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Book Review: Bull by The Horns by Sheila Bair

Posted by Larry Doyle on May 24, 2013 7:55 AM |

I am a Sheila Bair fan.

Throughout our continuing economic crisis, I have found the former chair of the FDIC to be an individual who tried to do what was right on behalf of the American people while promoting the rule of law and principles of free market capitalism. I juxtapose those strengths with practices pursued and implemented by an array of government officials, financial regulators, and their financial consorts.

I recently completed Bair’s book, Bull By The Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself, and would give it a 4+ star rating.

At times, Bair’s writing drags the reader into a morass of excessive minutiae. I found myself skimming through some of those chapters. More often than not, though, Bair brings the reader into the arena and exposes the conflicted interests of those more aligned with the financial industry than the American people. In doing so, she too highlights the point made by Ron Suskind in Confidence Men that despite what past and current administrations might like to profess, ultimately virtually every critical decision relating to our economy and markets fell into the hands of four men: Henry Paulson, Tim Geithner, Larry Summers, and Ben Bernanke.

Bair pays Bernanke plenty of respect. She does not expound too extensively on Paulson and Summers. She directs her ire extensively toward Geithner and zings him and other members of “the club” often throughout the book. The WSJ highlights the following excerpts:

Treasury Secretary Tim Geithner “looked like a scared little boy” at the press conference where he announced the 2009 stress test initiative. He was chosen to be Treasury Secretary “for all the wrong reasons . . . That ill-fated choice was painfully apparent as he struggled to get the words out, his voice at times quivering, his eyes darting nervously back and forth across the room.”

Citigroup’s Vikram Pandit “wouldn’t have known how to underwrite a loan if his life depended on it.”

The Obama administration’s 2009 plan to help struggling homeowners “was doomed to failure,” “cheated borrowers” and was “designed to look good in a press release, not to fix the housing market.”

Bair writes an excellent book and provides a good outline as to steps that “should” be undertaken moving forward; however, I found myself wanting more from her. She gives us a whiff but not a full course in taking aim at the destructive elements and outcomes emanating from our Wall Street – Washington incestuous dynamic in some of these concluding remarks:

“It mystifies me why people take government jobs if they don’t want to act for the common good. That’s what taxpayers pay us for. Some government officials today, I think, just want to “be’ — they want  the title, the office, the trappings of power. But they don’t “do”,  particularly if it risks their reelection prospects.”

Give me more.

“The “truths” that form the bedrock of our democratic culture fell out of favor in the first decade of the twenty-first century. Personal accountability, honest dealing, the right to reap the rewards of your hard work and entrepreneurship, the obligation to suffer the consequences if you fail — those were the kinds of ideals most of us grew up with, but they were forgotten in the shortsighted avarice that consumed our financial markets.”

Now we’re talking. In regard to those in bed with Wall Street and Washington:

“The problem is that the financial regulatory system is so insular; regulators start to confuse what is best for large financial institutions with what is best for the broader public. . .When regulators confuse their regulatory mandate with maintaining bank profitability, the inevitable outcome is the system we have now — timid regulators fearful of being too tough on financial institutions because of the negative impact on their bottom lines. Members of Congress, fed by generous campaign contributions, as well as prospects of employment for themselves and their staffs when they leave office, can also be a part of the problem . . . I wish I could say that Congress serves as a disciplining influence on the regulatory process, but throughout my career I have observed just the the opposite.”

Bair strikes me as too deferential in addressing this insidious cronyism.

I won’t be.

Our supposed leaders on Wall Street, in Washington, and within regulatory offices involved in this corruptible cronyism are killing America.  

I welcome recommending Ms. Bair’s book.

Navigate  accordingly.

Larry Doyle

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I have no 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.

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