One-Minute Book Reviews

May 21, 2009

Kate Kelly’s ‘Street Fighters: The Last 72 Hours of Bear Stearns, the Toughest Firm on Wall Street’

As a rule, the business of business books is anything but good writing. But the Wall Street Journal ran an excerpt from a new book by one of its reporters, Kate Kelly’s Street Fighters: The Last 72 Hours of Bear Stearns, the Toughest Firm on Wall Street (Portfolio, 256 pp., $26.95), that had sprightlier writing than most in the category. And Tim Rutten quotes a telling paragraph from this hour-by-hour account of the last days of the Bear Stearns investment bank in his Los Angeles Times review:

“Regulators may never know what really happened [to cause Bear Stearns to collapse in 2008]. But one thing is clear: Once confidence in a company falls away on such a grand scale, it can never recover. Bear started that week with more than $18 billion in capital, its largest cash position ever. Three days later, negative headlines, a stock drop, lender reticence and big withdrawals from client accounts had cut those capital levels in half. Eight hours later, it was nearly dead.”

The first sentence of that paragraph, Rutten rightly notes, is chilling: “Regulators may never know what really happened.” He adds:

“ … this was a situation so threatening to the fabric and substance of global finance that Federal Reserve Chairman Ben Bernanke would subsequently insist that, absent government intervention to essentially force the deal with JPMorgan, Bear would have gone into bankruptcy, causing a ‘chaotic unwinding’ of investments in all the American markets.

“Yet regulators may never know what really happened.

“That’s the intolerable fact of public policy on which this whole mess turns, along with all the pain it set rippling through the nation’s human economy, the one where ordinary people struggle to pay the deceptive mortgages that backed all those derivatives and where women and men who’ve lost jobs as a consequence of this calamity now scratch to find new livings.

“There are timeless human failings to ponder anew in Kelly’s artful narrative journalism — ego, hubris, venality and folly, the whole sad crew. They, unfortunately, will always be with us, consequences of our fallen nature. What we need not tolerate is a federal regulatory structure that is blind to the operations of those who wheel and deal at the very center of the global economy and federal officials who are so uncertain of their aims and prerogatives that they fumble in the face of crisis.”

www.twitter.com/janiceharayda

April 16, 2009

In the Land of the Jane Fonda Urinal Target — ‘What’s the Matter With Kansas? How Conservatives Won the Heart of America’

[You can find some of my comments on the 2009 Pulitzer Prizes for books, which will be announced Monday, at www.twitter.com/janiceharayda.]

How ignoring the economy and lifting up wedge issues got us into a mess

What’s the Matter With Kansas? By Thomas Frank. How Conservatives Won the Heart of America. Holt, 336 pp., $16, paperback.

By Janice Harayda

Why did the Republican Party for years attract so many Americans who recently have lost their homes, jobs or life savings to its policies? How did the GOP recast itself as the party of working-class voters, who for generations had lined up behind the Democrats?

Thomas Frank gives bracing and witty answers in What’s the Matter With Kansas?, a former New York Times bestseller that is still one of the best books on the political roots of the current fiscal mess. Frank argues that for decades, Republicans have been eroding the traditional Democratic base by focusing on wedge issues such as abortion, gun control, and “filth” in the media, not on the economic policies that separate the parties. And since the Clinton administration, the Democratic Leadership Council has played into their hands by promoting “triangulation,” a business-friendly stance that downplays its differences with the GOP.

The result: The line between the parties blurred, and year after year Americans elected Republicans whose laissez-faire economic policies eventually would wipe out their 401(k)s.

Frank refracts the changes through his native Kansas, once a hotbed of progressive ideals, a state that has paid a scalper’s price for its march to the right. A portent of the American economic meltdown occurred when the attacks of Sept. 11 halted the orders to the Boeing, a mainstay of the Wichita economy. The aircraft manufacturer laid off many union workers and said that, this time, their jobs wouldn’t be coming back.

“In the summer of 2003, unemployment in Wichita passed 7 percent and foreclosures on homes spiked as these disasters reverberated through the local economy,” Frank writes.

But Kansans didn’t seem blame the Republican union-busting policies exemplified by Ronald Reagan’s decision to fire striking air traffic controllers. The state went for George Bush in 2004. And Frank’s pessimism about its political climate seems well-founded, if not prophetic, given the economic free fall that has occurred since the publication of his book. Even as the recession was spreading around the world, Kansas voted Republican in the 2008 presidential election.

Best line: At Kansas Vietnam Veterans reunion in 2002, trinket vendors sold “such items as the Jane Fonda urinal target.

