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Great Book, Misleading Title
on August 20, 2015
There is probably no better book on the financial crisis. The authors leave no stone unturned and manage to go into great detail without being tedious or boring. Best of all, rather than slant the story in favor of one causal hypothesis or another, they present such a wealth of data about who did what, and when, that readers can paint their own picture of what happened.
That said, the word “devils” in the title is misleading. It turns out to be a partial quotation from Shakespeare’s The Tempest: “Hell is empty, and all the devils are here.” In the context of the play, a shipwrecked mariner is bemoaning the intensity of a storm (and certainly the financial crisis was a storm) but for those unfamiliar with the allusion, it gives the implication that the actors in the financial crisis were devils – something that the book makes clear isn’t true.
Despite the catchy title, the story is not about devils. As bad, weak, greedy and stupid as some of the players were, the outcome was clearly the result of groupthink, incestuous amplification, or perhaps what author Diane Vaughan called the social normalization of deviance. Everybody got on the same bandwagon, including the federal government. Governmental mandates and quasi-governmental organizations like Fannie Mae were particularly instrumental in driving the buildup of what later became toxic assets.
In summary, if you want to understand the financial crisis and you’re not on a witch hunt, this book is for you.