Category: Books

Books that we read and our thoughts about them.

Book Review: Crashed

In Crashed: How a Decade of Financial Crises Changed the World (Amazon,) Adam Tooze gives us a chronological, blow-by-blow account of the 2008 Global Financial Crisis (GFC) and its after-effects.

As a financial history buff, I found the book fascinating, albeit a tad tedious with the details. It also reinforced my belief that you cannot take the politics out of the political-economy – i.e., the study of economics cannot be divorced from politics.

With prices accelerating toward annual increases of 14 percent in 1979, Volcker and the Fed decided that it was time to apply the brakes.

In June 1981 the prime lending rate touched 21 percent.

The result was to send a shuddering shock through both the American and the global economies. The dollar surged, as did unemployment. Inflation collapsed from 14.8 percent in March 1980 to 3 percent by 1983. In Britain this was the crisis with which the Thatcher government began. In Germany it would contribute to Schmidt’s unseating and his replacement by the conservative government of Helmut Kohl. France’s Socialist government under President François Mitterrand would be forced into line in 1983.


The Chinese model gets a fair amount of ink and it helped fill some of the gaps I had in my understanding of how the Party, Policy and Politics are intertwined, local vs. central political power, etc.

The book also highlights the all too familiar role of bumbling researchers with errors in the models that unleash large social movements that lasts years after the corrigendum is published. Reinhart and Rogoff’s “Growth in a Time of Debt” lead to painful austerity in England, debt brakes in Germany and birthed the Tea Party in the US. No one wanted to hear later that the analysis was riddled with errors.

Recommendation: Skim.

Book Review: Merchants of Doubt

In Merchants of Doubt: How a Handful of Scientists Obscured the Truth on Issues from Tobacco Smoke to Climate Change (Amazon,) authors Oreskes and Conway describe how the Big-Tobacco’s efforts to obfuscate evidence against smoking founded an entire industry dedicated to spreading FUD against science.

History shows us clearly that science does not provide certainty. It does not provide proof. It only provides the consensus of experts, based on the organized accumulation and scrutiny of evidence.

There are always uncertainties in any live science, because science is a process of discovery.

The inherent uncertainties involved in the scientific exploration of a topic provides the opening for the Merchants of Doubt. By highlighting these uncertainties and engaging in relentless campaigns of doubt-mongering, these MoDs have twisted the scientific process and created an anti-science brigade.

With the rise of radio, television, and now the Internet, it sometimes seems that anyone can have their opinion heard, quoted, and repeated, whether it is true or false, sensible or ridiculous, fair-minded or malicious. The Internet has created an information hall of mirrors, where any claim, no matter how preposterous, can be multiplied indefinitely. And on the Internet, disinformation never dies.

Is it any wonder that there are people who still believe that the Earth is flat?

Recommendation: When you read this book along with This Is Not Propaganda, you’ll want to kill-off all social media/messaging companies and see yourself agreeing with the basic plot of Utopia. So, avoid, to preserve sanity.

Book Review: Trade Wars Are Class Wars

In Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace (Amazon,) authors Matthew Klein and Michael Pettis argue that a handful of elites have captured the financial benefits of open global trade and finance. This has caused a global savings glut and a hunt for safe assets that has resulted in a series of boom-busts in American asset prices and an hollowing-out of its manufacturing base. These underlying income and wealth inequalities have manifested themselves as trade wars.


Trade war is often presented as a conflict between countries. It is not: it is a conflict mainly between bankers and owners of financial assets on one side and ordinary households on the other—between the very rich and everyone else. Rising inequality has produced gluts of manufactured goods, job loss, and rising indebtedness. It is an economic and financial perversion of what global integration was supposed to achieve.

America’s openness to international trade and finance means that the rich in Europe, China, and the other major surplus economies can squeeze their workers and retirees in the confidence that they can always sell their wares, earn their profits, and park their savings in safe assets.

The world’s rich were able to benefit at the expense of the world’s workers and retirees because the interests of American financiers were complementary to the interests of Chinese and German industrialists. Both complemented the interests of the wealthiest throughout the world, even from the poorest countries.

