To look back at the books produced in the beginning of 2008 is to glimpse a more innocent world, an Eden seemingly free of financial crisis and the impending gloom of 2009. But by spring the first of the bad news reads had appeared. Regardless of the season, numerous valuable works were published in 2008, including a few that understood the sad shape of things to come.
One of the best is former banker Charles R. Morris' The Trillion Dollar Meltdown (PublicAffairs), which explains what happened and why in under 200 pages. Morris traces the U.S. credit madness to the rise of the Chicago School's free-market capitalism and he identifies resulting trends that created the bubble, including the illusion in the minds of portfolio managers that risk can be evaded. He fears the U.S. economy is in decline but says things could improve with proper leadership.
Too depressed to read any more about the financial crisis? There are plenty of other topics in our annual list of the year's top business books.
Alice Schroeder's The Snowball: Warren Buffett and the Business of Life (Bantam) evinces years of research and unprecedented access to its subject. Buffett's secret: focus. "He ruled out paying attention to almost anything but business," says the author, including "art, literature, science, travel, [and] architecture." Schroeder also provides a vivid picture of the Buffett family, including the investor's two wives and his inflexible father. "The Snowball is an astute, and at times riveting, read—especially now," wrote reviewer Amy Feldman.
Another finance title whose subject is much in the news is The Partnership: The Making of Goldman Sachs(The Penguin Press) by strategy consultant Charles D. Ellis. The author provides a wealth of colorful detail: For example, here are Treasury Secretary and former Goldman Chief Executive Henry Paulson and Jon Corzine, the former co-CEO and now New Jersey Governor, squabbling "like teenaged kids," in the words of one colleague. The Partnership is a juicy, vivid chronicle.
A very different corporate saga is found in Hell's Cartel: I.G. Farben and the Making of Hitler's War Machine (Metropolitan Books) by Diarmuid Jeffreys. Farben, pulled together in the 1920s from a number of separate companies, embodied many of the qualities we admire in business. But the company had a history of moral compromises, and by the '40s it was at the center of the Nazi nightmare. "Jeffreys expertly chronicles how this once-proud company descended into the abyss," said reviewer Jack Ewing.
Behavioral economics is a major trend, and one of the more successful recent works in the genre is Predictably Irrational: The Hidden Forces That Shape Our Decisions (HarperCollins) by Massachusetts Institute of Technology economist Dan Ariely. The author illustrates his thesis—that real people are impulsive, short-sighted, and far from coldly rational—with ingenious experiments. The book is "an entertaining tour of the many ways in which people act against their best interests," noted reviewer Peter Coy.
Equally intriguing is Michael Heller's The Gridlock Economy: How Too Much Ownership Wrecks Markets, Stops Innovation, and Costs Lives (Basic Books). The Columbia University law professor explores how fragmented property ownership—whether in land, intellectual property, or the broadcast spectrum—too often allows people to block each other from optimizing a scarce resource.