Customer Reviews

Past Due: The End of Easy Money and the Renewal of the American Economy

5 star:		(9)
4 star:		(1)
3 star:		(1)
2 star:		(1)
1 star:		(0)

 

 

Peter S. Goodman has done the almost impossible: He's made the origins of the global financial collapse comprehensible and he's done so without forgetting that it is individual human beings who have been most devastated by the complex tangle of motives that created the crisis. It's that blending of Goodman's incisive, expert understanding of international economics with his ability to put a human face to the disaster that makes "Past Due" such a timely and important book. I can't recommend it more highly.

Peter Goodman has written a first-class book not just on the economy and its myriad troubles, but also the American psyche and its endless, often irrational and troubling belief in the quick fix fueled by banks, credit card companies, home builders and politicians of all stripes. The profiles of ordinary Americans swept up in the toxic financial stew known as the dot com boom and housing bubble makes this book unique and uniquely frightening. Goodman ties it together with thoughtful analysis and contextual history. Very readable.

If you enjoyed This American Life's "Giant Pool of Money," you'll love this book. It took this reader gently through the questions and answers of "what the heck happened!?!"

If you're anything like me, you know that the financial meltdown is one of the most important events of this generation, but you've despaired of really understanding it. Mostly because the reporting all seems so damn boring! Well, this book is good news because it's actually an interesting read. As in: I didn't have to force myself to read it because I thought I "should." Instead, I found myself actually enjoying reading about the economy.

Part of the magic is that the author uses real stories of real people. The stories are compelling, and the author is a good storyteller, so it ends up being really entertaining. And then, almost without realizing it, you find that you understand what actually happened, and maybe even some of the lessons to be learned, and how to move forward.

[...]

It will give you the flavor of the book.

First, the positives - yes, the book is well written overall, with clear explanations of many things like credit default swaps (a term that I have heard bandied about numerous times on the financial news channels).

My main problem with the book is that many of the stories about people seemed tacked on, or dropped into place as if they were meant to expand the page count. The stories were largely repetitive - basically "people decided to improve their lot in life/have the good life with easy money, only to find they didn't read/weren't told/didn't understand the fine print" and wound up in deep trouble. These stories disrupted the narrative of what the overall flow of events were that is far more critical to understand. This is why I only gave the book three stars.

Finally, his "cure". We have to bring more back onto our shores, and create wealth by making things of tangible value as opposed to, as he roughly terms it, financial hocus-pocus (indeed, he draws a metaphor with the overall situation with Neverland of Peter Pan). But there is an underlying theme that many will find disquieting nonetheless - wages will likely be lower than what they once were, and the capital to do all this will likely come from foreign investment of companies buying up US assets. Sadly, as Warren Buffett has said, "we are giving ourselves a party to feed our appetite for oil and imported goods and paying for it by selling off the furniture, our most precious assets." (Maureen Dowd,New York Times editorial, 1/20/08). I fear that the US will have to learn to live with lowered expectations.

Matt Taibbi, in a recent Rolling Stone article asked the question: Is Obama a sellout? The article goes on to demonstrate how through his appointments to oversee the financial mess, Obama has effectively put the same foxes back in control of the hen house that got the feathers flying in the first place, and that Obama's measures have left loopholes big enough to drive the proverbial Mack truck though. Therefore, Taibbi's is an eminently fair question. However, it takes this book, Through three clear-eyed and very sobering metaphors to bring Taibbi's message home: one comparing our economy to an airplane crash, another to a jimmy-rigged homeowner's fire insurance policy, and the final one comparing the men appointed to run our financial institutions to grown men refusing to grow up and continuing to live in Peter pan's nether land. Although there is a lot more to the book than just these three analogies, for my money, they alone were worth the price of the book.

Through these analogies, Paul Goodman makes sure we all finally understand how the incestuous Wall Street "gang of five:" Alan Greenspan, Larry Summers, Tim Giethner and the Rubin father son team, and their larcenous buddies, succeeded in making wall street their own private ATM machine to gamble away the nation's wealth. And even though he is not a conspiracy theorist, nevertheless, through these analogies, Goodman brings the mechanics of the greatest heist since the "Great Train Robbery" back down to earth.

