How Do We Fix This Mess? - Robert Peston

The clue to this book is the question mark at the end of the books title. The book is almost a plea, how do we fix the mess the world economy is in? This book doesn't offer a solution, a fact acknowledged by the author early in the book. Instead it is a description of the many ways in which both the global and UK economy are a mess and how we got there.

I found this book eye-opening as it revealed the many flaws in the global economy, many of which I was unaware of. The perverse way in which the richest economies are borrowing vast sums of money from poorer economies was one such flaw. This book made me realise just what a mess we are in and how far we are from resolving this in a way which does not cause more damage.

The journey to this point was well explained. But it seemed to me a long series of events which could be considered the law of unintended consequences in action. For example, financial innovation created new products which should have reduced the risks taken when investing or lending money. But the actual effect of these products was to obscure the risks being taken to such an extent that nobody fully understood what risks they were taking. Being unaware of the risks being taken encouraged more risks to be taken because many financial institutions were simply unaware of the fact they were taking risks.

Another example is the banking rules. These were biased towards banks holding supposedly low-risk assets. But some assets were classified as low risk because their risks were obscured (see above) and so the rules encouraged the banks to hold assets whose risks were not known.

Robert Peston made his name during the credit crunch. He was a well known journalist before this but only within his area of expertise. The Northern Rock story started his road to wider fame as he broke a series of stories as the crises unfolded. Yet he himself admits to missing the big story. He describes the first occasion he started worrying about the risks being taken was when he was interviewing the manager of a large city trading floor and the manager couldn't explain what they were doing in a way that he could understand. Peston worried that if he couldn't explain to a business journalist of many years experience, then did he really understand what they were doing? And if he didn't how could his bosses? But Peston didn't really follow this up, which he now regards as a mistake.

For me the biggest lesson I'll take from this book is just how far we are from resolving the current crises. It made me realise that I really don't know what the UK government is doing to resolve the crises. They talk about re balancing the economy, but I've no idea how they intend to do this or what their vision is for a rebalanced economy. Is this because the measures needed are going to be painful in the short-term and take many years to see any benefit? The government can't really plan past the next election though. Perhaps if the government laid out a plan for where we are going we could judge their progress fairly. I think some leadership is missing here.

Reading this book has also made me reassess my opinions on a few subjects. I'm a believer in the welfare state, that the government should support those who are unable to support themselves (either temporarily or permanently) through no fault of their own. But the book contrasts the low savings rate in the UK with the high rate in China and points out that the high rate in China is because they have to save for a rainy day. In the UK we have a generous welfare state which will support you if, for example, you lost your job. But if you have savings, this is taken into account and the support could be reduced. This discourages savings, which has knock-on effects in terms of the money available for the banks to lend for investment. So is this good for the economy? Does the welfare state discourage savings which in turn reduces investment, which then leads to fewer jobs and so more people in need of help? I'm not sure.

I would definitely recommend reading this book. We have a long way to go both in the UK and globally. If we all understood how we got here we may be in a better position to fix the mess that Robert Peston does such a good job of describing.

The Ultimate Book of Heroic Failures - Stephen Pile

This book is a mostly entertaining series of anecdotes about the more spectacular and amusing failure. The anecdotes themselves are of a variable quality both in terms of how amusing they are and in their believability. This isn't a book I would recommend going out of your way to read, but as a book to dip into every now and then for an amusing story it is worth having.

Richer Than God - David Conn

This book is essential reading for any football fan. It is a book of two stories. It is the story of the authors life as a football fan, and the story of modern football and how owners make millions while the grass-roots of the game is played in poor facilities. David Conn grew up as a Manchester City fan, and has become a journalist writing about football and the issues surrounding the game. But he has become disillusioned with many aspects of football today despite his clear love for the game. This book is the story of how this happened and what he sees as the flaws in today's game.

Growing up, David Conn was a typical football fan. He felt he belonged to his club, and his club belonged to him. This false reality would become shattered due to his peripheral involvement in a bitter takeover battle for Manchester City. Like many City fans at the time, he wanted the then chairman Peter Swales out. Swales had made many mistakes over the years. When he took over, Manchester City were one of the top clubs in England. But by the mid-90's they were a mid-table side at best and financially on the edge. When former player Francis Lee launched a takeover bid, many fans felt he was the man to lead their club back to where they should be.

The trouble for Conn was that it never was the fans club in the first place. By the mid-90's the author was a journalist and he was asking questions. These questions would lead him first to the realisation that all football clubs were businesses. And secondly that like all businesses, the main reason they exist is to make money for their owners. This was something that felt fundamentally wrong, football was not the sport he had grown up believing it was.

Since that day David Conn has spent a great deal of time researching the business side of football and campaigning for a different type of football, one closer to that which he thought he had grown up with but which had never really existed. The story of this side of football is told in this book, in parallel with the fall and subsequent rise of Manchester City. A rise which has seen them completely transformed over the past few years by owners who should represent everything Conn dislikes about the modern game. I say should because almost paradoxically, Sheik Mansour's ownership of Manchester City has shown more respect for the history and fans of the club than any previous owners and so could be the best owners the club has had. A dilemma Conn does not shy away from exploring.

There are some factual errors in this book which most readers probably won't notice but for me, as a Manchester City fan, sadly stuck out. To give a couple of examples, in 1985 City beat Charlton 5-1 not 4-1 to win promotion and their first win of the 95-96 season wasn't against Aston Villa, but was three games earlier against Bolton. The first of these examples could be excused as a typo. But the second cannot because the author describes details of the game under the mistaken impression it was the first win of the season. Fortunately for this book though, these errors will not be noticed by most readers and have no impact on Conn's arguments about the state of football.

There are also flaws with his argument about how many aspects of modern football are not in the best interests of the game. To begin with he never fully explains what is meant by the good of the game. Should the game be run for the benefit of the Sunday league player? To provide the best possible England team? To have as many spectators as possible? In reality a balance should be struck but it wasn't clear where Conn believes this should be and so its difficult to agree with his argument that the balance is wrong. In addition he makes some contrasts without explaining the connection. For example, he contrasts the facilities he played in as an amateur (run down due to local authority spending cuts) with the millions pouring into the Premier League from TV money but he never explains why they should be connected. To me this argument was like complaining that a school cannot afford new musical instruments yet Take That can sell out a stadium tour and make millions.

But despite these flaws this is an excellent book. I agree with many of the problems in modern day football outlined in the book and found the details on how they arose informative. But perhaps the highest praise I can give this book is that it has made me think about what is meant by the phrase 'the good of the game'. What does that mean? Is it better for the game of football that the Premier League is watched by millions around the world? In isolation, the answer to this would be yes. But the effect of growing the audience around the world may have been to price out a traditional part of footballs fan base from attending the game live as the clubs needed more revenue to attract the best players which in turn attracts the TV audience. Which of these should the Premier League have prioritised? There are many examples such as this where football has made choices and there are trade-offs. I'm unsure if the right choices have been made and what would have happened had different choices been made.

In summary a must read for all football fans. A book telling us all how the game is really run and offering alternatives for how it could be run.