Holiday Gift Guide: Books

My reading this year has been somewhat over-concentrated on the Great Depression and financial crises, so I'm afraid that's what you're getting:  an eclectic set of books on what happens when money problems get really, really bad on a national level.

The Great Crash 1929 by John Kenneth Galbraith.  I know I've recommended it in earlier years.  The economics is more than a little iffy--when I asked one of my professors at Chicago which economic school Galbraith belonged to, he thought for a moment, then said "it's less of a school than a sort of conspiracy theory."  But Galbraith is one of the really great popularizers of economic history.  His writing is brilliant and witty, and while the theory may be overdone, the facts he presents offer some interesting parallels to our own time.  Plus I guarantee that your recipient will be entertained.  Also highly recommended:  his A Short History of Financial Euphoria.

The Return of Depression Economics by Paul Krugman.  In many ways, Krugman is the heir to Galbraith.  Krugman is not as brilliant a prose stylist as Galbraith, but he is a much better writer.  This, along with earlier books like Peddling Prosperity, should especially be read by conservatives who reflexively loathe everything the man writes.  He emerged as our era's finest popularizers of sound economics in the 1990s, and if I don't care for him as a political columnist, his ideas need to be engaged with by any serious economic wonk today.

Money Mischief by Milton Friedman.  For true wonks, go with Friedman and Schwartz's titanic Monetary History of the United States, or the smaller excerpt titled The Great Contraction which just covers the genesis of the great depression.  But this work, while fascinating, is very dry.  Money Mischief is delightful, and a great way to introduce lay readers to the inherent conundrums of money, and its role in our lives.

The General Theory of Employment, Interest and Money  by John Maynard Keynes.  A very challenging book.  Often impenetrable.  But if you are going to engage with his intellectual heirs, you should understand the seminal work to which Keynesianism traces its existence.  I wouldn't give it to Grandma, though.

Once in Golconda  Another history of the rise and fall of 1920s Wall Street, this one focusing more on personalities and tragic history, and less on broad economic forces.  It's a lesser known gem than Galbraith's Great Crash, but an absolutely compelling read.

Only Yesterday and Since Yesterday by Frederick Lewis Allen.  The first book was Allen's amused recollection of the transformation of America in the 1920s from staid Edwardiana to the Jazz Age.  The book is broad rather than deep, chronicling developments from the emergence of bridge, crossword puzzles, and Mah-Jongg, to Charles Lindburgh and the great Florida real estate bubble of the mid-1920s.  It's utterly charming, and gives you much more of a flavor of the life of the 1920s than most history.  Since Yesterday was the successor he wrote to cover the 1930s.  It lacks some of the charm of its predecessor, partly because the 1930s were not a charming decade, and partly because sequels are rarely as good as the originals.  But that means it is merely very good, rather than superb, and like the earlier book, it gives you a street level view of what was happening to ordinary Americans, rather than the serene bird's eye panorama you usually get.

The Great Depression:  A Diary by Benjamin Roth.  I absolutely cannot recommend this book highly enough to anyone who is interested in the Great Depression.  Not because it is the most glittering prose I have ever read, or the soundest economic text.  But rather, because it is one of the few books that offers a blow-by-blow account of the Great Depression through ordinary eyes.  Roth was a lawyer in Youngstown Ohio who decided to write down his observations of the financial panic in the early days, when people still expected it to be something like the recession of 1920, or the Panic of 1907.  It stretched on through ten years of anguish, as Roth describes what it is like to be unable to get hold of any cash, to see all the banks in your city fail, to try to provide relief when 20-30% of the town is out of work.  It is written without the hagiography, or the patina of nostalgia, that tends to envelop retrospective works.  Even if it was a less-well written book, it would still be worth reading. I'll be blogging excerpts from it in the New Year, because I found it so extraordinary.

Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay  the seminal work on financial bubbles.  The dense Victorian prose can be a bit formidable for the modern reader, but no collection on financial crashes is complete without it.

Manias, Panics and Crashes by Charles Kindleberger The 1978 book is the new classic, and regained a big following after the collapse of the stock market bubble.

And the Money Kept Rolling In . . . and Out By Paul Blustein  If you want to worry about someone else's financial crisis, try Argentina at the turn of the Millenium, as ably documented by the Washington Post correspondent.  Especially interesting to read now, because previously, I spent half the time wondering why the hell the government of Argentina couldn't do the obvious, necessary thing.  A year of watching our government flounder like a beached dolphin has given me much more insight into that core question.

Essays on the Great Depression by Ben Bernanke  Prior to becoming our Fed chair, Bernanke was one of our foremost scholars on the Great Depression--exactly the guy you'd want at the helm if you were going to have another go at financial hysteria.  It is impossible to read this book without a sort of eerie, haunted feeling, as Bernanke displays more confidence than I imagine he now feels that we can diagnose, and correct, the major errors of the period.  On the other hand, reading books like Roth's makes it crystal clear that we are not having a Great Depression, or anything like it, so on balance I'm still glad he's at the helm.  Particularly worthwhile reading for Bernanke-bashers; you may not like him any better at the end, but you'll have greater insight into his thinking.

The Grapes of Wrath  I imagine that most of you, like me, read this book once in eighth grade and didn't go back.  It's still flawed in all the ways that Steinbeck was flawed, but it's still great, in all the ways that he was great.

Lords of Finance  The dominant explanation of how the Great Depression came about is still monetary--we can continue arguing about whether more fiscal stimulus was or was not necessary, but most economists think that the monetary imbalances of the 1920s created a dangerous situation, and the monetary stupidity of the early 1930s exacerbated it.  If you want to know why things unfolded as they did, read this book, which tells the story of four of the world's most powerful central bankers.

This Time is Different: Eigth Centuries of Financial Folly by Carmen Reinhart and Ken Rogoff  Full disclosure:  I interviewed Kenneth Rogoff several times before this book came out, and found him incredibly persuasive, which may bias me towards the thesis that he and Reinhart develop:  namely that financial crises are inevitable and destructive.

I won't go over all the books that purport to explain the current crisis, so I'll just pull out three.  Andrew Ross Sorkin's Too Big to Fail is by far the most comprehensive account of everything. William D. Cohan's House of Cards was one of the earliest books on the crisis, and covers the lead-up to the Bear failure in great depth.  And Dave Wessel's book on the Fed's role in the crisis, In Fed We Trust, is absolutely must-reading.

Update:  Do not confuse books about the Great Depression with books that are depressing.  Most of the books are fascinating, not depressing, and the Frederick Lewis Allen books, Once in Golconda, Money Mischief, and The Great Crash are positively airy.