GOING FOR BROKE

HOW ROBERT CAMPEAU BANKRUPTED THE RETAIL INDUSTRY, JOLTED THE JUNK BOND MARKET, AND BROUGHT THE BOOMING EIGHTIES TO A CRASHING HALT

A journalist's breezy and bemused but on-the-money account of a frog who became, however briefly, a merchant prince. In evident wonder, Rothchild (A Fool and His Money, etc.) recounts how Robert Campeau, a French-Canadian entrepreneur who had achieved success as a real-estate developer in his own country, began looking for new worlds to conquer during the mid-1980's. With exquisite timing, the vaultingly ambitious speculator somehow convinced Wall Street that it made good business sense to advance him $4 billion to gain control of Allied Stores (whose holdings included Bonwit Teller, Brooks Brothers, Jordan Marsh, etc.). Within months, he managed to borrow another $7 billion to buy Federated, a carriage-trade chain with such outlets as Bloomingdale's, Bullock's, and Filene's. Having overbid for both acquisitions, Campeau was in deep trouble from the start. As Rothchild makes clear, the upstart debtor-baron's penchant for wishful thinking made him a difficult client for the white-shoe commercial and investment bankers who put up with his capricious ways. In hopes of handsome fees, putatively prudent intermediaries nonetheless raised the capital Campeau needed to realize his flights of fancy. Once securities markets broke and the retailing industry took a turn for the worse, however, the rookie proprietor's lack of operational and financial savvy hastened the collapse of his highly leveraged enterprise. The fallout from the resultant Allied/Federated bankruptcy was widespread. In addition to the owner, the casualty list ranges from investors in the junk bonds used to underwrite the takeovers through brokerage houses stuck with bridge loans, rival merchandisers forced to meet or beat price cuts instituted to unload excess inventory, suppliers not paid for their goods, and (at last count) over 25,000 others whose claims aggregate $8.2 billion. A marvelously entertaining and tellingly detailed recap of fiscal folly that reflects precious little credit upon any of the principals. (Eight pages of b&w photos—not seen.)

Pub Date: Nov. 19, 1991

ISBN: 0-671-72593-9

Page Count: 320

Publisher: Simon & Schuster

Review Posted Online: May 20, 2010

Kirkus Reviews Issue: Oct. 1, 1991

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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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A deftly argued case for a new kind of socialism that, while sure to inspire controversy, bears widespread discussion.

CAPITAL AND IDEOLOGY

A massive investigation of economic history in the service of proposing a political order to overcome inequality.

Readers who like their political manifestoes in manageable sizes, à la Common Sense or The Communist Manifesto, may be overwhelmed by the latest from famed French economist Piketty (Top Incomes in France in the Twentieth Century: Inequality and Redistribution, 1901-1998, 2014, etc.), but it’s a significant work. The author interrogates the principal forms of economic organization over time, from slavery to “non-European trifunctional societies,” Chinese-style communism, and “hypercapitalist” orders, in order to examine relative levels of inequality and its evolution. Each system is founded on an ideology, and “every ideology, no matter how extreme it may seem in its defense of inequality, expresses a certain idea of social justice.” In the present era, at least in the U.S., that idea of social justice would seem to be only that the big ones eat the little ones, the principal justification being that the wealthiest people became rich because they are “the most enterprising, deserving, and useful.” In fact, as Piketty demonstrates, there’s more to inequality than the mere “size of the income gap.” Contrary to hypercapitalist ideology and its defenders, the playing field is not level, the market is not self-regulating, and access is not evenly distributed. Against this, Piketty arrives at a proposed system that, among other things, would redistribute wealth across societies by heavy taxation, especially of inheritances, to create a “participatory socialism” in which power is widely shared and trade across nations is truly free. The word “socialism,” he allows, is a kind of Pandora’s box that can scare people off—and, he further acknowledges, “the Russian and Czech oligarchs who buy athletic teams and newspapers may not be the most savory characters, but the Soviet system was a nightmare and had to go.” Yet so, too, writes the author, is a capitalism that rewards so few at the expense of so many.

A deftly argued case for a new kind of socialism that, while sure to inspire controversy, bears widespread discussion.

Pub Date: March 10, 2020

ISBN: 978-0-674-98082-2

Page Count: 976

Publisher: Belknap/Harvard Univ.

Review Posted Online: Dec. 22, 2019

Kirkus Reviews Issue: Jan. 15, 2020

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