158 of 173 people found the following review helpful
Finally someone gets it!,
This review is from: Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon (Hardcover)
Morgenson and Rosner have done their homework and written an in depth and hard-hitting book that reveals with perfect clarity how this mess began. It's refreshing to read a book that doesn't rehash the Wall Street stories we've all heard over and over. I'm much more interested at this point in the characters in Washington who were championing home ownership and enriching themselves as they set the stage for disaster, and who really have remained blameless up to now. The sense of outrage the authors feel comes through on every page and the book is actually a page-turner in addition to being a real narrative, unlike some of the other books on the crisis, with a beginning and an end. Great storytelling and great reporting as well. Read it!!!
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Initial post: Jun 3, 2011 12:05:22 PM PDT
J. R. Soper says:
What has become clear is that the "law of unintended consequences" held sway over the "good intentions" of those polititions, known as "housers" and promoters of the "ownership society".The essential lesson is that with enough sunshine - transparency and oversight - we can innoculate the system against the kind of abuse that ran rampant through the executive ranks of the GSE's as well as Wall Street firms. Capitalism is far from perfect, but it is better than the rest - maybe????
In reply to an earlier post on Jul 13, 2011 9:34:23 AM PDT
Eric Zuesse says:
This book by Morgenson and Rosner is the first book-length presentation of the Republican Party's explanation for the 2008 economic collapse: it blames the collapse on Democrats' having tried to boost the access to mortgages by poor people, first via the Community Reinvestment Act of 1977 against "redlining," and then via the use of Fannie & Freddie to buy these loans and turn them into mortgage-backed securities. The only flaw in this explanation is that it's ridiculously false (even though there was some corruption at Fannie & Freddie).
This myth against Fannie-Freddie was definitively proven to be a lie when David Goldstein and Kevin G. Hall of McClatchy Newspapers reviewed Federal Reserve data and headlined on 13 October 2008, "Private Sector Loans, Not Fannie or Freddie, Triggered Crisis," and they reported that, "Federal housing data reveal that the charges aren't true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending." For example, "Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics." Moreover, Fannie and Freddie "don't lend money, to minorities or anyone else. ... They purchase loans from the private lenders." Fannie and Freddie had nothing whatsoever to do with America's mortgage-meltdown. "The `turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007,' the President's Working Group on Financial Markets reported Friday [October 10th]. ... And at the height of the housing boom in 2005 and 2006, Republicans and their party's standard bearer, President Bush, didn't criticize any sort of lending, frequently boasting that they were presiding over the highest-ever rates of U.S. homeownership." George W. Bush was desperate for something to get his Administration's sluggish economic recovery going, so that he could leave office with at least one positive achievement on his record. Basically, he was just hoping to leave the now-inevitable economic collapse on his successor's record, not on his own. Metaphorically, his fingers were crossed in the hope that the collapse would hit after 20 January 2009, not before.
Goldstein and Hall cited for particular criticism assertions from Neil Cavuto of Fox News, and from Charles Krauthammer of the Washington Post, as being contrary to all evidence. Those assertions accused Fannie and Freddie, and "loaning to minorities," as being the source of this actually Republican-caused economic collapse.
Republicans continued accusing Fannie and Freddie, and the CRA, and loans to minorities, as having caused the collapse of the U.S. financial system, and did this even when other Republicans pointed out it wasn't true. It was too much even for Republican commentator David Horowitz, at his frontpage.com, and he headlined, on 8 July 2009, after Bush was replaced in the White House by Democratic President Barack Obama, "[Republican Congressman, who was the wealthiest person in Congress] Darrel Issa and the [other] Republicans File a False Report on the Origins of the Economic Meltdown," and reported: "Republican legislator Darrell Issa and the Republican staff of the Government Oversight Committee [of Congress] have put out a [misleading] report on the cause of the economic meltdown that appears to be based on false premises and therefore draws false conclusions. The report claims that the economic crisis can be traced to government pressure on lenders to give loans to poor people and minorities whose credit would not warrant such loans. The statistical evidence shows however that this is false." Nonetheless, other Republican pundits continued these false charges, stoking hatred against the poor. (Perhaps the reason Horowitz didn't join them on this was his having previously been a communist. Though willing now to join hands with haters of the poor, he wouldn't join them in this particular lie, which to him was just too glaring.)
Republican blaming of CRA and Freddie and Fannie continued on, as the key strategy for relocating onto Democrats and the poor the blame for the economic collapse that Republicans, and Republican policies, had caused. During the end of the George W. Bush Administration, and the beginning of the Administration of the self-styled "bipartisan" Barack Obama, the Government arranged to transfer as many of the bum mortgages onto Fannie and Freddie as possible, so as to load this trash onto future taxpayers and unburden the banks (sponsors of Republican politicians and of conservative Democrats) of it. Consequently, for example, on 13 June 2010, the Republican Michael Bloomberg's Bloomberg News headlined "Fannie-Freddie Fix at $160 Billion With $1 Trillion Worst Case," and quoted a consultant to the mortgage-finance industry as saying, "It is the mother of all bailouts." The same day, and on the basis of the same set of facts, the investment-fund manager Barry Ritholtz, at ritholtz.com, bannered, "GSEs [Freddie & Fannie]: $1 Trillion Dumping Ground for Bad Bank Loans." The difference between these two reports was only their spin: Whereas Bloomberg was focusing on the enormous burden that Freddie and Fannie were going to be for U.S. taxpayers, Ritholtz was focusing on why this had come to be the case - and that Fannie and Freddie themselves were not to blame for it. The purpose of Republican propaganda is always to blame the actual victims; Bloomberg doesn't like the poor, but neither do other Republicans.
So, now, Morgenson and Rosner flesh out this Republican line with a bunch of anecdotes about how bad a person James Johnson was. This book is recommended for Republicans who don't want to know how deceived they are and have been. However, anyone else will feel cheated if they purchase it: they won't find an explanation of the collapse. In order to understand the cause of the collapse, many good books have been published, but I think that the best were Simon Johnson's 13 BANKERS; Yves Smith's ECONNED; and Barry Ritholtz's BAILOUT NATION. Each of these three provides a far more coherent and complete account of who robbed America, how, and why; and the poor didn't do it, nor did advocates for the poor.
In reply to an earlier post on Oct 30, 2011 8:03:50 AM PDT
Excellent post, and Ritholtz has been dead on in exposing the CRA/GSE bashers - WITH EVIDENCE, not propaganda. A few points: it was Paulson who shoved the swill the non-agency lenders wrote onto the GSEs after he nationalized them. If Paulson had backed F&F with the same zeal he had backed AIG, the Republican demagogues would not have a case.
Secondly, Bloomberg is not a "Republican" in any way you would recognize, and as a frequent consumer of his media production, I can tell you it is one of the most even handed media outlets out there, far better than the obnoxious CNBC with flunkies like Joe Kernan and Larry Kudlow.
Posted on Oct 30, 2011 8:06:00 AM PDT
I doubt you read the book- while it's informative, it ain't no "page turner."
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