Customer Reviews

It Takes a Pillage: An Epic Tale of Power, Deceit, and Untold Trillions

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This is an exceptionally well-written account, in detail that doesn't drown the reader, of the actions of the banking and financial industry that lead to the financial meltdown and subsequent economic contraction.

If you have already constructed a good general grasp of the various components at work, Ms. Prins fills in the particulars with a flourish. She correctly points to this being a collapse of a man-made system, fueled by the standard mix of hubris, greed, self-delusion and legislative abandon -- only it's a system that tossed trillions of dollars into a waiting black hole, inevitably touching the lives of tens -if not hundreds- of millions of people.

This is the *best* writing on this debacle I've encountered. I'd rate it right up there as commentary with David Cay Johnston's 'Perfectly Legal' and his 'Free Lunch'. But it's far more than simple commentary; Ms. Prins knows exactly what she's writing about.

It's better than Taleb Nassim's 'The Black Swan' and outdistances James Galbraith's 'Predator State' and Thomas Frank's 'The Wrecking Crew' as a precise commentary on the enemy that has grown and prospered in our midst. Gillian Tett's 'Fools Gold' was a good explanation of the creation -and subsequent rise and abuse- of derivatives in the financial world, but lacks Ms. Prins' comprehensive view, from on high, of the high-octane transmogrification of the banking and financial industry over the past ten years from a service industry into a manufacturing industry designing, producing & marketing a new breed of "securities" built by rocket scientists that blew up after launch but nonetheless produced oodles of bonuses and fees for these firms and their CEOs.

By Steven D. Wexler

Abe Lincoln used to ask, "If you call the tail of a dog a leg, how many legs does that dog have?" Whenever somebody answered "Five," he would say, "No. Calling a tail a leg doesn't make it a leg." He was referring to slavery, and the habit of euphemizing it as "our peculiar institution." Few bothered to challenge this. Harriet Beecher Stowe was one; she presented slavery as it really was: brutal, inexorable, shameful and turning our entire nation into what many northerners called a shamocracy, rather than a democracy.
In Nomi Prins' recent book, IT TAKES A PILLAGE, she hoists politician after politician and banker after mega-banker upon their own petards, as they pop off their flatulent laissez-faire euphemisms. Like Ellen Brown in CounterPunch (October 2, 2009), Matt Taibbi in Rolling Stone (October 15) and Morgan Ibarra in The Humanist (September/October), she fleshes out the rape and pillage of the economy by the kleptocrats of our scamocracy. Together these writers put together a complete scenario of sociopathy--our recent reaming which has been veiled by what Thomas Frank of the Wall Street Journal compared to the mumbo-jumbo of witch doctors, who "repeat their incantations and retreat deeper into dogma."
IT TAKES A PILLAGE is a must-read because it is an inside story. Its tone is urgent and sardonic. She whips off bon mots reminiscent of Galbraith's famous phrase about the 1929 bubble: "a mass escape into make-believe." With just one word, "Really," she emphasizes how economists now know enough to use high unemployment (ten per cent or more) as a deflationary brake upon the hyperinflationary bailout of mega-banks. This high unemployment, extending far into the future, will be our cost for rescuing their banking buddies. This secret bailout, committed by the Fed (a government-chartered private bank, charging us interest), was hidden behind the TARP smokescreen. The lemon-socialist subsidy for the once very bankrupt rich so far totals around 13 trillion dollars, according to Prins.
Divide that by our population: 300 million. You get $43,000.

I thought I knew the ins and out of the greatest financial debacle of our time until I read this book. This is an epic tale of greed, debt and power that belongs in the pantheon of great financial muckraking books. The closest title I can think of is Louis Brandeis's "Other People's Money." Instead of the rapacious robber barons of the early 20th century, we have the debt peddlers from investment banks, insurers and megabanks gorging on the Bush-era anti-regulatory buffet. This book should be a timely template for financial reform, yet the financial services juggernaut has already marshalled its still-potent army of lobbyists, hacks and free-market madmen to defeat any sensible attempts to prevent another disaster. Every lawmaker, policy savant and student of financial history needs to read and digest "Pillage." Unless you are part of the short-term mania that still drives Wall Street compensation practices, this book will make you ill with outrage. We ignore the powerful truths of the book at our peril. We've already spent more than $12 trillion cleaning up after the massive collision of the supertanker SS Avarice with economic reality. Generations will be paying for this catastrophe. If we refuse to learn from this event, the next economic blow-up will not be papered over by US government debts. It will make the Great Depression seem like a Disney Musical. Read this book and call your Congressional representative. John F. Wasik, Author, "The Audacity of Help: Obama's Economic Plan and the Remaking of America"

