As we approach Christmas, we offer selections from Lowy Institute staff and Interpreter contributors for the best book they have read this year.
Political Amnesia: How We Forgot How To Govern, by Laura Tingle. Selected by Lowy Institute Nonresident Fellow Ric Smith.
Laura Tingle's engaging Political Amnesia: How We Forgot How to Govern argues that the manifest shortcomings of Australian government in recent years may be explained by a failure to remember and apply the lessons of the past.
For the public service, she attributes this largely to the 'reforms' of the nineties and since, and thus implicitly challenges the ideology that drove them. There's a lot in this thesis, but not it's a complete explanation. Even if the 'amnesia' were miraculously reversed, many of the problems of modern government in Australia would remain.
The Courage to Act, by Ben Bernanke. Selected by Lowy Institute Research Fellow Jonathan Pryke.
As Chairman of the US Federal Reserve from 2006 to 2014, Ben Bernanke was the most powerful player in the response to the Global Financial Crisis. In The Courage to Act he sets out an exhaustive account of how he wielded US monetary policy in bold and unorthodox ways to inject trillions into the US financial system. In his opinion it was only intervention of this scale and ambition that prevented the global economy from falling into a crisis that would have been worse than the Great Depression. And he's probably right.
Make no mistake, this memoir is a statement of legacy for Bernanke, so you won't find much self-doubt, criticism or acceptance of moral hazard in his account of the Fed and US government's response to the crisis. Still, you will find no better inside account from the absolute centre of the response to the crisis. Once you've finished with the book (or for those too time poor to get through it), Bernanke also provides a fascinating hour-long interview on the Freakonomics podcast, which includes him grading his own performance as Chairman both before and during the crisis.
Other People's Money, by John Kay. Selected by Lowy Institute Nonresident Fellow Stephen Grenville.
If you think the problems thrown up by the 2008 financial crisis have all been sorted, you might read John Kay's Other People's Money. This is not yet another take on the crisis as such, but is about how the financial sector works. He's an insider who certainly sees the benefit of markets: 'We need finance. But today we have too much of a good thing'. The proliferation of globally coordinated rules has been largely misdirected. The sector needs to shrink, with fewer rules and greater institutional simplicity.
If this whets your appetite, try the more radical version: Adair Turner's Between Debt and the Devil. Turner, former head of the UK Financial Services Authority, was the one who in 2009 said that some financial activity was 'socially useless'. He spells out this idea (and much more) in the book.