The book is an easy read and anyone who is interested in understanding the current macro environment should read it.

Recommendation: Read it Now!

Book Review: Range

In Range: Why Generalists Triumph in a Specialized World (Amazon,) David Epstein write about how people with a wider array of skills and experience end up having a larger impact on society than people who go deep.

There are certain domains that are kind learning environments, like chess or golf, where patterns repeat over and over, and feedback is extremely accurate and usually very rapid. A learner improves simply by engaging in the activity and trying to do better. In wicked domains, like investing, the rules of the game are often unclear or incomplete, there may or may not be repetitive patterns and they may not be obvious, and feedback is often delayed, inaccurate, or both. In the most devilishly wicked learning environments, experience will reinforce the exact wrong lessons.

The story of why Stanley Druckenmiller was appointed the director of equity research in 1978 at the age of only 25 comes to mind. Speros Drelles, the director of investments, demoted Stanley Druckenmiller’s boss after his boss having been with the bank for over 25 years and was approximately 50 years old. [‘You know why I’m doing this, don’t you?’ –Speros Drelles] No. [‘For the same reason they send eighteen-year-olds into war.’ –Speros Drelles] Why is that? [‘Because they’re too dumb to know not to charge. The small cap [capitalization] stocks have been in a bear market for ten years, and I think there’s going to be a huge, liquidity-driven bull market sometime in the next decade. Frankly, I have a lot of scars from the past ten years, while you don’t. I think we’ll make a great team because you’ll be too stupid and inexperienced to know not to try to buy everything. That other guy out there [referring to Stanley Druckenmiller’s boss who he was just replacing] is just as stale as I am. (source)

One of my favorites from the book is this quote from Steven Levitt: “admonitions such as ‘winners never quit and quitters never win,’ while well-meaning, may actually be extremely poor advice.” Levitt identified one of his own most important skills as “the willingness to jettison” a project or an entire area of study for a better fit.

To solve tough problems, go wide rather than deep. And don’t hesitate to kill your darlings.

Recommendation: Skim.

Book Review: This Is Not Propaganda

In This Is Not Propaganda: Adventures in the War Against Reality (Amazon,) Peter Pomerantsev lays out how the very tools that “democratize” information has been turned against democracy itself.

We live in a post-fact world where we are caught in a social-media driven doom-loop:

Social media is a sort of mini-narcissism engine that can never quite be satisfied, leading us to take up more radical positions to get more attention. It really doesn’t matter if stories are accurate or not, let alone impartial: you’re not looking to win an argument in a public space with a neutral audience; you just want to get the most attention possible from like-minded people.

It’s a lamentable loop: social media drives more polarised behaviour, which leads to demands for more sensationalised content, or plain lies. ‘Fake news’ is a symptom of the way social media is designed.

Social media technology, combined with a world view in which all information is part of war and impartiality is impossible, has helped to undermine the sacrosanctity of facts.

Peter Pomerantsev in This Is Not Propaganda

The book came out in 2019 and my personal experience has been that things have become worse. We now have WhatsApp groups where people self-select to receive the version of truth they desire. Political parties have setup up hundreds of such groups to make sure that we always hear what we want to hear.

While it is easy to blame social-media and messaging apps for the current state of polarization, traditional media has also embraced the post-fact world.

About The New York Times, for example:

Under Sulzberger, “there has been a heavy investment in the growth of opinion at the Times,” the journalist continued, noting that Bennet is a friend. “That was something that A.G. wanted and approved, because it drives their subscription strategy. New York Times readers like to read opinions—especially opinions that align with their own—and they increasingly don’t like to read opinions that don’t align with their own.”

The Daily Beast

We often don’t appreciate what we have and take the current state of the world as granted. However, democracy, freedom and progress are all recent occurrences. For the the vast majority of human history, monarchy, serfdom and stagnation was the norm. If we can’t even be bothered to be informed, do our choices mean anything? Before we know it, we’ll be back to the dark-ages.

Recommendation: Worth a read.