Category: Book reviews

Weekend Reading: Boys in the Boat

TheBoysintheBoat

Do you hate Hitler?
Do you like sports?

Then Boys in the Boat is a book to add to your “To Read” list.

In the middle of the Great Depression, Joe Rantz is a farmboy from the Pacific Northwest who was literally abandoned as a child and rarely had two pennies to rub together. He scrapes together the money to attend the University of Washington during the Great Depression. At school he joins a pack of strong, young men looking to make it onto the crew team.

It’s not going to be a surprise, but Joe makes the team. That’s just the first step. His crew needs to beat their rivals at Berkeley, then travel East to battle the rowing elites of the east coast. If his crew comes in first, then it’s off to Berlin to battle the Nazi’s crew for Olympic glory.

This is a tremendously enjoyable story, full heart, soul, and determination.

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Weekend Reading: War of the Whales

war of the whales

Dozens of beaked whales beach themselves in the Bahamas. This leads to a legal battle against the U.S. Navy. Joshua Horwitz details the story, scientists, the legal battle, and the science in  War of the Whales.

It’s an uphill battle when the other side is the most powerful fighting machine on the seas. It’s an even steeper hill when you realize nearly all of the experts are on the navy’s payroll.

For decades the navy has been studying marine mammals for their speed through the water and especially their echolocation. A beaked whale’s ability to locate object underwater far surpasses anything the navy can do with sonar.

But the navy does have power. If it can’t fine tune its reception, it can turn the volume up. Way up. 200+ decibels of power that appears to drive marine mammals right out of the ocean.

The book also shows the malignant problems of regulatory capture. The National Marine Fisheries Service is supposed to oversee the environmental impact of the navy. But fails to do much bur rubber stamp cursory navy reports.

Some of the key reports end up getting dumped during dead spots, just like corporate bad news filings with the Securities and Exchange Commission. One key report in the book that actually points some blame at the navy was filed at 5:30 on a Friday December 21, 2001, the last day of the federal work year and start of the Christmas weekend. There is no need to impose a media blackout, when all of the media are gone.

Weekend Reading: Trapped Under the Sea

trapped under the sea

If you’ve ever flown into Boston’s Logan Airport or stared out over the harbor, you likely noticed the dozen egg-shaped structures sitting out on Deer Island. Those are key components of the second largest sewage treatment facility in the United States. The construction of the outflow pipes from that facility is the key point in Trapped Under the Sea: One Engineering Marvel, Five Men, and a Disaster Ten Miles Into the Darkness by Neil Swidey.

The communities of Greater Boston had been dumping barely-treated and raw sewage into Boston Harbor since it was founded. Boston earned the unwanted honor of having the nation’s filthiest harbor. I Love that Dirty Water, but it was time to clean up. By federal and judicial mandate Massachusetts constructed the sewage treatment plant at Deer Island.

In addition to the treatment, the outflow need to be sent somewhere. The design was to send it out to sea through a 9.5-mile-long tunnel, hundreds of feet below the harbor and into the deep water of Massachusetts Bay.

The final step in the construction was to remove the caps at the end of that tunnel. The construction issue was how to do that. The eventual plan was to send a team out to the end of the tunnel to pull the plugs.

At that point in the construction, the ventilation and lighting systems had been removed from the tunnel. The oxygen level had dropped below a level where a human could live. Near the end of the tunnel, its diameter grew smaller and smaller, until it was less than five feet at the end. Then the worker would have to crawl through a three foot side tunnel to reach the sixty-five pound plug. Then repeat that 54 times. No thanks, I’d rather sit at my desk.

The construction company hired a dive team that would use an experimental breathing system to pull those plugs. As you can tell from the title of the book, things go wrong.

On the first day in the tunnel air hoses tangled, the oxygen supply malfunctioned before they could pull any plugs, and the truck wouldn’t start when they tried to drive back to the tunnel entrance.  On the second day, the men worked out some of the problems and managed to remove two plugs. On the third day, everything went wrong.

Mr. Swidey keeps the action moving and the tension mounting as he retells the events leading up to the tragedy and what ensues. He is very detailed.

For a compliance angle, you can see the conflict between the pressure to get the tunnel done and the safety of the workers. There is also a great view of the ensuing investigation.

Mr. Swidey points out that injuries and deaths tend to happen at the end of projects, when tolerance for delays is low and confidence is high. It’s normalization. When someone does something without suffering a bad outcome, the harder it becomes for them to remain aware of the risks and bad behavior. You see this with fraud and ponzi schmes.

There was a great piece in the Boston Globe written by Parker Pettus:

These men were not rich or famous or privileged. Certainly they would have preferred not to have been in a dangerous tunnel hundreds of feet below the surface and miles from any help.

