Readers of this maddening, sharp report will rightly wonder why Fannie Mae and Freddie Mac have been allowed to survive and...

SHAKY GROUND

THE STRANGE SAGA OF THE U.S. MORTGAGE GIANTS

The housing sector is a house of cards.

So economics writer McLean (co-author: All the Devils Are Here: The Hidden History of the Financial Crisis, 2010, etc.)—who, having covered Enron in The Smartest Guys in the Room and the financial meltdown of 2008, knows a thing or two about such constructs—reveals in this report from the trenches. One conclusion comes early on in this latest book, a brief exposé: namely, that we have it all backward by privatizing health care and socializing mortgages, the reverse of most countries. “Most of the mortgage market in this country,” writes McLean, “is now supported by government agencies, more so than it was before the financial crisis.” Fannie Mae, Freddie Mac, and other government-sponsored enterprises may have helped precipitate the crisis—as the author notes, by 2006, almost three-quarters of all mortgages issued in the U.S. were less than prime—but they weren’t the only causes. Furthermore, though the surviving banks are pretty much back to normal, the mortgage market is not, retaining its old vulnerabilities while layering on bureaucracy. The result: when the next crisis comes, McLean suggests evenhandedly, the mortgage sector will lead the decline. The author charts the situation in vigorous prose whose arguments are often announced in her chapter titles (“The $9 Billion Accounting Fraud,” “Mr. Hedge Fund Goes to Washington”). What is clear is that the mortgage market requires reform of various kinds, particularly to rein in its tendency to value profit over fundamentals. What is less clear is just how to effect such reform, with recent efforts amounting to a roundabout way “to rebuild a system that, in a key way, would have been similar to what we had”—and that would still leave taxpayers with the burden of paying for the mistakes of the private sector.

Readers of this maddening, sharp report will rightly wonder why Fannie Mae and Freddie Mac have been allowed to survive and why we can’t do better.

Pub Date: Sept. 14, 2015

ISBN: 978-0-9909763-0-1

Page Count: 160

Publisher: Columbia Global Reports

Review Posted Online: July 15, 2015

Kirkus Reviews Issue: Aug. 1, 2015

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Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our...

THINKING, FAST AND SLOW

A psychologist and Nobel Prize winner summarizes and synthesizes the recent decades of research on intuition and systematic thinking.

The author of several scholarly texts, Kahneman (Emeritus Psychology and Public Affairs/Princeton Univ.) now offers general readers not just the findings of psychological research but also a better understanding of how research questions arise and how scholars systematically frame and answer them. He begins with the distinction between System 1 and System 2 mental operations, the former referring to quick, automatic thought, the latter to more effortful, overt thinking. We rely heavily, writes, on System 1, resorting to the higher-energy System 2 only when we need or want to. Kahneman continually refers to System 2 as “lazy”: We don’t want to think rigorously about something. The author then explores the nuances of our two-system minds, showing how they perform in various situations. Psychological experiments have repeatedly revealed that our intuitions are generally wrong, that our assessments are based on biases and that our System 1 hates doubt and despises ambiguity. Kahneman largely avoids jargon; when he does use some (“heuristics,” for example), he argues that such terms really ought to join our everyday vocabulary. He reviews many fundamental concepts in psychology and statistics (regression to the mean, the narrative fallacy, the optimistic bias), showing how they relate to his overall concerns about how we think and why we make the decisions that we do. Some of the later chapters (dealing with risk-taking and statistics and probabilities) are denser than others (some readers may resent such demands on System 2!), but the passages that deal with the economic and political implications of the research are gripping.

Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our minds.

Pub Date: Nov. 1, 2011

ISBN: 978-0-374-27563-1

Page Count: 512

Publisher: Farrar, Straus and Giroux

Review Posted Online: Sept. 4, 2011

Kirkus Reviews Issue: Sept. 15, 2011

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A declaration worth hearing out in a time of growing inequality—and indignity.

ECONOMIC DIGNITY

Noted number cruncher Sperling delivers an economist’s rejoinder to life, liberty, and the pursuit of happiness.

Former director of the National Economic Council in the administrations of Presidents Bill Clinton and Barack Obama, the author has long taken a view of the dismal science that takes economic justice fully into account. Alongside all the metrics and estimates and reckonings of GDP, inflation, and the supply curve, he holds the great goal of economic policy to be the advancement of human dignity, a concept intangible enough to chase the econometricians away. Growth, the sacred mantra of most economic policy, “should never be considered an appropriate ultimate end goal” for it, he counsels. Though 4% is the magic number for annual growth to be considered healthy, it is healthy only if everyone is getting the benefits and not just the ultrawealthy who are making away with the spoils today. Defining dignity, admits Sperling, can be a kind of “I know it when I see it” problem, but it does not exist where people are a paycheck away from homelessness; the fact, however, that people widely share a view of indignity suggests the “intuitive universality” of its opposite. That said, the author identifies three qualifications, one of them the “ability to meaningfully participate in the economy with respect, not domination and humiliation.” Though these latter terms are also essentially unquantifiable, Sperling holds that this respect—lack of abuse, in another phrasing—can be obtained through a tight labor market and monetary and fiscal policy that pushes for full employment. In other words, where management needs to come looking for workers, workers are likely to be better treated than when the opposite holds. In still other words, writes the author, dignity is in part a function of “ ‘take this job and shove it’ power,” which is a power worth fighting for.

A declaration worth hearing out in a time of growing inequality—and indignity.

Pub Date: May 5, 2020

ISBN: 978-1-9848-7987-5

Page Count: 384

Publisher: Penguin Press

Review Posted Online: Feb. 26, 2020

Kirkus Reviews Issue: March 15, 2020

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