Dumb Money [Kindle Edition]

Daniel Gross (Author)

Editorial Reviews

Product Description

The financial crisis that has gripped this country since last September has had so many twists and turns, it would make for a great drama -- if it all were not so real and damaging. Companies are shutting down and laying off workers, 401ks are melting away, and the government is spending $700 billion dollars to bail out banks and financial institutions -- and that's only the beginning. The financial services industry, and the many industries that depend on it -- from housing to cars -- is in intensive care.

So what happened? How did we get to this point of financial disaster? Is the economy just a huge, Madoff-esque Ponzi scheme? It is a complicated and confusing story -- but Daniel Gross of Newsweek has a special gift for making complicated matters easy to understand and even entertaining. In Dumb Money, he offers a guide to the debacle and to what the future may hold. This is not so much a book about who did what, though that's part of the story. Rather, it pieces together the building blocks of the debt-fueled economy, and distills the theory and personalities behind our late, lamented easy money culture. Dumb Money is a book that finally lays it all out in an engaging way, and might just help people invest their money smartly until the gloom passes.

About the Author

Daniel Gross is a journalist, author, and editor who specializes in business history, political economy, and the money culture. He writes the ?Moneybox? column for Slate.com and contributes to the ?Economic View? column of the New York Times. He has worked as a reporter at The New Republic and has contributed to more than 60 publications. Since 1999, he has edited STERNbusiness, the semi-annual management journal published by New York University's Stern School of Business. Gross has appeared on CNBC, CNN, Fox News Channel, The News Hour with Jim Lehrer, C-SPAN, and on more than 35 radio programs, including NPR's Fresh Air with Terry Gross (no relation). In 2001, he was a fellow at the New America Foundation.

He is the author of three books: Forbes Greatest Business Stories of All Times; Bull Run: Wall Street, the Democrats, and the New Politics of Personal Finance; and Generations of Corning: 150 Years in the Life of a Global Corporation, 1851-2001, co-authored with Davis Dyer.

A graduate of Cornell University, Gross holds an A.M. in American history from Harvard University.

Product Details

• Format: Kindle Edition
• File Size: 319 KB
• Publisher: Free Press (February 23, 2009)
• Sold by: Simon and Schuster Digital Sales Inc
• Language: English
• ASIN: B001TEGEBA
• Text-to-Speech: Not enabled
• Average Customer Review: 4.1 out of 5 stars  See all reviews (19 customer reviews)
• Amazon Best Sellers Rank: #284,456 Paid in Kindle Store (See Top 100 Paid in Kindle Store)

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Customer Reviews

Most Helpful Customer Reviews

41 of 44 people found the following review helpful:

4.0 out of 5 stars Current Events, March 6, 2009

By 

Raederwulf (Atlanta, Georgia, USA) - See all my reviews

This review is from: Dumb Money (Kindle Edition)

Mr. Gross has given us a clear, non-technical account of our current financial crisis, credit lockdown and recession. It makes for lively reading as well, since many of the key players of this account are allowed to characterize themselves in their own words (quoted mostly in context). Mr. Gross falls just short of self-righteous indignation by reminding himself and us of the parts we played in enabling the players. There are enough facts and figures to refute the idea that somehow the people who did not make money were to blame for the excesses into which the money-makers were enticed. I do have two complaints about the story. First, there is a lack of discussion of the involvement of international credit markets connected with international trade - what I believe were the "canary in the mineshaft" - that dragged down central banks once counterparty trust was lost. Secondly, I accuse Mr. Gross of copping out in his concluding chapter. Following such a story of legal, ethical, and moral drama, I would expect the author to give us an account of the lessons he learned, and lessons we might carry away. However, he was gun-shy, and said as much, about making "predictions" about future events. The reader will have to write his or her own conclusions. For me, it was the old virtues of honesty, thriftiness and hard work. You cannot write a credit default swap on those. Other people will have other lessons.