They died while doing a hazardous, unheralded job, and their contribution to a clean, revived Boston Harbor will last for generations. They will not be immortalized in the media, they will not be buried at sea from the decks of a warship.

These workers are the kind of heroes who are so often taken for granted. We would do well to think of Boston’s clear, blue, living harbor as a monument to the courage and sacrifice of the ordinary heroes who made it a reality.

Trapped Under the Sea should be a great addition for your “to-read list.”

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Weekend Reading: The Map Thief

map thief

The classic business edict is to buy low and sell high. E. Forbes Smiley took that edict to heart in his business as an antique map dealer. Unfortunately, he discovered he could get his cost close to $0 if he stole his inventory. Michael Blanding captures the story of Mr. Smiley and the world of antique maps in The Map Thief: The Gripping Story of an Esteemed Rare-Map Dealer Who Made Millions Stealing Priceless Maps.

It turns out that valuable maps are much easier to steal than art. Works of art are generally one-of-a-kind pieces that hang in museums where everyone knows where they are. It’s hard for thieves to break and in and steal one. It’s even harder to try and sell the unique, identifiable, and now-known as stolen item.

In contrast, rare maps may be printed in thousands of copies, of which some unknown quantity may have survived over the centuries. They are rare, but not necessarily unique.

It also turns out that libraries are chock full of old map collections and atlases that are poorly cataloged, poorly tracked, and poorly monitored.  Mr. Smiley discovered that he could greatly increase his profits by attacking one of these libraries. He would pocket a map from a messy collection or tear maps from their bindings in atlases.

One of Mr. Smiley’s client was Norman Leventhal, the patriarch of the firm that employees me. The walls of my offices are adorned with part of his collection.

You can see the lack of controls at the libraries. One result of Mr. Smiley’s capture was an increased emphasis on libraries tracking their map collections. Mr. Smiley was not the only thief among map dealers.

The one weakness in the book is what made Mr. Smiley turn from respectable map dealer to thief. There is some discussion of his finances and a possible need to for more cash. There is also an implication that felt left out when one of clients made a large donation to a library. Mr. Smiley thought he was entitled to more. But it seems like the thievery started before then.

In the end we just don’t know what caused him to step over the line.

 

Weekend Reading: Countdown to Zero Day

coutdown to zero dayWe were in a cyber war with Iran. Kim Zetter unravels the story of Stuxnet, the US computer attack on Iran’s nuclear program in Countdown to Zero Day.

A few months ago, I read A Time to Attack urging a US military attack on Iran. That book highlighted how Iran had been building a nuclear program for several years. That included several years of centrifuges spinning to extract enriched uranium.

It has taken so long to extract uranium because, according to Zetter, the United States has been running a sophisticated attack on the computer systems that run those centrifuges. The United States and Israel planted sophisticated tools on those computers designed to alter the speeds of the centrifuges and the flow of gas into and out of them.

We have entered an age where warfare can been broken into digital attacks and kinetic attacks. Computer geeks and fighter jocks can both engage with the enemy. Stuxnet was a replacement for dropping bombs on the enrichment facilities.

Zero day refers to an attack using a previously unknown computer security vulnerability. One attack detailed in Countdown to Zero Day used a “god-mode exploit” that was even more potent. For anyone involved in cybersecurity, the book may make you want to curl up in a ball and hide in the corner.

The book is well-written and well-researched. It’s always great to grab a book like this that is enjoyable to read and able to explain complicated situations.

There is a compliance and ethics side to the book and the story of stuxnet. The US government has been touting the importance of securing critical infrastructure. The Securities and Exchange Commission has firing a warning that it takes cybersecurity very seriously. But according to Zetter, the government also has a stockpile of cyber weapons designed to attack those systems. Late in the book it raises the issue of whether cyber attacks should be treated as an act of war. Should Iran be able to retaliate with conventional weapons to protect itself from cyber attacks?

The publisher kindly sent me an advance reader copy of the book in hopes of me writing a review. Countdown to Zero Day goes on sale on November 11.

Weekend Reading: The Skies Belong To Us

skies belong to us

It’s hard to imagine in these days of TSA security, but over a five-year period starting in 1968, hijackers seized commercial jets nearly once a week. Brendan I. Koerner captures this piece of history in The Skies Belong to Us: Love and Terror in the Golden Age of Hijacking.

Mr. Koerner uses the hijacking of Western Airlines Flight 701 on June 2, 1972 as the centerpiece of his book, with other tales of hijackings wrapped around it. Roger Holder and Cathy Kerkow captured Flight 701 with a fake bomb. Neither had to pass through a metal detector or any security screening before boarding the plane.

Since Sept. 11 we have no sympathy for skyjackers. Mr. Koerner’s book returns us to the time of free love, the black panthers, and Vietnam War protests. In this golden age of of skyjacking you could walk through an airport “without encountering a single inconvenience — no X-ray machines, no metal detectors, no uniformed security personnel with grabby hands and bitter dispositions.”

