Even my mom is complaining that I haven't been writing enough lately, and indeed, I'm trying to take some time off. I've also been working on this long post.
Last year I wrote a long summary of some of the books that I had read during the year and the feature was popular enough that I decided to do it again this year. So here's my last post of the year.
Let's start with a little microeconomic decision making....
I enjoyed Freakonomics, Super Freakonomics and a similar book called the Logic of Life. Sure, these books have come in for some criticism, but I think they do a good job stripping away our personal and cultural biases and looking at various scenarios from a micro economic perspective. If drug dealing is so lucrative, why do dealers live with their mothers? What's the science behind Global Warming? Many of the topics are taboo, so it's refreshing to read a dispashionate analysis of them. Does abortion prevent crime and if so, is it worth it? After all, we've had a collapse in crime rates at about the same time that all those kids born to low income mothers would have been reaching their peak mugging years, but they weren't born. Hmm.
This year is the 60th anniversary of the North Korean invasion of South Korea. The Korean war is often misunderstood and largely forgotten. Maybe I just wasn't paying attention, but I don't recall seeing a commemoration of the 60th anniversary of the Inchon landing in the local papers. David Halberstam's "The Coldest Winter" does an outstanding job laying out the war itself, but also provides mini-biographies of the major players. Korea is often referred to as a "tie", but the war was certainly a victory. South Korea was finished as a country until we stepped in to re-establish it and when you think of the tragedy of North Korea under Kim, think of what it would have been like if he had controlled the entire peninsula.
The Left likes to stoke the myth that all major business and technological accomplishments have required government support. The claim is ridiculous and if you want a good history of two of the examples that the left cites--steamboats and railroads--read about the life of Cornelius Vanderbilt. The book provides a great history of Vanderbilt's life as well as a glimpse into the early American industrial revolution. As an added benefit, the book provides a detailed background on Gibons v. Ogden--one of the most important legal cases in American history.
I enjoyed H. W. Brand's flattering portrait of FDR in "Traitor to His Class." I've read about the Depression in Modern Times and I've read all the major Supreme Court cases of the period, but Brand's book provides and interesting and compelling narrative of the period. While reading the book, I couldn't help thinking that Roosevelt was making things worse. FDR believed that competition led to lower prices--which he viewed as bad, so he made every effort to ensure that businesses could get together to hold prices artificially high while he worked to punish those who undercut the market. He tried to plan the output of all the major industries and introduced a level of randomness by, for example, personally setting the price of gold each morning. By his 5th year in office--7 years into the Depression--things were much worse.
I didn't need to be convinced that Roosevelt's policies worsened the Depression, but Amity Shlaes' "The Forgotten Man" brought the case home. Shlaes starts at Coolidge and Hoover and traces the roots of the Depression to the polices of the 1920s. On the way, she dispels the myth that the 20s were just a bubble. Actually, there was real progress--for example, widespread electrification--that was reflected in the stock market. The person who actually fares the worst in her book is Hoover. It was Hoover who had accomplished so much that he thought he could plan the economy. Hoover signed the disatrous Smoot Hawley bill to increase tariffs (Remember that the Republican party was the party of high tariffs.) Hoover is a great example of what I consider a fundamental truth--if you take really smart people who are really well intentioned and give them enough power....they will kill 70 million people.
The Depression was made much worse by the Federal Reserve Boards' disastrous reductions in the money supply. Each period of American history has its own monetary history and I've read about all the major players--from Hamilton to JP Morgan--but they all served as bit players in someone else's biography. In The Money Men, Brands traces the history of the US banking system through the men who created it. The book provides a comprehensive and linear narrative of the monetary system that is much easier to understand than the glimpses you will get from other sources.
