Shortlist For FT Business Book Award Short On Selections That Take On The Financial Crisis

In the wake of last year's economic meltdown, many Americans were left to wonder: "Uhm...how did this happen? What is a credit-default swap again? Too big to what, now?"

One would imagine that the totality of the crisis, combined with the widespread lack of knowledge of financial terminology among folks on Main Street who ended up bearing the brunt of these massive systemic failures, would spur the financial media to do a better job of informing the American people about the financial sector.

Well, to that end, the Financial Times has announced its shortlist for "Business Book of the Year"! On the awards main page, the FT says that "the six books together sum up what went wrong in the crisis and may provide a route map away from the error-strewn past." But do they? Before you take a guess, here's a clue: Goldman Sachs is the main sponsor of this book award!

In truth, a few tomes take a glancing shot at the margins of the crisis. Stephen Green's Good Value is called "a striking personal insight into money and morality." Frank Partnoy's The Match King is a historical account of Ivar Krueger, the Bernie Madoff of the 1920s. And In Fed We Trust, is rightly called a "'keenly observed' account of the build-up to last year's US banking crisis."

Liaquat Ahamed's insightful account, Lords of Finance: The Bankers That Broke The World, which takes a hard look at the crisis, makes the cut. But in the end, are there any books that really provide an economic analysis of the current situation?

Finally, this list would have felt lopsided without an economic analysis of the current situation. There were three on the longlist and Animal Spirits by George Akerlof and Robert Shiller won through. The authors launch proposals to rebuild the discipline following the realization that people and businesses are not the rational actors loved by orthodox market economists.

So, we have a bunch of books that basically take a stab at, "Wow! 2008! That was bad!" and one that explicitly sets out to urge a "rebuilding" of the "discipline" -- or the lack thereof.

Let me just offer up a contrasting list from Cardiff Garcia posted to The Big Picture last June. Ahamed, Akerlof, and Shiller make the cut. And since this is his website, it's not surprising that Barry Ritholz's Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy is on the list, too. The other selections include:

--Chasing Alpha: How Reckless Growth and Unchecked Ambition Ruined the City's Golden Decade, Philip Augar

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--Fool's Gold: How the Bold Dream of a Small Tribe at JP Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe, Gillian Tett

--Getting Off Track: How Government Actions and Interventions Caused, Prolonged, and Worsened the Financial Crisis, John Taylor

--House of Cards: A Tale of Hubris and Wretched Excess on Wall Street, William Cohan

--Lecturing Birds on Flying: Can Mathematical Theories Destroy the Financial Markets?, Pablo Triana

--The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street, Justin Fox

--Street Fighters: The Last 72 Hours of Bear Stearns, the Toughest Firm on Wall Street, Kate Kelly

I think that you readers can size up what you want to spend your free time reading for yourselves. But speaking as someone who doesn't want to get fooled again, and who genuinely believes that I have an obligation to do the best I can to keep readers informed and well-armed, I'm going to be cracking the spines of books on the latter list.

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Comments

[Jeff Kreisler - Huffpost Blogger]

What about "Get Rich Cheating: The Crooked Path To Easy Street"? I hear that's pretty good...

GET RICH CHEATING - A Boston Globe Bestseller
"You'll be laughing all the way to the bank, assuming other cheaters haven't forced it into bankruptcy yet." - Rachel Maddow
"Catcher in the Rye for evildoers" - Penthouse Magazine
"A very funny book with a very timely message." - Terry Jones (Monty Python)
"Laugh out loud - roaring!" - CNBC
http://GetRichCheating.com or http://tinyurl.com/ojfl3z

[RomeoMD25]

The global warming scam passed by Congress. Goldman Sachs is in the middle of it, as usual– a potential trillion dollar sure thing.

And Former Vice President Al Gore who will profit from the cap-and-trade plan through his company, Generation Investment Management,–
Gore is joined by three former Goldman Sachs heads in their carbon offsets business.

[petef59]

Literally speaks volumes about hubris within mainstream financial culture.

[blood1]

Now why in the world would anyone distrust Financial Times? Do you really think that these guys are in cahoots with those who are responsible...and therefore are promoting only those books that make Wall Street look like "innocents"? and the answer is: RESOUNDING YES.