Even as skyjackings became a weekly occurrence, the airline industry still opposed security screenings because of the inconvenience.

Unlike today’s fears of skyjackers being terrorists, the golden age skyjackers were more interested in fame, money and expressing displeasure with the government. A favorite destination was warm weather communist Cuba. Few actually wanted to harm anyone. The airline industry was convinced that enuring  periodic skyjackings was better financially than paying for invasive security measures at hundreds of airports.

Screening baggage with metal detectors at airports did not become mandatory until 1973. The airlines and their lobbyists fought security requirements. They thought costs would be prohibitive, and that passengers would rebel. Civil libertarians fought screening as a Constitutional violation.  (For a touch of cynicism, the automobile industry supported the screening requirements.)

Of course in this golden age, flying was much more enjoyable. “Decades have passed since coach-class passengers enjoyed luxuries that have since become inconceivable: lumps of Alaskan crabmeat served atop monogrammed china, generous pours of free liquor, leggy stewardesses who performed their duties with geisha-like courtesy.” I suppose it’s easier to tolerate a detour to Havana when you have room to stretch your legs, are well-fed and liquored-up.

It was the November 10, 1972 skyjacking of Southern Airlines Flight 49 that finally caused the government to implement mandatory screening, the airlines to concede, and passengers to accept security. Those skyjackers threatened to use the skyjacked plane as a weapon and crash it into the nuclear facility at Oak Ridge, Tennessee.

The golden age ended when skyjacking turned into a weapon.

Weekend Reading: Attachments

attachments

For those compliance officers who do email surveillance, you should enjoy the premise of Attachments by Rainbow Rowell. Lincoln, the protagonist is responsible for email surveillance. He falls for one employee who is a repeat offender whose emails routinely get flagged for his review. He falls in love, but has no idea what she looks like.

I’ll admit that it was the premise that caught my attention. You have to wonder if those hours spent reviewing emails could lead to something else. Rowell takes that premise and has fun with it.

Weekend Reading: Predator

predator

Predator covers the story of the birth of the Predator drone and its effect on military and covert operations. Richard Whittle manages to weave through the military and aeronautic bureaucracy of the Predator as it is destined to become  the most successful military unmanned aircraft.

I was surprised to see the level of detail about the development of the aircraft. I would think that much of the information would be secret. Or that those involved would be quiet about its history. Whittle clearly was able to uncover a tremendous amount of detail. The story is rich, enjoyable to read, and compelling.

The Predator drone was ugly, slow and unreliable. The key to its success was its ability to stay in the air for an extended period of time. Manned craft are limited by human endurance. The Predator can have flight crews swapped while in flight.

Everything else was good old-fashion ingenuity to expand the use and conquer the problems with the plane’s technical limitations. One key was the ability to transmit video not only to the pilots, but to other military leaders. That level and length of surveillance was compelling for military leaders.

According to the author, the turning point for the Predator happened during the Bosnian War. Those were the first flights in combat, but limited to surveillance.

It was the war in Afghanistan that pushed the Predator into more action. That turning point was the idea of mounting a hellfire missile on the aircraft. The Predator could not only watch the enemy, but could take action.

The book is focused on the history of the Predator, not the legal and ethical implications of the Predator. Part of that history is the legal analysis of mounting a missile on the aircraft and who can authorize taking a shot. There was some concern that the Predator with a missile could be classified as a cruise missile and be subject to weapon treaties with Russia.

The book’s historical narrative ends in 2002. That leaves most of the ethical implications to the book’s epilogue. Is it ethical to fight a war by remote control, with uniformed Air Force pilots blowing up targets on the other side of the world from their safe, air-conditioned work stations? Are the attacks assassinations or merely defensive strikes in the War on Terror?

The ethical implications are felt by the pilots. They are not whisking over target at supersonic speeds delivering their payloads with little time to see the damage. A Predator pilot has the continuing transmission to watch as the aircraft lumbers along above the target looking at survivors and victims.

The publisher provided me with a free review copy of the book.

Weekend Reading: House of Debt

house of debt

In House of Debt, Atif Mian, an economist at Princeton University, and Amir Sufi, a finance professor at the University of Chicago, make the case that household debt was the 2008 recession’s main culprit. This is a nuanced view that differs slightly from the view that it was the 2007 home price decline.

Mian and Sufi point out that the poorest homeowners suffered the most from the crash in home prices. They relied the most on home equity for net worth. Richer homeowners had other non-real estate assets that were less directly affected by the decline in home prices.

