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I Will Be Reading ‘Reckless Endangerment’

Posted by Larry Doyle on May 26, 2011 5:49 AM |

Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon There are only a few books written on our financial crisis that I have felt compelled to read. I thoroughly enjoyed The Big Short by Michael Lewis. I strongly recommend 13 Bankers by Simon Johnson and James Kwak. Ruthless by Phil Trupp explores and exposes the largest scam on Wall Street, that is the auction-rate securities travesty, without parallel.

What is the next book I will be reading? After having listened to a Bloomberg Radio interview yesterday with The New York Times’ Gretchen Morgenson and Graham Fisher’s Josh Rosner, I will next be reading Reckless Endangerment.

I did not want the Bloomberg interview to end yesterday as Morgenson and Rosner were pulling no punches in naming names and exposing the stench of what I have defined as the Wall Street-Washington incest.

I have no doubt that America continues to suffer at the hands of so many intimately engaged in this incestuous activity. Will anything be done to expose and eradicate the incest?

Well, if Morgenson and Rosner have anything to do about it, a large measure of badly needed sunshine is pouring through Wall Street’s and Washington’s front window.

Morgenson and Rosner share the following excerpt,

This is not the first book to be written about the epic financial crisis of 2008 and neither will it be the last. But Josh and I believe that Reckless Endangerment is different from the others in two important ways. It identifies powerful people whose involvement in the debacle has not yet been chronicled and it connects key incidents that have seemed heretofore unrelated.

As a veteran business reporter and columnist for the New York Times, I’ve covered my share of big and juicy financial scandals over the years. For more than a decade as an established financial and policy analyst, Josh has seen just about every trick there is.

But none of the scandals and financial improprieties we experienced before felt nearly as momentous or mystifying as the events that culminated in this most recent economic storm. That’s why we felt that this calamity, and the conduct that brought it on, needed to be thoroughly investigated, detailed, and explained. The disaster was so great — its impact so far-reaching — that we knew we were not the only ones who wanted to understand how such a thing could happen in America in the new millennium.

Even now, more than four years after the cracks in the financial foundation could no longer be ignored, people remain bewildered about the causes of the steepest economic downturn since the Great Depression. And they wonder why we are still mired in it.

Then there is the maddening aftermath — watching hundreds of billions of taxpayer dollars get funneled to rescue some of the very institutions that drove the country into the ditch.

The American people realize they’ve been robbed. They’re just not sure by whom.

Reckless Endangerment is an economic whodunit, on an international scale. But instead of a dead body as evidence, we have trillions of dollars in investments lost around the world, millions of Americans jettisoned from their homes and fourteen million U.S. workers without jobs. Such is the nature of this particular crime.

Recognizing that a disaster this large could not have occurred overnight, Josh and I set out to detail who did it, how, and why. We found that this was a crisis that crept up, building almost imperceptibly over the past two decades. More disturbing, it was the result of actions taken by people at the height of power in both the public and the private sectors, people who continue, even now, to hold sway in the corridors of Washington and Wall Street.

Reckless Endangerment is a story of what happens when unfettered risk taking, with an eye to huge personal paydays, gains the upper hand in corporate executive suites and on Wall Street trading floors. It is a story of the consequences of regulators who are captured by the institutions they are charged with regulating. And it is a story of what happens when Washington decides, in its infinite wisdom, that every living, breathing citizen should own a home.

Josh and I felt compelled to write this book because we are angry that the American economy was almost wrecked by a crowd of self-interested, politically influential, and arrogant people who have not been held accountable for their actions. We also believe that it is important to credit the courageous and civically minded people who tried to warn of the impending crisis but who were run over or ignored by their celebrated adversaries.

Familiar as we are with the ways of Wall Street, neither Josh nor I was surprised that the large investment firms played such a prominent role in the debacle. But we are disturbed that so many who contributed to the mess are still in positions of power or have risen to even higher ranks. And while some architects of the crisis may no longer command center stage, they remain respected members of the business or regulatory community. The failure to hold central figures accountable for their actions sets a dangerous precedent. A system where perpetrators of such a crime are allowed to slip quietly from the scene is just plain wrong.

In the end, analyzing the financial crisis, its origins and its framers, requires identifying powerful participants who would rather not be named. It requires identifying events that seemed meaningless when they occurred but had unintended consequences that have turned out to be integral to the outcome. It requires an unrelenting search for the facts, an ability to speak truth to power.

Investigating the origins of the financial crisis means shedding light on exceedingly dark corners in Washington and on Wall Street. Hidden in these shadows are people, places, and incidents that can help us understand the nature of this disaster so that we can keep anything like it from happening again.

Come to Papa!! I love it.

America needs to fully understand and appreciate,
1. How and why Wall Street’s regulators became “captured by the industry”.

2. The naming of names. Who did what to whom? Who are the “self-interested, politically influential, and arrogant people who have not been held accountable for their actions”?

3. What lies in those ‘exceedingly dark corners in Washington and on Wall Street’?

Reckless Endangerment would seem to address a host of issues I have tried to highlight here at Sense on Cents. As such, I anxiously look forward to reading and reviewing it. I commend Morgenson and Rosner in advance for their efforts.

Larry Doyle

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I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

 

  • coe

    It’s rapidly approaching 5yrs since the tail end of ’06 when the cracks in the financial/capital markets system started to be more fully recognized..it’s been almost three years since the government took control of the big GSEs – and have we paid attention at all to the fact that Freddie and Fannie are still hemorrhaging money and there is yet to be formulated a new plan or direction for our nation’s housing policy! ..talk about reckless endangerment..I found myself, as I suspect did many of us, centering the Memorial Day weekend around family and friends – a birthday party for a granddaughter, a surprise dinner drop-in by an old friend, a family barbeque, some quiet reminiscing about my father, a veteran of WWII, some prayers for those soldiers that have died in the service of our country, and I couldn’t help but think about “reckless endangerment” and the balance between the boundless innate optimism of our children’s generation versus our inability to civilly tackle serious problems that will likely affect the well being of those same children and their children..on one level it’s still about forensic accounting – figuring out the causes, and pursuing the perpetrators while offering support to the real victims, but isn’t it also time to start to look away from the rear view mirror, in my opinion, and forge a proper new direction – somehow it all comes back to leadership – political, financial, moral – and it has to find it’s place in each and every one of us – optimistic, maybe a little; hopeful, yeah..but certainly wary and cynical as well..”reckless endangerment” – a perfect phrase for our times!

  • Viola

    Matt Taibbi is an excellent reporter and reported a few of these stories which only get picked up by Rolling Stone only.

    “Inside Job” is an excellent documentary that ties all these crooks, Wall Street, Banksters and the White House together going back many years. Our government seems to be in place to be self-serving and assisting the professional crooks!

    I have to state though that we have had the very same situation back in 1912 and it took one senator, Charles Lindbergh Senior, to investigate this and put a stop to it.

    Who is on our side now?






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