Book Bits | 9 January 2016

The Rise and Fall of American Growth:
The U.S. Standard of Living since the Civil War

By Robert Gordon
Review via The Wall Street Journal
In his new book, “The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War,” Northwestern University economist Bob Gordon argues that the century between 1870 and 1970 was exceptionally good for U.S. households (particularly 1920 to 1950) but that the years since 1970 have been disappointing and the future looks disappointing too.

Invest With The House: Hacking The Top Hedge Funds
By Meb Faber
Review via
You may already know that money managers with more than $100 million in assets under management are required to report stock holdings every quarter. But Meb Faber, co-founder and chief investment officer of Cambria Investment Management LP, has written a new book that not only explains how to get that information, but uses data going back to 2000 to analyze the performance of 20 well-known and very successful investors or investor groups, including Berkshire Hathaway Inc. BRK.B, +0.29% CEO Warren Buffett and his partner, Berkshire Vice Chairman Charlie Munger.

The Confidence Game: Why We Fall for It . . . Every Time
By Maria Konnikova
Review via Psychology Today
Konnikova also debunks the folklore about our capacity to detect deception. Gaze aversion, nervousness, fidgeting, flushing, hemming and hawing may fit our preconceptions of how liars behave, but these behaviors and lie detector tests are not reliable indicators of deceit. In one study, in which over 15,000 subjects watched video clips of people either lying or telling the truth, only 55% identified the honest individual. Alas, then, there is “no Pinocchio’s nose.”

The Last Safe Investment: Spending Now to Increase Your True Wealth Forever
By Bryan Franklin Michael Ellsberg
Summary via publisher (Portfolio Penguin)
Myth: If you save for decades and invest in 401(k)s, IRAs, and a home, these investments will grow steadily, allowing twenty to thirty years of secure, peaceful retirement.
Reality: Though this might have been true at some point in the last century, it is not true any longer. If you want to get ahead and enjoy a life of prosperity, you must invest in the last safe investment: yourself, and your own skills, value to others, relationships, and overall happiness.
Business strategist Bryan Franklin and author Michael Ellsberg (The Education of Millionaires) team up here to present a blueprint for building “True Wealth”: the ability to generate not just financial value but also the experiences you cherish most—security, freedom, creative ex­pression, and love.

Capitalism: A Short History
By Jürgen Kocka
Summary via publisher (Princeton University Press)
In this book, one of the world’s most renowned historians provides a concise and comprehensive history of capitalism within a global perspective from its medieval origins to the 2008 financial crisis and beyond. From early commercial capitalism in the Arab world, China, and Europe, to nineteenth- and twentieth-century industrialization, to today’s globalized financial capitalism, Jürgen Kocka offers an unmatched account of capitalism, one that weighs its great achievements against its great costs, crises, and failures. Based on intensive research, the book puts the rise of capitalist economies in social, political, and cultural context, and shows how their current problems and foreseeable future are connected to a long history.

What Your Financial Advisor Isn’t Telling You: The 10 Essential Truths You Need to Know About Your Money
By Liz Davidson
Review via Publishers Weekly
Davidson, founder and CEO of Financial Finesse, a financial education company, provides an informative, easy-to-understand guide to what to look for when contemplating financial options. Offering cautionary stories of inexperienced financial planners and investors, she warns that financial advisors often fail to share important information with clients. To remedy that, she gives research-based advice on 10 topics. One is to take advantage of the greatest financial resource available to many people, namely employer-provided services: matching 401(k) funds, free legal services, and health insurance, among others.

Economics versus Reality: How to Be Effective in the Real World in Spite of Economic Theory
By John M. Legge
Summary via publisher (Transaction)
John M. Legge shows the many ways in which the real world diverges from economics textbooks. He argues that mainstream economic theory took a disastrous turn 140 years ago, when it attempted to use calculus to explain human behavior. A real economy involves people who are not variables in equations. This error led to a second, mainstream economics becoming obsessed with equilibrium. However, constant change is the reality and one cannot explain the present without understanding the path taken to get here.

The Geography of Genius: A Search for the World’s Most Creative Places from Ancient Athens to Silicon Valley
By Eric Weiner
Review via The Miami Herald
In The Geography of Genius, Weiner… is fun and thought provoking and often self-deprecating (he begins by explaining exactly why he has never been a genius). But this isn’t a cocktail party of a book. Weiner, also author of The Geography of Bliss, sets out to find the magic sauce that explains why “certain places, at certain times produced a bumper crop of brilliant minds and good ideas.”
What sets Athens of 450 BC apart from Wichita of last year? Why didn’t Silicon Valley spring up in the Rhine Valley? In looking for the unique aspects of certain places and times that produced an unusual number of geniuses, Weiner delves into the scientific research on creativity, exploring questions like whether teaching creativity or creating a culture of creativity is possible. He relies heavily on anecdotes and observations to explain the particular zeitgeist of genius times.