2010 Books of the Year

The New York Times Book Review recently came out with its 2010 Books of the Year, and it is not surprising that my list didn't quite match up with theirs. It's not altogether easy for me to come up with a definitive list as I only get to read 25-30 books a year, but during 2010 there were some good ones. My reading is disproportiately nonfiction. Generally, to absorb and appreciate long, complex novels you have to devote large chunks of uninterrupted time to them, and that is hard to do with full time work, a spouse, children and all the other accoutrements of adult lilfe. Nonetheless, I did try my hand at some contemporary fiction this year and came up with a couple beauties. Here are my recommendations for the best books of the year in 2010.

NONFICTION

We are living in the aftermath of the worst financial catastrophe in a couple of generations, and I have gobbled up books on the topic. I read 13 Bankers, Too Big To Fail, In Fed We Trust, and a number of others (although I managed to miss The Big Short by Michael Lewis which received great reviews). It is not surprising that my nonfiction book of the year and runner up focused on this topic. My nonfiction book of the year was This Time Is Different by Carmen Reinhart and Kenneth Rogoff. This is a copiously researched book that studied financial panics across time. This is not an easy read. It overlays quantitative analysis and historical analysis, and its approach is very thorough. Of course, you need to be a bit of a data junkie to fully appreciate this book-- a degree from MIT or The University of Chicago is helpful. But if you can wade through it, you will have a much better understanding of how the U.S. financial system and economy ran into a wall. The punchline is that the kind of crisis we experienced is infrequent in U.S. history, but not uncommon worldwide. They follow certain patterns and take a long time to recover from. They show that, "banking crises almost invariably lead to sharp declines in tax revenues...on average, during the modern era, real government debt rises by 86 percent during the three years following a banking crisis." Sound familiar? And they eerily predict the next leg of this crisis, "In some cases domestic debt is eliminated through high inflation; in other cases, governments default on external debt." Any wonder why many economists are nervous about the current round of quantitative easing? Although laden with charts and graphs and data, This Time Is Different illuminated and put into context our current malaise, and it is deserving of my vote for nonfiction book of the year.

The runner up and a close second was Fault Lines by University of Chicago professor Raghuram Rajan. Fault Lines connects the dots between the widening gap between rich and poor in the U.S. and the financial meltdown. Rajan sees the radical loosening of credit and real estate boom as a deliberate attempt on the part of government to provide the appearance of an improving lifestyle in the face of stagnant and falling wages in lower income brackets. As the world bid up the wages of highly educated, highly skilled wages, it depressed those at the lower end. By liberalizing credit (and creating the housing bubble) through Fannie, Freddie, CRA and FHA, people at the lower end of the spectrum were able to improve their lot in life. Until the bubble burst. Rajan is true to is free market Chicago roots, "A forced equalization of wages that disregards the marginal contributions of different workers will deaden incentives and lead to a misallocation of resources and effort." However, Rajan does not marginalize government and is not blind to the strain on society and policymakers that the growing gulf between rich an poor is causing. He offers no magic bullets, but places a large emphasis on fixing our horrendous K-12 education system. Overall, Rajan presents an interesting synopsis of the roots of our current financial crisis and deserves to be one of the best books of 2010.

FICTION

My vote for fiction book of the year goes to David Mitchell's The Thousand Autumns of Jacob De Zoet. The book takes us to 1799 to a trading post of the Dutch East India company in Japan, and the tightly controlled and monitored intersection between East and West. While Japan permitted a limited amount of trade, it restricted the import of religion, culture and mores. The protagonist is a young clerk that seeks to build his fortune there, but gets tangled with a Japanese woman and the issues that cause friction between cultures. The book is richly textured, meticulously researched, and a joy to read. It also points out why the Kindle has not yet taken over my entire life. This book has a beautiful cover and binding and textured pages and reminds us that reading remains a sensual experience, even in the electronic 21st century. I highly recommend that for this one at least, you skip the Kindle version and buy the book.

My runner up in fiction is Man in the Woods by Scott Spencer. While it received mixed reviews generally, I liked it. I'm a sucker for stories that involve a life changing random event that you could easily see yourself responding in the way the protagonist does. In this case, the main character Paul Phillips stumbles upon another man with his dog while on a walk in the woods, and the man begins to brutally abuse his dog. Phillips intervenes and a fight ensues and in the scuffle, Phillips kills the dog abuser. Because Phillips knows that he cannot use self defense as a defense- he was defending the dog, he does not report the incident to the authorities. Man in the Woods reminded me of Deliverance-- the killer was morally justified in his actions, but the authorities probably wouldn't see it that way, and that sets up the tension that permeates the book. I liked Spencer's book very much, especially the nature writing and was one of the best books I read this year.

Happy Holidays, Happy New Year, and happy reading.