The author does an excellent job of demonstrating the extent to which both political parties are essentially guided by the policy recommendations of major Wall Street firms and the largest commercial banks.She shows that the bailout's main goal was,and is, solely to bail out the surviving financial institutions no matter what the costs are ,be it unemployment,foreclosure,or future inflation , that are imposed on the backs of the American taxpayer and Main Street.

An underlying current in the book ,that is not always correctly emphasized , is that it should now be obvious to everyone that Obama follows the policy advice advocated to him from Goldman Sachs,Citibank,Bank of America and J P Morgan.Geithner and Bernanke carry out this policy advise in the Obama admnistration in the same manner that Paulson , Greenspan,and Bernanke carried out Wall Street's policy recommendations in the George Bush administration,that Rubin,Greenspan, and Summers carried out Wall Street's policy recommendations in the Bill Clinton administrations,and Alfred Kahn and Paul Volcker carried out the policy advice of Wall Street in the Carter Administration.The same Wall Street domination shows up whan one studies the Reagan and George H W Bush administrations. Their supply side economic policies were primarily derived from Wall Street speculator-manipulators who sought to destroy the firewalls erected and maintained from 1936-1976 that had prevented the type of massive debt leveraged,banker financed housing and stock market speculation that had destroyed the American economy in the late 1920's and early to mid 1930's .The destruction of the firewalls was called " privatization " and "deregulation" .It is easy to spot the Wall Street connections and underpinnings of the supplyside " economics " of A.Laffer,J.Wanniski,G. Gilder,etc.
One minor criticism of the book is that the author does not spend a chapter showing that Adam Smith ,in his The Wealth of Nations (1776),and J M Keynes,in his The General Theory of Employment ,Interest and Money (1936),had come to the exact same conclusions as to the source of the problem - major banker financed and directed debt leveraged speculation, in the real estate and financial-stock markets, that leads inevitably to a bubble,mania,panic ,crash,and economic downturn.

It is clear that a political solution to America's, and the world's, banker induced and financed bubbles will require a Third Party candidate like Ross Perot who is not financed by Wall Street.

The author has provided us with an extensive rogues' gallery of crooks, thieves, and incompetents that have led us to our country's present financial disaster.

She points out that the US taxpayer is already on the hook for $13 trillion of inadequately collateralized loans, financial securities hardly worth the paper they are printed on, and general financial trash scooped up by the federal govt from the hallways of Wall Street firms. That's the good news. The bad news is that if our noble public servants and legislators are not stopped or re-directed, the American taxpayer could be exposed to even greater financial losses in the neighborhood of 10's of trillions of dollars.

She repeatedly stresses the need for a re-institution of Glass-Steagall type of regulatory controls that were thrown to the winds during the 1999 Clinton era financial reforms--aka as giveaways to the financial industry. Those "reforms" were non-partisan. Most Republicans and Democrats fell over themselves trying to ingratiate themselves with the financial industry during the process. As Ms. Prins points out, Bill Clinton still denies that merging the financial side of banking with commercial banking which occurred due to the 1999 legislation contributed in any major way to the our present financial meltdown. So much for the intellectual brilliance of Bill Clinton.... Or maybe he has additional ethical challenges that transcend his personal life.

George W. Bush comes in for his fair share of bashing in the book. As does our present president, Barack Obama. All of Ms. Prins' bashing strikes me as absolutely and totally justified. These endemic problems that infect our banking system are due to a corrupted political process where our legislators--and presidents--appear to be bought and paid for by Wall Street.

