Book Bits For Saturday: 8.27.2011

The Euro: The Battle for the New Global Currency
By David Marsh
Review via Global Financial Strategy
With the euro saga playing out almost like a Shakespearean tragedy in Brussels, Berlin and Paris, it is good to get a clearer perspective on the origins, miscalculations and inherent problems at the heart of the eurozone’s birth. Fortunately enough, the Mutterer is now reading the second edition of a highly insightful account by David Marsh, co-chairman of Official Monetary and Financial Institutions Forum, ex-European editor for the FT, and GFS contributor. Financier George Soros has described the contents as “the stuff of a political thriller” no less. “When David Marsh first wrote his book, I thought that some of his theses were exaggerated. In fact, he foresaw many of the problems that have since befallen the euro,” says Soros.

Breaking the Fear Barrier: How Fear Destroys Companies from the Inside Out, and What to Do About It
By Tom Rieger
Interview with author via The Business Insider
The biggest threat to an organization’s success isn’t necessarily the competition — often, it’s the fear that lives within its own walls. That fear leads to all sorts of problems and causes people to believe that they need to create walls and barriers to protect themselves, even though those walls and barriers make it harder for others in the organization to succeed. And it’s that dynamic — how fear creates barriers and bureaucracy and how you can get to the root of fear and overcome it — that the book is meant to address.
Beauty Pays: Why Attractive People Are More Successful
By Daniel S. Hamermesh
Review via University of Texas at Austin
Good-looking people are generally happier than their plain looking or unattractive counterparts, largely because of the higher salaries, other economic benefits and more successful spouses that come with beauty, according to new research from economists at The University of Texas at Austin.
The Darwin Economy: Liberty, Competition, and the Common Good
By Robert H. Frank
Summary via publisher, Princeton University Press
Who was the greater economist–Adam Smith or Charles Darwin? The question seems absurd. Darwin, after all, was a naturalist, not an economist. But Robert Frank, New York Times economics columnist and best-selling author of The Economic Naturalist, predicts that within the next century Darwin will unseat Smith as the intellectual founder of economics. The reason, Frank argues, is that Darwin’s understanding of competition describes economic reality far more accurately than Smith’s. And the consequences of this fact are profound. Indeed, the failure to recognize that we live in Darwin’s world rather than Smith’s is putting us all at risk by preventing us from seeing that competition alone will not solve our problems.
Engineering the Financial Crisis: Systemic Risk and the Failure of Regulation
Summary via publisher, University of Pennsylvania Press
One of the lasting legacies of Reaganomics is a deep-seated distrust of government intervention in the markets. Despite this still-popular sentiment, the Basel Accords, a set of international standards for banking supervision and regulation, have been the subject of remarkably little public criticism. While academics and practitioners decry the enforcement of the Sarbanes-Oxley Act on accounting reform or attempts by Congress to regulate executive compensation, the Basel Accords have been quietly accepted. In one of the first studies critically to examine the Basel Accords, Engineering the Financial Crisis reveals the crucial role that bank capital requirements and other government regulations played in the recent financial crisis. Jeffrey Friedman and Wladimir Kraus argue that by encouraging banks to invest in highly rated mortgage-backed bonds, the Basel Accords created an overconcentration of risk in the banking industry. In addition, accounting regulations required banks to reduce lending if the temporary market value of these bonds declined, as they did in 2007 and 2008 during the panic over subprime mortgage defaults.