketty
What are the grand dynamics that drive the accumulation and distribution of capital? Questions about the long-term evolution of inequality, the concentration of wealth, and the prospects for economic growth lie at the heart of political economy. But satisfactory answers have been hard to find for lack of adequate data and clear guiding theories. In Capital in the Twenty-First Century, Thomas Piketty analyzes a unique collection of data from twenty countries, ranging as far back as the eighteenth century, to uncover key economic and social patterns. His findings will transform debate and set the agenda for the next generation of thought about wealth and inequality.
Best economics books of 2014: The Dollar Trap
The Dollar Trap: How the US Dollar Tightened its Grip on Global Finance by Eswar S. Prasad
The U.S. dollar’s dominance seems under threat. The near collapse of the U.S. financial system in 2008-2009, political paralysis that has blocked effective policymaking, and emerging competitors such as the Chinese renminbi have heightened speculation about the dollar’s looming displacement as the main reserve currency. Yet, as The Dollar Trap powerfully argues, the financial crisis, a dysfunctional international monetary system, and U.S. policies have paradoxically strengthened the dollar’s importance.
Best economics books of 2014: The Euro Trap
The Euro Trap: On Bursting Bubbles, Budgets and Beliefs by Hans-Werner Sinn
The Euro Trap: On Bursting Bubbles, Budgets and Beliefs offers a critical assessment of the history of the euro, its crisis, and the rescue measures taken by the European Central Bank and the community of states. The euro induced huge capital flows from the northern to the southern countries of the Eurozone that triggered an inflationary credit bubble in the latter, deprived them of their competitiveness, and made them vulnerable to the financial crisis that spilled over from the US in 2007 and 2008. As private capital shied away from the southern countries, the ECB helped out by providing credit from the local money-printing presses. The ECB became heavily exposed to investment risks in the process, and subsequently had to be bailed out by intergovernmental rescue operations that provided replacement credit for the ECB credit, which itself had replaced the dwindling private credit. The interventions stretched the legal strictures stipulated by the Maastricht Treaty which, in the absence of a European federal state, had granted the ECB a very limited mandate. These interventions created a path dependency that effectively made parliaments vicarious agents of the ECB’s Governing Council.
Best business books of 2014: Dragnet Nation
In Dragnet Nation, award-winning investigative journalist Julia Angwin reports from the front lines of America’s surveillance economy, offering a revelatory and unsettling look at how the government, private companies, and even criminals use technology to indiscriminately sweep up vast amounts of our personal data. In a world where we can be watched in our own homes, where we can no longer keep secrets, and where we can be impersonated, financially manipulated, or even placed in a police lineup, Angwin argues that the greatest long-term danger is that we start to internalize the surveillance and censor our words and thoughts, until we lose the very freedom that makes us unique individuals. Appalled at such a prospect, Angwin conducts a series of experiments to try to protect herself, ranging from quitting Google to carrying a “burner” phone, showing how difficult it is for an average citizen to resist the dragnets’ reach.
Best business books of 2014: The Second Machine Age
In recent years, Google’s autonomous cars have logged thousands of miles on American highways and IBM’s Watson trounced the best human Jeopardy! players. Digital technologies—with hardware, software, and networks at their core—will in the near future diagnose diseases more accurately than doctors can, apply enormous data sets to transform retailing, and accomplish many tasks once considered uniquely human.
In The Second Machine Age MIT’s Erik Brynjolfsson and Andrew McAfee—two thinkers at the forefront of their field—reveal the forces driving the reinvention of our lives and our economy. As the full impact of digital technologies is felt, we will realize immense bounty in the form of dazzling personal technology, advanced infrastructure, and near-boundless access to the cultural items that enrich our lives.
Best business books of 2014: Hack Attack
Hack Attack: How the Truth Caught Up with Rupert Murdoch by Nick Davies
Hack Attack: How the Truth Caught Up with Rupert Murdoch is the mesmerizing story of how Davies and a small group of lawyers and politicians took on one of the most powerful men in the world—and beat him. It exposes the inner workings of the ruthless machine that was the News of the World, and of the private investigators who hacked phones, listened to live calls, sent Trojan horse emails, bribed the police, and committed burglaries to dig up tabloid scoops. Above all, it is a study of the private lives of the power elite. It paints an intimate portrait of the social network that gave Murdoch privileged access to government, and allowed him and his lieutenants to intimidate anyone who stood up to them.