Speaking of Depressions, poor management of the money supply and government policies gone wrong, take a few days and read "On the Brink" by Bush's Treasury Secretary Hank Paulson, architect of TARP and the bank bailouts. On the Brink is the inside story of the financial collapse and it's a completely captivating story. Paulson's team was behind the curve the entire time. They never managed to slow the collapse and they have certainly made the system worse off in the long run. The more I read the book, the more certain I was that the ultimate collapse was just being pushed to higher levels. And as cynical as I am, even I was surprised at how tightly interwoven the highest levels of government and finance are.
I think the lesson of all of these books is that Keynsianian economics has been pushed to its extreme and it's a failure. Government intervention in the market place can be maintained for a while, but eventually the system collapses. It's been 20 years since the old "Japan is superior because Government and business work together" canard collapsed and Japan has been bouncing from one stimulus package to the next ever since. Their stock market is still less than half of what it was in 1988.
In "Rules for Radicals" Saul Alinsky details the hardball guerrilla tactics he used as a community organizer in Chicago. Some of the tactics--like protesting at shareholder meetings--are so worn out that they are no longer effective. However, a lot of his basic principles--freezing the target, mocking your adversaries, personalizing policy disputes--are valid today. In fact, those tactics form the "Chicago Style" playbook that is so evident in the Obama Administration. Alinsky talks about the efforts to unionize the auto and mining industries, and details some of the tactics he used to demonize their leaders.
In a really fun pairing, I followed up Alinsky's book about unionizing the auto industry with "Crash Course"--which provides a history of the American Automobile industry from its inception to its union dominated downfall. Many of Alinsky's tactics are obvious, but the victories of his progeny were Pyrrhic indeed.
Warren Buffet is everyone's favorite billionaire and I really enjoyed "Snowball." There are plenty of good lessons, but I especially enjoyed the work ethic, intellectual capacity and willingness to take risks that he displayed in his early life. Another good lesson is that everyone assumes that Buffett made a bunch of investments and they all did well. That's not the case. He had a lot of investments that really flopped and a lot of investments that did REALLY well...and the average turned out to be high. That's why politicians are so foolish to complain about companies making "windfall" profits. Sure, sometimes companies are well positioned and make a lot of money very quickly, but usually, this simply makes up for the dogs in their portfolios, or the losses they endured in other years.
Unfortunately, my image of Buffett was also somewhat tarnished by the book. He makes a lot of money based on Government policies. The life insurance that he sells is excluded from estate taxes, and more importantly, many of the companies he buys had to be liquidated in order to pay estate taxes. Yes, Buffett wants higher taxes, but he's already made his money. The rich always want to tax the competition. If Atlas Shrugged were written today, Buffett might start out as one of the good guys, but by the end he would just be one more industrialist who found it easier to have the Government bend the rules in his favor.
I like books that provide histories of daily life. History is too often told from the perspective of generals and emperors and not often enough told from the perspecitive of farmers and sailors. "Salt" was one of the books I enjoyed most this year. Don't confuse it with the movie; Angelina Jolie has no role in the book.
I always viewed salt as a seasoning, but for most of history, salt was a preservative. From the dawn of mankind to a few years ago, the only way that humans could preserve food was by salting it. The books details the types of food that are created by salting and the history of obtaining salt--which is a lot harder than it seems. Most of us know that Roman soldiers were paid in salt, and we've all heard the expression "worth his salt." Indeed, the work "salary" is derived from the latin word for salt. None of that makes sense unless you understand the history of ancient food production and the salt production that made it possible.
If you are looking for a history of daily life among extraordinary people, I think you will enjoy Simon Winchester's "The Meaning of Everything." It's a great story of the creation of the first Oxford English Dictionary--a task much more monumental than anyone envisioned at the time. The work--and the men and women who produced it--is simply astonishing. One scholar who provided information on the source words pointed out that after you've learned your first 10 or 12 languages, they come pretty easily.
