A veteran financial/business journalist examines the past three years of economic collapse, chronicling actions and inactions from dozens of villains and a few heroes.
New York Times Magazine and Bloomberg contributor Lowenstein (While America Aged: How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis, 2008, etc.) teases out the upsetting saga of ignorance and greed without adding much to the story already related in newspapers, magazines and broadcast outlets, not to mention a few books that beat his to bookstores. Nonetheless, he handles the recap skillfully, in language nonspecialists can understand. The author identifies more than 100 key players, almost all of them middle-aged white males from Wall Street, private mortgage companies, law firms, federal government agencies and the U.S. Congress. The narrative consistently demonstrates how almost all of those who could have halted the coming recession by employing common sense instead decided that the housing market would never collapse. When it did, nearly all of the smart guys in the room expressed shock, even though some of them had worried privately about a looming disaster. Among the most loathsome of the destroyers in Lowenstein’s case are Angelo Mozilo, chief executive of Countrywide Financial, which wrote billions of dollars of home loans bound to default; and Joseph Cassano, an executive of insurance behemoth AIG who overexposed the company and its clients to the risks of credit-default swap losses. The leading heroes, chosen from a slim field, are Brooksley Born, chair of the Commodity Futures Trading Commission, who tried to discuss government regulation of derivatives a decade before the debacle; and Robert L. Rodriguez, chief executive of First Pacific Advisors, who protected his investors from the insane greed while trying to warn anybody who would listen about the house of cards about to collapse.
A well-delineated chronicle likely to cause readers to ask who put the clowns in charge of the circus, and why aren’t they confined to prison cells.