A knowledgeable, clearly written exposé.

THE MONSTER

HOW A GANG OF PREDATORY LENDERS AND WALL STREET BANKERS FLEECED AMERICA—AND SPAWNED A GLOBAL CRISIS

Another look at the subprime mortgage lending meltdown, with a focus on the predatory housing finance corporation Ameriquest and the once-venerable Wall Street firm of Lehman Brothers.

Formerly a staff reporter for the Wall Street Journal, Hudson (editor: Merchants of Misery: How Corporate America Profits from Poverty, 1996) is now a senior investigator at the Center for Responsible Lending. Recent books about the global financial meltdowns have designated a variety of villains. Roland Arnall (1939–2008), founder of Ameriquest, has appeared in many of those previous books, but Hudson makes him the center of his narrative. The immigrant son of a Czech mother and a Romanian father, the boy settled in Los Angeles and became a real-estate developer before entering the mortgage-loan business. In Hudson’s eyes, Arnall always lacked a moral compass. He obsessed about hiring as many young salesmen as possible who would lie to potential customers and forge documents if it meant bringing a new mortgage into the portfolio. The consumers must share the blame because they signed papers they failed to understand, but that was part of Arnall’s plan—prey on poorly educated marks, many of them minorities and widows, starting in Orange County, Calif., and working outward from there. The insanely profitable business became more profitable still after the entry of Wall Street investment bankers such as Lehman Brothers, which could package the financially unsound mortgage loans and sell them to greedy investors. Hudson does a workmanlike job unfolding Arnall’s biography, though the facts about his business tactics, personal life and emotions never quite solve the puzzle of how he slept at night, given the huge numbers of lives he ruined as the marks lost their homes. The saga is doubly depressing because Arnall hired from a seemingly endless supply of amoral salesmen and managers. Hudson is a master of context, supplying the pre-1990s history within the mortgage-lending business, Wall Street and the government-regulation realm.

A knowledgeable, clearly written exposé.

Pub Date: Nov. 1, 2010

ISBN: 978-0-8050-9046-8

Page Count: 384

Publisher: Times/Henry Holt

Review Posted Online: July 19, 2010

Kirkus Reviews Issue: Sept. 1, 2010

Did you like this book?

No Comments Yet

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

Did you like this book?

Occasionally wonky but overall a good case for how the dismal science can make the world less—well, dismal.

GOOD ECONOMICS FOR HARD TIMES

“Quality of life means more than just consumption”: Two MIT economists urge that a smarter, more politically aware economics be brought to bear on social issues.

It’s no secret, write Banerjee and Duflo (co-authors: Poor Economics: A Radical Rethinking of the Way To Fight Global Poverty, 2011), that “we seem to have fallen on hard times.” Immigration, trade, inequality, and taxation problems present themselves daily, and they seem to be intractable. Economics can be put to use in figuring out these big-issue questions. Data can be adduced, for example, to answer the question of whether immigration tends to suppress wages. The answer: “There is no evidence low-skilled migration to rich countries drives wage and employment down for the natives.” In fact, it opens up opportunities for those natives by freeing them to look for better work. The problem becomes thornier when it comes to the matter of free trade; as the authors observe, “left-behind people live in left-behind places,” which explains why regional poverty descended on Appalachia when so many manufacturing jobs left for China in the age of globalism, leaving behind not just left-behind people but also people ripe for exploitation by nationalist politicians. The authors add, interestingly, that the same thing occurred in parts of Germany, Spain, and Norway that fell victim to the “China shock.” In what they call a “slightly technical aside,” they build a case for addressing trade issues not with trade wars but with consumption taxes: “It makes no sense to ask agricultural workers to lose their jobs just so steelworkers can keep theirs, which is what tariffs accomplish.” Policymakers might want to consider such counsel, especially when it is coupled with the observation that free trade benefits workers in poor countries but punishes workers in rich ones.

Occasionally wonky but overall a good case for how the dismal science can make the world less—well, dismal.

Pub Date: Nov. 12, 2019

ISBN: 978-1-61039-950-0

Page Count: 432

Publisher: PublicAffairs

Review Posted Online: Aug. 29, 2019

Kirkus Reviews Issue: Sept. 15, 2019

Did you like this book?

more