You can compare the dramatically different effects on the economy between the 2003 crash in internet stocks and the 2007 crash in home prices. The 2003 crash mostly hurt those with enough wealth to be invested in the stock market. The housing price decline hid a broader section of the population. By losing their net worth, the poorest homeowners lost their spending power, which lead to a drop in sales, which lead to a loss in production, which lead to a dramatic increase in unemployment. The 2003 crash was followed by a very shallow and brief recession, with little job loss.

The mortgage default rate from the 2008 recession was unprecedented. Since 1979 the mortgage default rate had never been above 6.5%. In 2009 the rate spiked above 10%. Loans were originated that went into default a few months later. The models for the securitized loans failed to address the widespread defaults.

There is no denying that some consumers were manipulated by lenders into taking out a lot of terrible home loans. There was a lot fraud and looking the other way on all sides of the mortgage loan closing table. But there was money to be made. Lenders flooded low-credit quality neighborhoods with credit despite the lack of indications that these loans could be repaid by the borrower.

The authors’ solution is a “shared-responsibility mortgage.” The lender takes some risk additional risk on the decline in value of the home and also gets a slice of the appreciation in value of the home. The monthly mortgage payment and amortization schedule gets reduced proportionally if housing prices fall. If prices increase, the lender gets a share of the appreciation. I think it’s an interesting idea, but not one that would work practically.

Regardless, the book is interesting look back at 2008 using empirical data.

 

 

Weekend Reading: Capital

capital thomas piketty

In Capital in the Twenty-First Century, Thomas Piketty argues that if the rate of return on capital is persistently greater than the rate of economic growth this will cause wealth inequality to increase in the future. The theory is that wealth accumulated in the past grows more rapidly than output and wages.

It’s a great macroeconomics book, rich with data and insight. But it’s still about macroeconomics. So it’s not going to keep you up late into the night turning pages to see what happens.

I came to the book with some base beliefs. I think inequality is a good thing. I believe you should be able to elevate your wealth through hard work and education. That’s the American Dream. (Conversely, I believe your wealth should decrease through a lack of hard work and a lack of education.)

Measurements of inequality are imperfect because the distribution of the have and have-nots changes over time. If you look at the Forbes 400 ranking of the wealthiest Americans from 1987 to 2013, there is a great deal of turnover. New wealth moves up and old wealth is lost through heavy spending, large-scale philanthropy, and bad investing. Only 35 people from the original 1982 list remained on it in 2013. Piketty blows up this belief.

I believe there are two problems with wealth inequality. Obviously too much of a good thing is bad thing. We should not live in a world of lords and peasants. Too much inequality is a problem. Moderate inequality should give you an incentive to strive for more. Stark inequality could lead to a violent political reaction.

The bigger problem with inequality is when the boundaries become impermeable, leaving a person unable to move up on the scale on wealth. Through hard work and education you should be able in increase your wealth. If wealth inequality becomes too extreme that mobility disappears.

There are two elements to wealth: income and capital. Trends in income are relatively easy to obtain data. Income tax filings provide a wealth of information for researchers. Capital is harder to work with because the measurements are bit less reliable.

That has been the sources of some controversy. The Financial Times looked at different data sources and came to a different position on the disparity. Piketty has made his data available: http://piketty.pse.ens.fr/en/capital21c2. He admits that the data is imperfect and incomplete. He is not trying to prove mathematical certainties, but create social science research for open debate.

Piketty’s central thesis is that we should be concerned when the concentration of capital attains extremely high levels and that we are heading towards that concentration. The western countries were approaching high levels of concentration at the beginning of the 20th Century. WWI and WWII annihilated millions of lives. The wars also destroyed accumulated wealth, crushing the accumulated inequality.

Piketty’s data indicates that in the decades since end of WWII wealth is once again concentrating. In the United States the upper decile’s share of the national income increased from 20 to 35 percent in the 1970s to 45-50 percent in the 2000s.

The data is is incomplete because there is no regular accounting of wealth on a regular basis as there is for income with income tax filings. One of the reasons Piketty proposes a tax on capital is so that wealth can be tracked.

A tax on capital is not that unusual. Most people in the United States are already subject to one: real estate property taxes. The government regularly reviews the value of real estate and levies a tax based on the value.

Obviously, a tax on securities and cash is much, much harder to implement since those forms of capital can move so easily and quickly across borders. That means a tax on capital would have to be implemented uniformly across international borders.

One interesting aspect of Piketty’s book is that so many have started reading it but not finished. As I said above, it’s a best selling macroeconomics book, but it’ still a macroeconomics book. An analysis of Amazon Kindle users found that just 2.4% of readers highlighted passages beyond the 26th page, with the Wall Street Journal proclaiming it the summer’s “Most Unread Book.” I

The first 250 pages are background and macroeconomic analysis that builds his case for the second half of the book. It’s this second half where all of his interesting ideas and analysis occur.

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