Book Bits | 6 July 2019

American Bonds: How Credit Markets Shaped a Nation
By Sarah L. Quinn
Summary via publisher (Princeton U. Press)
Federal housing finance policy and mortgage-backed securities have gained widespread attention in recent years because of the 2008 financial crisis, but issues of government credit have been part of American life since the nation’s founding. From the 1780s, when a watershed national land credit policy was established, to the postwar foundations of our current housing finance system, American Bonds examines the evolution of securitization and federal credit programs. Sarah Quinn shows that since the Westward expansion, the U.S. government has used financial markets to manage America’s complex social divides, and politicians and officials across the political spectrum have turned to land sales, home ownership, and credit to provide economic opportunity without the appearance of market intervention or direct wealth redistribution.

VC: An American History
By Tom Nicholas
Review via The Wall Street Journal
In June 2000, in a transaction long forgotten, an online pet-supply retailer called, famed for commercials featuring a sock-puppet dog, acquired a competitor, was backed by Hummer Winblad, a venture-capital firm in San Francisco; a young Seattle company called also held a substantial stake. The merger with fixed nothing. Five months later, was defunct (although its domain name is still in use). In a history of the turn-of-the-century dot-com boom, its brief life and unmourned death would barely merit a mention—save for the fact that government policy supported its creation.
The question of whether the venture-capital industry creates any social benefit looms over Tom Nicholas’s “VC: An American History.”

How to Reform Capitalism
By Alain de Botton
Summary via publisher (The School of Life)
It is normal to feel frustrated and sad about aspects of modern capitalism. At the same time, realistic hope of change can seem either utopian or demented. In fact, the way that capitalism works is inherently open to alteration and improvement. This is because the problems of capitalism are, in their essence, not about money, law, or politics, but about human psychology – the field of expertise of The School of Life. As this bold essay argues, the path to a better sort of capitalism starts with a clear-eyed understanding of our emotional functioning and the workings of our psyches. What follows is nothing less than a blueprint, revolutionary yet utterly practical, for a wiser and better kind of capitalism.

From the Global Financial Tsunami to the Property Bubbles in Asia: The Need for a New Discipline on Macroeconomic Management
By Paul Sau-Leung Yip
Summary via publisher (World Scientific)
This book discusses the formation of the current huge property bubbles in many Asian economies and the high likelihood of another Asian financial crisis due to the eventual bursting of these property bubbles. In view of the huge costs due to the macroeconomic policy mistakes in many developing economies and some advanced economies, this book recommends the development of a new economic discipline on macroeconomic management and rigorous selection procedures of key economic and monetary officials. If properly done, these would help pre-empt financial crises, currency crises and asset bubbles in the future.

The Last Bluff: How Greece came face-to-face with financial catastrophe & the secret plan for its euro exit
By Viktoria Dendrinou and Eleni Varvitsioti
Excerpt via Bloomberg
The top-secret plan had been filed away in 2012, the previous time Greece had teetered on the edge of default. It was code-named “Croatia’s Accession to the European Union” to disguise that it was a doomsday scenario for the country farther south. Any hint it even existed would have sent Greece deeper into crisis, spooked financial markets, and shaken confidence in the euro itself. Then in early June 2015 a fresh round of default negotiations seemed to be at an impasse. Not till negotiations ended on July 13, 2015, did the EU and Greece agree to a third bailout. In the meantime, the EU’s preparations for catastrophe continued, as detailed in this excerpt adapted from Viktoria Dendrinou and Eleni Varvitsioti’s book, The Last Bluff.

Gresham’s Law: The Life and World of Queen Elizabeth I’s Banker
By John Guy
Review via The Guardian
Guy’s handling of this story offers an often vivid picture of the private world in which Gresham moved. But it is difficult not to feel that, when it comes to discussing Gresham’s career, he is thwarted by the aridity of his subject’s profession, as when he (almost comically) alerts us to the revelation that Gresham’s journal is (steady yourself) “the earliest example from anywhere in the British Isles of double-entry book-keeping”. Equally difficult to ignore is the relentlessly cliched texture of Guy’s prose: “The fact that she received his letter in stony silence should have sounded alarm bells”; “he was exhilarated by the sheer cut and thrust of the markets. He had his finger on their pulse”.

Presidential Misconduct: From George Washington to Today
By James M. Banner
Review via Kirkus Reviews
An update to the 1974 report Responses of the Presidents to Charges of Misconduct, examining the ethical conduct of the presidencies since then—including Richard Nixon’s but not Donald Trump’s.
Compiled with the same urgency as the previous study in response to “a grave threat” of constitutional crisis (unnamed but understood), this work offers a comparative gauge on executive misdeeds, rigorously defined as “responses of the president, on his part or on the part of his subordinates, to charges of misconduct that was alleged to be illegal and for which offenders would be culpable.” Editor Banner (Being a Historian: An Introduction to the Professional World of History, 2012, etc.) contributed to the original report. Restrained, “self-contained,” and offering the facts without interpretation, the essays—up to Nixon’s, they are the versions originally published in 1974—make for rather dry but informative reading.