She also gives our avuncular present Fed chairman, Ben Bernanke, more than a little thrashing. As she points out, Alan Greenspan screwed up incredibly during his tenure as Fed chairman. Free, self-regulating markets indeed! However, he never singularly put the American taxpayer on the hook for something just south of $8 trillion--unlike Bernanke. I would be interested if Ms. Prins is going to do more follow on work on how to reform the Fed. She decries the operation of the Fed with the leadership of Greenspan, Bernanke--and their predecessors. But I would like a bit more attention as to how we should change the Fed--outside of getting rid of the corrupted Fed leadership and presidents who appoint the chairmen to do the bidding of Wall Street.

Very good book. It makes the complex more understandable. It is a bit daunting, though, to keep track of all of the players and all of the cash being won and lost--and the bailouts provided for those losses--during this "wonderful" excursion into Wall Street Casinoland, USA.

I agree with other reviewers that a 3rd party may be the only way out of this morass of political and financial corruption. I don't see either of the two parties at this point as being capable of true reform. I hope I am wrong. There are voices in the wilderness in Congress like Bernie Sanders of Vermont and Sherrod Brown of Ohio. But they do not appear to have the support of sufficient numbers of other legislators.

Ross Perot, I apologize for making fun of your big ears and short stature in '92! You were kind of weird, but you look a lot less weird in retrospective than do Clinton, Bush II, and, I hate to say it, Obama. All of these presidents--along with their two predecessors--deserve F-'s for their dealings with Wall Street. I would love to see Obama mend his ways, but unfortunately I see no sign of it. Money is still king on Wall Street and in Washington. We need to try to change that fact to the best of our abilities. I am told that America is still a democracy and that we are still, "We the People." How long that will continue to last, I do not know....

This book provides a close up and extremely hard-hitting look at how reckless management, greed and out-right stupidity made it possible for the large investment banks on wall street to bring out economy to the brink of destruction. Nomi Prins does clearly has the personal history and knowledge to back up her belief that before this "economic down-turn" is over more that $13 TRILLION of wealth will be transferred from the tax-payers to the very same firms that knowingly inflated this bubble, packaged up bad loans with ridiculously high default rates into shiny new pieces of paper lovingly stamped AAA by the ratings agency, created a demand for them and then shorted them on the quick. It describes how virtually all government regulation was systematically dismantled by their puppets in DC.

It seems like the book was written to elicit a specific response from the readers...rage. The author does not pull any punches and does a very nice job of boiling down complex information into "bottom line" type statements or take-home messages. The sum of all these messages is simultaneously revealing, dire and depressing.

At this point, I have read a stack of books about how the world broke in late 2008. (I know it was not the world nor was it purely isolated to actions in late 2008, but still that's the image many people have.) I have read so many I feel like I was writing my own [unnecessary book] book about the subject. Posner wrote two of them, for crying out loud. My reading has been some from the center-right to a couple from the Marxian left. I have not tried to look for any pure insider view since it would feel like an apologia and not truth.

I have enjoyed the various authors' many different takes, but they usually have come from academics or journalist. Prins is a nice hybrid because although she is a writer now, she has been in the belly of the beast and can give an insider's knowledge of the workings of the financial system. What strikes me here is her passion for the subject. Like many of these books, hers was written fast to capitalize on the necessary timeliness needed to sell the books. But -It Takes a Pillage_ is written not just fast, but at a white heat. I could feel it coming off the page. How you take that is a function of your own mindset. She's not purely objective, she's angry at the set up of the system and what happened.

For Prins, the crisis or in her terms "The Second Great Bank Depression" is based on over-leveraging and bundling of complex securities. That's not a new observation nor the sole reason. She goes back to Jekyll Island and Bretton Woods and looks at regulatory capture and lax regulatory standards. We visit the railroad bubble and the panic of 1873. We see the rise of the trusts and the 1890 Sherman Antitrust Act. We see it subverted as we see the protections put in place in the wake of the Depression subverted.

Prins is mad -- as I have been mad. However, the more I read about the causes and watch the political and economic climate in this country, the less angry I can be. I just have a bad case of outrage fatigue because I know full well that whatever lessons that were and can still be learned will fall on the deaf ears of the elite. The cycle will rise again as long as we take monopoly capital to be the organizing principle of our globalizing 'flat' world. Capital has a way of breaking your heart; and we keep pining for the promises made and forget the promises broken.