13 of 14 people found the following review helpful:

5.0 out of 5 stars To the Point, May 25, 2009

By 

D. Rising (Ann Arbor, MI) - See all my reviews
(REAL NAME)   

This review is from: Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation (Paperback)

Gross has managed to write one of the most clearly stated, precise and condensed versions of the origins and nature of the current economic crisis currently on the market.

Gross is not interested in finding a ideologically motivated one-stop-shopping-style guilty party ("It's Clinton's fault!"). Instead, he concentrates on the mechanics of how things got to the point they are at now - and in a way easily accessible to the layperson, without sacrificing accuracy.

14 of 16 people found the following review helpful:

5.0 out of 5 stars Interesting and Entertaining -, November 16, 2009

By 

Loyd E. Eskildson "Pragmatist" (Phoenix, AZ.) - See all my reviews
(HALL OF FAME REVIEWER)    (REAL NAME)   

This review is from: Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation (Paperback)

Recently I read a Newsweek column by Daniel Gross documenting that U.S. private employment today is less than in 2000, despite population having grown 9%. That bit of basic insight led me to read his "Dumb Money" about how the Ownership Society quickly degenerated into the Bailout Nation during the same time period. The book is short (101 paperback-sized pages), interesting (even entertaining), yet comprehensive, covering all the decade's financial 'stars' - Ben Bernanke - keeping interest rates low, continuing Greenspan's rosy forecasts), Christopher Cox (ineffectual SEC head), Alan Greenspan (keeping interest rates too low for too long, lobbying for deregulation, blindly following philosopher Ayn Rand instead of economic data and theorists), Edward Lambert (acquired K-Mart and Sears early in the decade, then spent $4.9 billion to buy back shares at an average $118 - now $70), Richard Fuld (named a #1 CEO by Institutional Investor magazine in 2006, received a $22 million bonus in 2007, and then watched the 28,000+ firm Lehman Brothers collapse in a market-terrorizing bankruptcy in 2008), Angelo Mozilo (making mortgages available to almost everyone in his pursuit of #1 market share), Henry Paulson (a latecomer to the crisis, he then created a bailout for the institutions that created the crisis), Robert Rubin (lobbyist for deregulation, Citibank board member while sailed into a major government rescue), John Thain (CEO NYSE from 2004-2007, paid $83,785,021 in 2007 - mostly by his not-yet employer Merrill Lynch, requested a $10 million 2008 bonus for 'saving' Merrill by selling it to Bank of America for $28 billion + $20 billion in government money, spent $1.22 million in 2008 corporate funds to renovate two conference rooms, a reception area, and his office, and was fired in January, 2009), the fine folks (both legislators and regulators) behind the Community Reinvestment Act, and countless financial geniuses that bought up every exotic three-letter financial instrument, company M&A or LBO, and mirage within sight.

Gross even managed to 'share the blame' (sarcastically) with China for our low interest rate-fueled housing bubble. Institutional players involved and included in Gross' accounting included insurance giant AIG, banks, bond rating agencies, builders, Congress (bought, paid-for, and asleep), Fannie-Mae and Freddie-Mac (repeatedly raised their loan limits, allowing the bubble to keep inflating), mortgage originators, and the shadow bankers. Dumb money players were not limited to the private sector - California and the U.S. government also were major participants, followed by New York, New Jersey, Illinois, etc. - all but North Dakota, Wyoming, Montana and Alaska. And none of this could have happened without the little people (you and I) who bought ARMs, balloons, HELOCs, liar's loans, and no-down loans by the millions and then got stuck with them after the crash; regardless, we're all paying now for the private and public sector bailouts, along with our children, grandchildren, great-grandchildren, etc.

Gross' Recommendations? Outlaw stupidity, and create some sort of fiscal lithium (sprayed over Wall Street?) for starters. Gross is not enthusiastic about more regulation (too easy to get around). Perhaps a tax on securities trading and the creation of structured financial products to be used to help cover future messes.