Summer Reading: 5 Books You Have to Read

Summer's almost over, but it's not too late for a reading list, is it? Here are five highly recommended picks from my bookshelf.

1.The Big Change: America Transforms Itself 1900-1950, Frederick Lewis Allen
After reading The Big Change it's hard not to conclude that the first half of the 20th century was more transformative to American life than the last. During the first half we went from horse and buggy to airplanes. During the second half we went from airplanes to faster airplanes.

Writing in 1952, Frederick Lewis Allen describes how life in America changed from 1900 to 1950. Culture, economics, technology, politics, food, attire, travel, transportation, entertainment -- anything you can think of, how it changed is covered in detail. I'll tell you, it's fascinating. Part of the reason is that while he's writing as a historian, Allen lived through the events he chronicles.

Some of my favorite sections covered the Great Depression. Allen writes:

It marked millions of people -- inwardly -- for the rest of their lives. Not only because they or their friends lost jobs, saw their careers broken, had to change their whole way of living, were gnawed at by a constant lurking fear of worse things yet, and in all too many cases actually went hungry; but because what was happening to them seemed without rhyme or reason. Most of them had been brought up to feel that if you worked hard and well, and otherwise behaved yourself, you would be rewarded by good fortune ... [now] they found their fortunes interlocked with those of great numbers of other people in a pattern complex beyond their understanding, and apparently developing without reason or justice.

2.Future Babble, Dan Gardner
One line sums up what you need to know about this book: "No one can foresee the consequences of trivia and accident, and for that reason alone, the future will forever be filled with surprises."

The vast majority of predictions in nearly every field will turn out utterly wrong in hindsight. The sooner you come to terms with this, the better off you'll be, particularly when navigating today's prediction-rich, accountability-light media culture.

In Future Babble, Dan Gardner does a remarkable job outlining why we make predictions, why most of them are dead wrong, and how you can think about the future more rationally. Well-written, witty, and packed with examples of experts dropping the ball in grand fashion, this book will ensure you'll never again take a stock market forecast seriously.

3.The Behavior Gap: Ways to Stop Doing Dumb Things With Money, Carl Richards
You might know Carl Richards from his New York Times columns illustrated with Sharpie charts penned on napkins. Now, the financial advisor has written an entire book on why most people fail at managing money, and what you can do about it. My guess: You'll read the whole thing in one sitting. It's that good.

Relevant to anyone from teenagers to hedge fund managers, Richards' book is filled with pithy lines of wisdom like these:

  • "Risk is what's left when you think you've thought of everything."

  • "People tend to give you advice that's based on their own fears, their own experiences, their own expertise, their own motivations. Their advice typically has little to do with the reality of your own life."

  • "We focus so much on protecting ourselves from negative surprises (job loss, disability, divorce, death) that we forget to factor in the positive ones (a raise, a business that works out, a new career, a bull market) that can sometimes change our entire outlook."

4.The Lost Bank: The Story of Washington Mutual -- The Biggest Bank Failure in American History, Kirsten Grind
The spectacular 2008 collapse of Washington Mutual was in many ways the perfect storm: hubris, bad incentives, short-term thinking, leverage, ignorance of a housing bubble, all wrapped up in the middle of the deepest recession in generations.

Kirstin Grind does an exceptional job piecing together exactly what happened to WaMu, from its beginnings through its growth years, the housing bubble, and its ultimate demise.

At times you feel bad for the bank, particularly its rank-and-file employees who were left out of work. Other times you realize that its fate was sealed long before 2008. Take this account of a group of loan executives: "Many of them knew they were making loans that borrowers had almost no chance of paying back. 'I wouldn't lend some of these people money to buy a bicycle, never mind a house,' said one account executive. 'I don't think anyone was trying to screw anyone, we were all just trying to make money.'"

5.Better, Stronger, Faster, Daniel Gross
We're $16 trillion in debt. Twenty-some-odd-million people are unemployed. Average incomes are declining. You'd be forgiven for thinking our best days are behind us.

But Daniel Gross will hear nothing of it. In Better, Stronger, Faster, he lays out the bullish case for America. And really, it's persuasive.

For starters, we're in the early stages of an energy renaissance that few seem to appreciate. America has uncovered so much oil and natural gas in the last five years that we recently became a net exporter of fuel products for the first time since 1947. How many times have you heard that one in the news? Probably never. We're too busy talking about decline.

We're also in a middle of a broader export boom. "In fact, the United States is the top exporter in the world," Gross writes. "President Obama's March 2010 proclamation that the country should strive to double exports by 2015 seemed like a pipe dream ... but by October 2011 monthly exports had already risen to a record $179 billion, an increase of 44 percent from the bottom in April 2009. That's almost halfway toward doubling."

Plus, the world is investing copious amounts of money in us. Plus, we have one of the youngest populations in the world. Plus, we're shedding consumer debt like there's no tomorrow. Have some faith. It's probably not as bad as it looks.

Got any recommendations of your own? Share 'em in the comments section below.

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Fool contributorMorgan Houseldoesn't own shares in any of the companies mentioned in this article. Follow him on Twitter @TMFHousel. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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