5 great reads

Mark Twain says, "The man who doesn't read good books has no advantage over the man who can't read them." In that spirit, here are five great books I've read lately that you should read, too.

1. The Half-Life of Facts: Why Everything We Know Has an Expiration Date
Samuel Arbesman
Anyone who reads a lot on the Internet knows that facts are second-class citizens to hyperbole, rumor, and flat-out wrongness. But what's more alarming is that so much of what we once thought were scientific facts end up being disproved. Textbooks used to teach that a human cell had 48 chromosomes. More than one-third of all animals once classified as extinct are later rediscovered. Depending on the field, huge numbers of studies once considered "groundbreaking" can't be reproduced in subsequent trials. "Medical knowledge about cirrhosis or hepatitis takes about forty-five years for half of it to be disproven or become out-of-date. This is about twice the half-life of the actual radioisotope samarium-151," Arbesman writes.

This book will change your perspective about nearly everything you read, regardless of the subject.

2. The Quest: Energy, Security, and the Remaking of the Modern World
Daniel Yergin
Yergin won a Pulitzer Prize for his first book, The Prize. The Quest follows up with what I am convinced is the most detailed-yet-readable summary of how global economies find, secure, and maintain energy ever written. It is an utter tome at more than 800 pages, but you'll hardly notice; it's a thrill to read.

Here are a few things I learned from The Quest:

• Even though America hasn't built a new nuclear power plant in three decades, nuclear energy output has nearly doubled, as average operating capacity has jumped from 55% in 1980 to 90% today. "That improvement in operating efficiency is so significant in its impact that it can almost be seen as a new source in electric power itself," Yergin writes.
• "86 percent of oil reserves in the United States are the result not of what is estimated at time of discovery but of the revisions and additions that come with further development." In other words, we don't necessarily need to find more oil. We just need to find new ways to extract more from what we already know we have.
• "In 2000 shale was just 1 percent of natural gas supply. By 2011 it was 25 percent, and within two decades it could reach 50 percent," Yergin writes.

Most important, I now realize that the appropriate answer to the question, "Why can't we just do [latest overly simplified energy idea]," is usually, "Because that costs a trillion dollars and would only supply a small fraction of what we actually need."

3. Here's the Deal
David Leonhardt
David Leonhardt is one of the most thoughtful and coherent economic writers of our time — you just might not recognize his name because he doesn't write much anymore.

Here's the Deal — a short e-book that will set you back $1.99 — lays the federal budget bare, exposing exactly what's causing our deficits, what poses the biggest risk to future deficits, and how we might address the nation's growing debt. He doesn't yell or spout ideology. He uses numbers.

"Eventually," Leonhardt writes, "the country will have to confront the deficit we have, rather than the deficit we imagine. The one we imagine is a deficit caused by waste, fraud, abuse, foreign aid, oil-industry subsidies and vague out-of-control spending. The one we have is caused by the world's highest health costs (by far), the world's largest military (by far), a Social Security program built when most people died by age 70 — and, to pay for it all, the lowest tax rates in decades."

4. The AIG Story
Hank Greenberg and Lawrence Cunningham
I'm interviewing former AIG (NYSE: AIG) chairman and CEO Hank Greenberg in a few weeks. In preparation, I read his new book, a memoir of sorts, co-written with Lawrence Cunningham.

For as much rightful anger and disrespect the letters "AIG" elicit, this book actually changed my view of the insurance giant. It's almost impossible to think about AIG today without mind-looping its failure. To many, the entire history of AIG starts and stops in September 2008, when it was bailed out. But in the decades before the housing bubble, it really was a remarkable company, growing from nothing into one of the world's largest and most efficient insurers, and becoming one of the first financial services firms to have a global footprint. Greenberg, who left the company before it doubled-down on housing, is still hopeful. "It may yet endure as one of the greatest American companies ever," he boldly (albeit biasedly) states.

The 2008 collapse isn't glossed over. Greenberg and Cunningham detail who they blame for the company's downfall. "Eliot Spitzer, an elected public prosecutor in New York, sparked the process that would drive AIG to near destruction," they write. Don't pretend you don't want to hear the rest of that story.

5. Family Fortunes: How to Build Family Wealth and Hold on to It for 100 Years
Bill Bonner
Bill Bonner is rich. He's also a good writer. The two combine for a book that is as entertaining as it is informative.

Thousands of books offer advice on how to become rich (most preposterously). Bonner begins from the point of view of a family that is already rich. He provides advice — from experience — on how to stay rich.

You yourself don't have to be rich to learn from the book. It's full of pithy wisdom applicable to mere mortals. For example:

• "If there is one thing that marks families with money over the long term it is this: delayed gratification."
• "As John D. Rockefeller put it, the way to success is 1) get to work early, 2) stay late, 3) strike oil."
• "You can have money by accident. You can have a family by accident. But you can't have family money by accident."
• "We don't want to beat the market. We just don't want to get beaten by it."

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