This is one of the best works I have that explained what a CDO, synthetic CDO, CDS, ABS, etc was to where someone completely ignorant of finance would understand. The author's main thesis is that it wasn't the subprime market collapse that brought down the too big to fail banks, it was the gluttonous leveraging or borrowing on top of the subprime collateral that caused havoc. I wish I had read this book at the onset of the bailouts, because I, like so many others, believed the fear and believed these were necessary. The bailouts turn out to be cheap loans (and sometimes gifts) which allowed banks to merge with failing investment banks, allowed banks to dump their toxic assets, and bolstered their balances sheets... all on the tax payers' dime. This was a very informative read, sometimes very entertaining. I can definitely say I walked away much more enlightened as a result. The author points out in a very entertaining way all the wrong doings by the banks.

Particularly sleazy was the length insurance companies went through to get their greedy hands on the TARP money. In order for these institutions to be eligible for the TARP funds had to convert to thrift status and to do so would buy a no name savings a loan bank for a few millions and in return get billions in Tarp money.

The chapter on Goldman Sachs or "Government Sachs' as the author puts it, was very telling. Though a prestigious place for employment, it was enlightening to see how well connected many of the men of senior positions are and how they use the system to take care of each other. Most of our treasury secretaries and NY Fed Reserve presidents are recruited directly from Goldman. Many of Goldman's alum were in positions of power leading up to the bank failures. But none are ever held accountable.

The author gave a pretty scathing review of the Federal Reserve's handling of the entire mess. Instead of stepping up and regulating the "too big to fail" banks for reckless behavior and allowing them to fail - it threw tons of money and thoughtlessly allowed many of them to convert to BHC status to allow them great flexibility in putting their hands out for taxpayer money. And Obama and Bush continued to push for greater authority to be extended to the Fed? There will be long standing consequences of such actions in the form of inflation, non transparency of these secret transactions but longer standing consequences of allowing the huge banks (and blessing their mergers as a result of the recession Merrill-BOA, WaMu-Bear Stearns-Chase, Countrywide-Citi, Wachovia-Wells) to self -regulate themselves - that is why we are in the crisis we are in today. The Fed missed the boat and a golden opportunity to make a difference. But then again, the Fed is largely owned and staffed by these banks. The Fed approves or disapproves of bank mergers. The entire reason for the bailouts was that certain banks were too big to fail. So what does the Fed do - blesses some of the biggest mergers in history - Merrill-BOA has now become the biggest bank institution in US history. The Fed with encouraging and forcing some of these mergers has set in stone the next big crisis. The chapter on too big to fail goes further on the mergers. It also cover the tremendous compensation and fees collected from these "so called hurting banks". Aren't we destined to repeat our blunders, now the banks are only just bigger?


The author argues that "everyone saw this coming". The government of the 90's repealed the Glass-Steagall act under Clinton, Rubin, Gramm... allowing commercial banks to use consumer deposits for risky investments. The SEC also loosened its belt on the 1975 net capital rule allowing investment banks to up leverage ratios from 12:1 to up to 30:1. Lastly the Fed Reserve allowed the huge conglomerate mergers of banks to merge with non-banking industries. These three laws were created decades ago to prevent the abuses that began in the 90's ultimately causing economic collapse. Deregulation was the factor.

The final chapter is the author's take on what needs to happen to correct the financial markets abuses and prevent the next bank meltdown. She would prescribe more regulations, weakening the Fed and more overall transparency at the Fed, no more self regulation; bring back Glass-Steagall, comprehensive study on where all the bailout money went since this has been kept a secret... The list goes on but I find it incredibly naive (though she is right). The author's problem is far beyond the greed and regulation of Wall Street, it's the current state of political affairs. Once the government officials (who are bought and sold by the bank lobbyist) granted the power to Wall Street, it become impossible to take away. We will not see the courage in our elected officials that we saw in the 30's and 50's until we do major campaign finance reforms. Look at Spitzer, my embattled former governor. He attempted to stand up to Wall Street and found himself resigned of his position. Yes, it looks like a set up the more I read on it. Wall Street has so much power, I wonder sometimes that only a revolution would turn the tides back. In this sense, the book is great for exposure of fault but not much more. And not to the author's fault as her recommendations are pretty sound.