Best business books of 2014: Shredded
Shredded: Inside RBS, the Bank that Broke Britain by Ian Fraser
‘The definitive account of the Royal Bank of Scotland fiasco. It’s an engaging, if in some ways infuriating, tale of how self-serving bank executives systematically broke the rules, lent with astonishing recklessness, abused customers and got suckered by Wall Street – before ultimately dumping their mess on taxpayers. Fraser doesn’t just point the finger at Royal’s clueless bankers. He also expertly chronicles the role of misguided regulations, captured supervisors and deluded politicians in fuelling this catastrophe.’ – Yves Smith, founder of Naked Capitalism and author of econned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism ‘This book should be posted through the letterbox of every taxpayer in Britain.’ – David Mellor, former chief secretary to the Treasury and secretary of state for National Heritage ‘Ian Fraser has spotted stories, uncovered scandals and written about them in a detailed and accessible way that leaves many other financial journalists in the dust.’ – Eamonn O’Neill, director of the MSc course in investigative journalism at the University of Strathclyde At its zenith, the Royal Bank of Scotland was the world’s biggest bank.
Best business books of 2014: The Boom
Russell Gold, a brilliant and dogged investigative reporter at The Wall Street Journal, has spent more than a decade reporting on one of the biggest stories of our time: the spectacular, world-changing rise of “fracking.” Recognized as a finalist for the Pulitzer Prize and a recipient of the Gerald Loeb Award for his work, Gold has traveled along the pipelines and into the hubs of this country’s energy infrastructure; he has visited frack sites from Texas to North Dakota; and he has conducted thousands of interviews with engineers and wildcatters, CEOs and roughnecks, environmentalists and politicians. He has also sifted through reams of engineering reports, lawsuit transcripts, and financial filings. The result is an essential book—a commanding piece of journalism, an astounding study of human ingenuity, and an epic work of storytelling.
Best business books of 2014: A Bigger Prize
A Bigger Prize: How We Can Do Better than the Competition by Margaret Heffernan
Competition runs through every aspect of our lives today. From the cubicle to the race track, in business and love, religion and science, what matters now is to be the biggest, fastest, meanest, toughest, richest.
The upshot of all these contests? As Margaret Heffernan shows in this eye-opening book, competition regularly backfires, producing an explosion of cheating, corruption, inequality, and risk. The demolition derby of modern life has damaged our ability to work together.
Best business books of 2014: The Innovators
Following his blockbuster biography of Steve Jobs, The Innovators is Walter Isaacson’s revealing story of the people who created the computer and the Internet. It is destined to be the standard history of the digital revolution and an indispensable guide to how innovation really happens.
What were the talents that allowed certain inventors and entrepreneurs to turn their visionary ideas into disruptive realities? What led to their creative leaps? Why did some succeed and others fail?
In his masterly saga, Isaacson begins with Ada Lovelace, Lord Byron’s daughter, who pioneered computer programming in the 1840s. He explores the fascinating personalities that created our current digital revolution, such as Vannevar Bush, Alan Turing, John von Neumann, J.C.R. Licklider, Doug Engelbart, Robert Noyce, Bill Gates, Steve Wozniak, Steve Jobs, Tim Berners-Lee, and Larry Page.
Best business books of 2014: Flash Boys
Flash Boys: Cracking the Money Code, by Michael Lewis
This is a Summary & Analysis of Flash Boys: A Wall Street Revolt by Michael Lewis. Why it is that the only person arrested after the financial crisis of 2008 is a computer programmer ultimately being prosecuted by the same large company that was involved in the financial crisis to begin with?
In our analysis, we explain the changes that occurred in the regulation, technology, and business structure in Wall Street that made the environment ripe for collapse. Lewis also shines a light on HFT in the Flash Boys, the ones truly responsible for the breakdown of the system if any one group of people can be. However, what high frequency traders did was in no way illegal. It was not even frowned upon until someone conceived a way for traders to do so on a very large, very controllable scale. For years there have been urban legend style rumors of programmers able to build a computer program that would “catch the pennies off of pennies”.
Best business books of 2014: The Shifts and the Shocks
In The Shifts and the Shocks, Martin Wolf – one of the world’s most influential economic commentators and author of Why Globalization Works – presents his controversial and highly original analysis of the economic course of the last seven years.
There have been many books that have sought to explain the causes and courses of the financial and economic crisis which began in 2007-8. The Shifts and the Shocks is not another detailed history of the crisis, but the most persuasive and complete account yet published of what the crisis should teach us us about modern economies and economics.