Here is the story of a 5 year old getting caught doing something wrong and blaming the DOG!

Thanks Jason!

[thnk4selfagain]

"Goldman Sachs is the main sponsor of this book award!" Uhuh.

A book that distills the events round and causes of the meltdown has yet to come. Most of these seem to be a bit too specialized on one aspect or other to become widely read. Lacking a narrative (other than AIG) for the meltdown, just serves the financial sector's interests as Mr. Linkins suggests,

[Jacksonian]

Jason, if you had ambitions of becoming the next literary agent to Goldman Sachs shills, you may want to reevaluate your options.

[PPatt]

"The authors launch proposals to rebuild the discipline following the realization that people and businesses are not the rational actors loved by orthodox market economists."

I realize that logical actors in markets was the theory that so-called experts irrationally stood by even as our economy was hanging from a cliff by a fingernail. In retrospect this quote, describing a book that you thing deserved to make the cut, seems as ignorant as the others.

The actors all acted rationally in their own self-interest. Sure, there acting rationally in their own interest was not in our interest but we let them so maybe we are the irrrational ones who did not elect more proactive and intelligent leaders.

This entire rational/irrational dichotomy is a mushy false argument. Human nature is no mystery and when we listen to any group, however lauded or rish its members might be, the hair should stand up on the back of your neck when they start suggesting that they and they alone do not need "police"...or standards...or regulations.

Harrrumpphhh. The next thing you know they'll be telling us that checks and balances in our government are bad.

For those who still buy this irrational business I have some swampland for sale...

[Matrsnot]

Why would anyone need to read a book about why the economy failed? Look at congress over the last two years and see who voted to make freddie and fanny give up those mortages to people who coul not afford them!!

[TheMisanthrope]

They would want to read a book so they can learn. Instead of spouting off meaningless talking points, which clearly takes no effort or brainpower.

[breakingpoint]

Capitalism a Love Story

[TheMisanthrope]

This is the problem with the people in this country. While there's nothing wrong with Michael Moore, a documentary (with a comedic bent) is not a substitute for reading various viewpoints on a topic and actually learning. Until we stop allowing mindless media to dictate what we should know about the world there's not a chance that things will ever truly improve. Americans don't want more than a five-second soundbite. Americans don't want to read more than a headline, much less the full article or, heaven forbid, an entire book or two.

[venusvictrix]

Agreed, except for the part about mindless media. There are obviously plenty of celebrity-­journalist­s whose intellectual abilities are questionable, but I think they're employed by fairly astute, and very powerful media conglomerates who have a vested interested in keeping the public entertained and uninformed.

[greihing]

Your absolutely right about Americans not wanting to read a book for understanding. Not to paint them all with the same brush, but when you have 4 out of 10 Americans never taking the time to read (according to the book "The Dumbest Generation") you can only expect these people to be led by the nose.

[venusvictrix]

[venusvictrix]

Operative word: "story".

I'm sure it will be entertaining, as I've seen most of his other work. But it is a shame he didn't want to work a little harder and find out the real facts, especially given his visibility.

[Sean 6399]

Want to understand what happened?

Read "End the Fed" by Ron Paul.

[venusvictrix]

Excellent advice! I didn't even realize this was out.

I also recommend Robert D. Auerbach's Deception and Abuse at the Fed: Henry B. Gonzalez Battles Alan Greenspan's Bank.

Auerbach is a former banking committee investigator who spills the beans about the Fed's exploits in a very interesting and easy read. He also offers some suggestions at the end, including the necessity of subjecting it to Congressional oversight and GAO audits.

(And on a seemingly insignificant point, I was rather intrigued at the question he raises about the rigor of Alan Greenspan's doctorial research. I think the subject bears further investigation, in spite of the follow-up stories by Jim McTague of Barron's online. All known facts suggest Greenspan was "given" his PhD, rather than having "earned" it, which naturally leads one to wonder why he was appointed Fed Chairman in the first place.)

[poppysen]

FT is by the corporate thugs and for the corporate thugs. I have stopped subscribing FT and I feel free again.