Two more books that provide slice of life histories are Blink and Outliers. Frankly, I think Gladwell's work is seriously overrated. He puts a bunch of interesting studies and stories together into a lose narrative that kind of moves towards a common theme and eventually it's a book. The stories, however, are pretty interesting and last year I enjoyed Tipping Point, and this year I enjoyed Blink and Outliers. The point--to the extent there is one--in Outliers is interesting. Gladwell points out that success is often random and always takes hard work. Neither of these are much of a surprise, but they make for fun reading.
I enjoyed two business histories that I think you might like as well. "Gallo be thy Name" is a remarkable history of the Gallo family. The Gallo's almost single handily invented the American wine industry. They created the demand and then invented the products that met that demand. Sure, the name is synonymous with cheap wine, but that was the market. As you read the book you will see their marketing genius. They invented the wine cooler market and created "Bartles and James" to capitalize on it. They also created Ripple and Thunderbird--and in so doing, cheapened the Gallo name so much that to this day, you will see Gallo's name on very few of its products. It's a great story of risk, creativity and genius.
Another history that I enjoyed was the history of the Rockefeller family. I've read Chernow's "Titan" about the rise of John D. Rockefeller, but I hadn't really followed the family. This biography gives a quick overview of John D then his son, John Jr. then Junior's five kids--which includes Nelson--followed by the 40 or so kids referred to as "the cousins." Wow, what an interesting story. There's nothing that destroys a family like money. Junior did fine, and the five brothers were OK, but the Cousins are complete basket cases.
If you want to read an extraordinary story about one person making a tremendous difference, read "Mountains Beyond Mountains". The story about Paul Farmer's efforts to bring quality health care to Haiti is truly stunning.
I don't have a lot of patience for fiction, but I try to read one fiction book each year. Last year's fiction book was "Replay." It's a great book for middle aged men and I continue to recommend it. This year, I read Starship Troopers. The movie is better than the book. However, the action in the book is really a vehicle for Heinlein to present his Libertarian theories of government and the role of people within that government. Some of those theories are actually well presented in the movie, but naturally, to book goes into a lot more detail. Many of Heinlein's points are as valid now as when he recorded them in 1952.
If you want to learn the techniques that Jason Rose seems to know by instinct, you will have fun with Guerrilla Marketing 2.0. It's a fun little follow up on the original Guerrilla Marketing, with updates for the digital age. One of my law school professors told me that professors were being advised to stop writing Law Review articles and start blogging. I think he was right. Guerrilla Marketing 2.0 has excellent suggestions along that line.
In "Who says Elephants can't Dance?" Louis Gerrstner recounts his extraordinary efforts to turn IBM around. It's a great case study, and I've lived most of it...In college, I programed in COBOL on IBM Punch cards and typed my papers and an IBM Selectric typewriter. (It was SO cool that you could switch to Italics just by changing the type ball). Gertzner took over IBM after the fat lady had sung and the audience had gone home, but he managed to completely restructure an obsolete and moribund company and make it nimble and successful. The title is appropriate, he really took and elephant and made it dance. The book has great lessons on organizational management and leadership.
I leave you with "Unthinkable". A former Time magazine reporter interviewed disaster survivors as well as experts to find out how--and why--people react in disasters. The answers are surprising. Most people are docile until death. Panic is rare, and so is action. She recounts the story of a ball room fire, in which a table had six corpses in their original seats. She tells of 9/11 survivors who took over an hour to evacuate their floor. The key however, is that one person can break the spell. One person who thinks clearly and who is willing to risk looking foolish can save and entire floor of a building or the entire population of a town. The lesson is clear--be that person. Have a plan. Take a risk. You need to tell yourself that you are the person who pulls the alarm. You are the person who tells everyone to get up and get out. You are the person who is willing to point out that there's a problem. We are herd creatures. We don't like to stand out. We don't want to be embarrassed. We assume that since everyone else is acting normally, then we must be the only one who smells the smoke. That's how large groups of people die. They need one person who's not afraid. One person can stand up and make a difference.
Be that person.
It's been a great year. Thank you for your support and readership.