One short fall is the author tries to pound home the greed theme. Companies and Banks bought and bought these ABS, CDO, CDS, etc out of pure greed with no regard to risk and they borrowed heavily on these assets. She does some but very little mentioning of the ratings agencies gave many of the investments AAA status. And yes I understand that there needs to be some due diligence on the investor themselves and many of these investments were complex and relatively new therefore no reliable way of predicting the outcome. But I still feel the false ratings far outweighed the greed. If there were predications that these securities could easily become worthless - the ratings would reflect that and I am sure the desire for these products would not have been so great. The meaningless ratings really gave the green light.

Another issue I have is the author clearly blames the banks and big corps for the collapse - greed, greed, greed. The subprime mortgage collapse really was the catalyst for the entire recession and she mentions it but also diminishes it and goes right back to finger pointing at the banks. I also read "Complicit" by Mark Gilbert which had a more balanced account in who's to blame. For the most part, all players and everyone is to blame. Everyone behaved recklessly - investors, home buyers, insurance comp, banks, rating agencies, government, pensions... Everyone was drunk on great returns - risk seemed to evaporate. Everyone is angry with the bailouts and the recipients of them (and rightfully so) but it's more complex than that. Sometimes I think the author just jumps on the popular outrage because that's what we want to hear.

Lastly, the author worked in elevated positions at both Bear Stearns and Goldman Sachs for MANY years. Her past experience does contribute to the "insider view" which makes this book so valuable. But how can one work somewhere for years to then point fingers? I'd love to know the real reason why she left. I've seen interviews with her stating that the lifestyle and corporate values beholden in those firms were not in alignment with her person. Sounds great but I am sure there's more to it. So there were times where I felt like she's the criminal in jail writing a book on why crime is so bad. To an extent, she was part of it.

These are very mild criticism of the book though - it's still a great informative read. I think the biggest thing that the reader has to keep in mind when reading a work such as this is that this interpretation is through the eyes of the author and subject largely her opinion. And there are other sides to the story. I did enjoy her take on things though and I am not saying she is right or wrong - just keep an open mind. But she was very enlightening on the subject matter.

"It Takes a Pillage" is an exceptionally good analysis of what Nomi Prins calls the Second Great Banking Depression. As a former manager at both Goldman Sachs and the now defunct Bear Stearns, Prins is able to demonstrate how the unregulated lust for power led to the near collapse of the banking system last year. She also pointedly details the depth of the ties between the banking/investment industry and our political leadership in Washington, be they Republicans or Democrats. The Obama administration, Prins tells us, is actually closer to the financial sector than the Bush administration was.

This book is unique in that the author has given us an actual appraisal of the cost of the bailout to United States taxpayers, something that the federal government has promised but never done. Thirteen trillion dollars! That's the true cost of the bailout as Prins meticulously explains.

But Prins doesn't just explain the origins of the banking crisis. She also warns that unless our government acts quickly to overhaul the system that led to the collapse, history will soon repeat itself. She ends the book with concrete proposals to radically reform the way both Washington and Wall Street work. "It Takes a Pillage" is a must read for anyone who wants to fully understand how powerful the banking industry is in the United States and how much sway it has over our governing institutions.

All of the other five star reviews of this book I agree with. The one three star review is just flat wrong. The writing style and approach cannot be overstated. This book is excellent on many levels. First, it is written by an insider who explains the inner workings and relationships between the pillagers and the rest of the world. Second, the writing ability of the author is top notch. I intend to read all her other books as this is the first one. The author blends exposition and critique seamlessly as she explains all the transactions, government interactions, etc. Third, the author makes suggestions on how to make the system work more productively for EVERYONE. Basically, the author calls for more enforced government regulation as the free market Wall Street players, left to their own devices, wreak havoc. The question is asked of how often we have to let this happen, as we do not appear to learn from the past. How often, indeed.