Worst line: Frank describes how the national swerve to the right affected his hometown, the affluent Mission Hills, Kansas, and says you “can observe the same changes” in Shaker Heights, Ohio. No, you can’t. Parts of Shaker Heights — where I lived for 11 of the years when those changes supposed to be occurring — may look like Mission Hills with its castellated stone fortresses. But the Cleveland suburb is 10 times the size of Mission Hills, has a far more diverse population, and for other reasons does not fit the pattern he describes. Shaker Heights has lost enough of its cachet in the past several decades that the elite suburbs now lie farther to the east. Those suburbs include Hunting Valley, which more closely resembles his hometown.

Editor: Sara Bershtel

Published: June 2004 (hardcover), April 2005 (paperback).

Furthermore: Frank’s latest book is The Wrecking Crew: How Conservatives Rule.

Janice Harayda is a novelist and former book editor of the Plain Dealer in Cleveland.

© 2009 Janice Harayda. All rights reserved.

December 1, 2008

Books About Financial Crashes, Panics, Bailouts and Meltdowns

Filed under: Nonfiction — 1minutebookreviewswordpresscom @ 12:06 pm
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Back in October, Martin Mayer described his five favorite books on financial meltdowns to the Wall Street Journal. One that has since remained timely: Irvine H. Sprague’s Bailout (Basic Books, 1986). Mayer told the Journal:

“Bailout is a superbly honest first-person account of the big bank traumas of the 1980s, written by a long-term director of the Federal Deposit Insurance Corporation. Irvine H. Sprague lived through it all – the collapse of Commonwealth Bank of Detroit, First Pennsylvania of Philadelphia, Penn Square of Oklahoma City, Seafirst of Seattle, Commonwealth of Chicago. … He wrote the book, he says, to show how banking regulators make decisions, and after reading Bailout we do in fact know more about how the sausage got to be sausage. He leaves us with a question: ‘Should megabanks continue to receive favored treatment?’”

Mayer also recommended Charles P. Kindleberger’s Manias, Panics, and Crashes (Basic Books, 1978), Stephen Fay’s Beyond Greed (Viking, 1982), Roger Lowenstein’s When Genius Failed (Random House, 2000) and James Grant’s The Trouble With Prosperity at online.wsj.com/article/SB122367719361224329.html. And Steve Fraser deals with financial crashes and panics as part of his brief and well-written new history of Wall Street Wall Street: America’s Dream Palace (Yale University Press, 2008) www.oneminutebookreviews.wordpress.com/2008/10/27/.

© 2008 Janice Harayda. All rights reserved.

September 22, 2008

Late Night With Jan Harayda – Steve Fraser’s New ‘Wall Street’

Filed under: History,Nonfiction — 1minutebookreviewswordpresscom @ 10:58 pm
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How long will it take Americans to recover from the latest upheavals on Wall Street? Steve Fraser makes a useful distinction between psychic and economic recovery his new Wall Street: America’s Dream Palace (Yale University Press, 200 pp., $22), a brief history of the Street yalepress.yale.edu/yupbooks/book.asp?isbn=9780300117554. After the Crash of 1929, Fraser writes: “Psychic recovery took longer than economic rebirth. A national preoccupation with security and an aversion to risk lasted for a long generation.”

© 2008 Janice Harayda. All rights reserved.

September 15, 2008

Remembering ‘Black Tuesday,’ Oct. 29, 1929, on Wall Street and a Crowd ‘Wild-Eyed’ With Fear — How Much Worse Could It Get Than Today’s 500-Point Stock Market Drop?

Filed under: Quotes of the Day,Young Adult — 1minutebookreviewswordpresscom @ 5:46 pm
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Today’s 504.48-point stock market plunge may stir fears of another “Black Tuesday.” How did New Yorkers react when the market crashed on Oct. 29, 1929? Catherine Gourley writes:

“On that overcast autumn morning in New York City, rumors swirled through the narrow streets like wind. Something had gone terribly wrong. The stock values weren’t just dropping. They were crashing. America’s banks and businesses were losing money. By afternoon ten thousand people had jammed the streets and sidewalks. Some had climbed onto the statue of Alexander Hamilton outside the stock exchange building because it was the only space left to stand and wait. A reporter for the New York Times described the crowd as ‘wild-eyed’ with fear. Men wept. A few days ago they had been wealthy. Now they were penniless.”

Catherine Gourley on “Black Tuesday” in War, Women, and the News: How Female Journalists Won the Battle to Cover the World War II (Atheneum, $21.99, ages 10–14, 2007) www.simonsayskids.com, a nonfiction book about some of the country’s greatest war correspondents.

(c) 2008 Janice Harayda. All rights reserved.

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