In the first metaphor, he likens our carefully engineered financial collapse to a plane crash. -- but with the important distinction being that in a plane crash, no one stands to benefit. Not so in the financial crisis. Just the opposite is true in fact. Through the financial turbulence of the Clinton and Bush years, for instance, instead of steadying the nation's financial craft, Greenspan/Summers & company opened the deregulatory gates to" full crash mode," bribing the air traffic controller (our weak kneed and morally challenged Congressmen) to allow new exotic unregulated financial instruments such as "credit default swaps, etc. to flourish. Then, just as the national financial controls were set to crash mode, the gang of five pushed the cockpit seat eject buttons so that they and their cronies would be jettisoned safely to the ground spending their obscene bonuses by the time the rest of the economy came tumbling down. While the rest of us were busy counting financial dead bodies, and looking for the black box, they were sashaying down the Yellow Brick Road counting their bonuses all the way to their "gated estates" in financial heaven.

In order to bring home the full meaning of the "credit default swap," Goodman, in his second analogy, likens the situation to a "slick neighbor," who has convinced everyone else in the neighborhood to buy his or her fire insurance not from GEICO, but from him. Then he systematically removes all of the smoke alarms, lights all of the BBQ pits in the neighborhood, and gets rid of all the fire hoses except one, his. Again, when the inevitable fire occurs, our neighbor, the insurance man is already on vacation in Mexico, using his "up-front" insurance fees to lie on the beach of a luxury hotel, sipping a Mai Tai, while back home, the whole neighborhood is fighting over the one hose, as the homes in the neighborhood all go up in flames.

The final analogy has Greenspan as Peter Pan, living in nether land with the rest of Obama's financial team as his Lost Boys. Greenspan, as he and his boys fly about nether land, sprinkling the fairy dust of new exotic financial instruments, with the U.S. mortgaged to the hilt, and everyone in nether land living on credit, has not a care in the world. For even after the crash, they all remain secure in their faith that the corrective mechanisms of the University of Chicago version of the free enterprise system will keep an ample supply of fairy dust (free money for more credit) always available.

It is Goodman's view that even if Obama's limp-wristed stopgap measures (my phrase not his) prove that he does not yet get it: the end of nether land, and of the era of fairy dust, is very near. Unless the gaping loopholes that Obama has helped construct are not patched and soon, the next to fall will assuredly be the "all mighty (Chinese backed) U.S. dollar." A sobering final call to arms; Easily five stars

Until I read this book, I did not totally understand this recession. Now I feel I do. Its not written in a style that is so boring and technical that you don't quite "get it", instead it is written about people who are living out the horrors of the recession. I found the book informative and hard to put down.

I thought this book hit the nail right on the head. It is an understandable, logical explanation of our current state of affairs, yet it is also a compelling read. Most books about the economy are convoluted and hard to follow, not so with this one.

Peter Goodman is one of the smartest, most interesting writers I've ever encountered. There was an excerpt of this book in the New York Times that was amazing. Understanding economics can be a slog - unless the writer knows how to tell stories about real people, and explain events through peoples' lives. Peter does that. It's a great book.

I'm no expert on the economy and, frankly, I have no interest in most business writing--but this book is different. What the title and the cover don't adequately convey is that this book explains the roots of the Great Recession through compelling and compassionate narratives about a diverse cast of ordinary people: those who lost everything, those who profited, those getting left behind. These stories are interwoven with amazingly lucid chapters that manage to make topics like credit-default swaps and option-ARMs and China's ownership of US debt gripping (and even humorous!) material. Goodman makes it clear to people like me that we must understand and pay attention to how this insanely complicated stuff affects all of our lives--and how it's warped our very national character. And whatever you might assume about a NY Times reporter, this book is not partisan. The Clinton, Bush, and Obama administrations are all taken to task.

Yes, the recession seems to be easing up, but we as a country still don't seem to understand how it all happened and what we need to do from here on out. And yes, there are countless books on the economy now, but no other book (not Sorkin, Lewis, et al.) does what this book does: speak to ordinary people about ordinary people in a way that makes this need-to-know material a gripping and enjoyable read.

This is a must read book for everybody. ESPECIALLY those under the ate of 18. It is never to soon to learn finacial responsibility and the consequences.