It Takes a Pillage: An Epic Tale of Power, Deceit, and Untold Trillions

Pssst. C'mere. I have a deal for you. You see, I have some gambling debts and the loan sharks are starting to eye my kneecaps, so I need a bailout. Here's the deal: you give me a million bucks and I'll invest it at the craps table. If I win, I'll give you your money back (well, maybe most of it). If I lose, well, sorry about that. Maybe if you loan me another million...?What, no takers? I can't believe it. I guess I must not be as persuasive as Henry Paulson. Because that's roughly the deal he snookered every American taxpayer into. Well, if you multiply that by orders of magnitude, that is.In a dizzying account, Nomi Prins, a former Goldman Sachs and Bear Stearns insider turned investigative journalist, details the events that led to the financial crisis - which Prins dubs the "Second Great Bank Depression". She takes us inside the ins and outs of the Wall Street wheeling and dealing that created behemoth "supermarket" banks which were "too big to fail" (or, as Prins puts it, "too big to succeed"). She details the political power plays that dismantled many of the regulations which were put in place after the (first) Great Depression to protect American consumers and taxpayers and prevent the public from taking on huge risks associated with giant conglomerations of banks engaged in risky speculation propped up by government largesse (i.e., our money).I'm no financial guru, and I probably never will fully get my head around the structure of the financial world of "credit default swaps" and "asset backed securities" being "sliced up" into "tranches". Nonetheless, Prins paints enough of a picture of these bank "products" to give even a layman a sense of how risky they are.Call me old-fashioned, but am I the only one who gets a little queasy when words like "creative" and "innovative" are used in connection with banking and accounting? It's sort of like the English teacher who tries to be "creative" with spelling and grammar. Such things are supposed to be rather boring because they're fundamental.This book is rather repetitive. At one point Prins even apologizes for beating the dead horse of Glass-Steagall. However, such repetition is probably necessary because that regulation (and other similar ones which Prins covers) is probably the biggest factor leading to the Second Great Bank Depression. I couldn't begin to cover all the ins and outs, but basically Glass-Steagall was a law implemented after the Depression in the 1930s which separated commercial banks, which provide loans to consumers based on consumer deposits, from risky investment banks which exist to speculate and take risks in order to earn large rewards. The government backed consumer deposits and commercial banks to protect both consumers and the banking industry. Investment banks, on the other hand, were left free to speculate and invest, but their risks were solely on their own books, not the public dole. Other regulations prevented large banks from merging with each other and creating overly large conglomerates. That way, no one bank was "too big to fail". Bad banks could be allowed to fail without creating any overarching crises.But over the course of the last 30 or so years, and especially since the Clinton and Bush 43 eras, almost all of those regulations, especially including Glass Steagall, have been rolled back or repealed entirely and banks have gleefully merged and acquired each other with abandon. Investment banks were then free to merge with commercial banks and use their large pools of consumer dollars as collateral for risky investments which were backed up by the government through various name changes, such as becoming "bank holding companies" or other similar entities. Also, the barriers between banks and other financial-related companies such as insurance companies were dissolved. The result was an orgy of greed and speculation among Wall Street banks and financial firms which resulted in the largest ever transfer of wealth from ordinary Americans to already obscenely rich executives.Furthermore, because these banking leviathans are backed by the government, we, the American taxpayers, not the Wall Street executives, shoulder the risks of this speculative greed. As mortgage-backed securities began to fail during the early days of the foreclosure crisis, the enormous house of cards built on top of bad mortgages began to teeter, which is the real reason credit became frozen. The government, originally led by Bush 43's Treasury Secretary Henry Paulson, stepped in to bail out the banks while failing to help a single American homeowner.Prins destroys the notion that greedy homeowners were responsible for the Second Great Bank Depression, although I wish she had covered the right-wing's favorite whipping boy, the Community Reinvestment Act, in a little more depth. Even if every American homeowner defaulted on their mortgage, the government could, if it so chose, bail every one out for a small fraction of the trillions that have been poured into the bailout of the banking industry.Lenders deliberately pushed borrowers into risky mortgages knowing that there was a likely chance that the mortgage would fail. However, it didn't matter because the lenders assumed they'd always be able to re-sell the underlying home for more than the bad mortgage was worth, since it was assumed that housing prices would continue to rise. Furthermore, these bad loans were repackaged and sold as securities on various markets. And those securities were further structured and sliced and diced and re-sold. When housing prices slowed and eventually declined, the securities built on top of those "assets" fell apart and became "toxic".But you needn't fret about those poor Wall Street executives who had so much riding on those toxic assets. Using your money, the government - mainly the Federal Reserve and the Treasury Department - swooped in to save Wall Street. But, unfortunately for you, you'll probably never know how most of your money was spent because, as a public-private entity, the Federal Reserve is immune from ordinary audits, as are the banks which received our largesse. Prins and her staff, using exhaustive research, followed the money as far as they could and the numbers are staggering. But Prins admits that the numbers to present a full picture simply aren't available, so we can only imagine how much more staggering the reality is.Prins ends with heartfelt - but probably hopeless - pleas to restore the regulations implemented after the Depression: re-implement Glass-Steagall to restore the barrier between commercial and investment banks, restore the barrier between banks and other financial companies, re-implement sensible limits on how much a bank is allowed to borrow based on ratios to their deposits and other assets, impose transparency and accountability on the Federal Reserve, end the "revolving door" between Wall Street and the agencies which are supposed to regulate Wall Street. All of those are definitely worthy and much-needed steps to restore some semblance of sanity to our financial system so as not to have- and soon - a Third Great Bank Depression. However, considering that both parties basically represent corporate interests, and with the Citizens United Supreme Court decision which basically allows corporations to spend as much as they like buying elections, I don't foresee any significant changes. Until it gets bad enough that Americans get off their collective duffs and take to the streets like the Egyptians have the past two weeks, nothing is going to change.I recommend this book to every American. Even if you don't understand all the details, you'll understand enough to see that you're getting screwed, and maybe enough people will start to care enough to do something about it. Or, as Dr. Seuss put it, "Until someone like you cares a whole awful lot, nothing is going to get better. It's not."

It's depressing! A tale of woe without any resolution! Shrill and polemical! Terribly written! Unconscionably repetitive! Disgustingly predictable! No surprises whatsoever, if you've been paying any attention to the world for the last thirty years! The same story already told by Robert Scheer -  The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street  - and half a dozen others! The sort of book you want to hurl violently at the smug face on your TV of whichever Fox News 'ranting head' happens to be lying to you at the moment! A horrible book, I say!Wait, wait! Why five stars then???Because it's a necessary horror story. Because only the full weight of information and analysis can shake enough people by the scruffs of their necks to take effect. Because author Nomi Prins knows so much more about 'high finance' than she does about literary craft, and of course so much more about Wall Street than I, or probably you, know.This is the gospel truth about how politicians of both parties, some seduced and some merely misled, have collaborated with bankers and brokers in pillaging the national treasury and demolishing the American and global economies, at least as those economies affect the "99%" who haven't been bailed out, rather than the 1% who stood to lose some millions out of their multi-billions without the 'generous' support of taxpayers. This is the tale of the Deficit that ate Democracy. This is the gothic novel of insatiable werwolves and wer-economists, shape-changers who are CEOs one month and economic advisors to Presidents the next. But unlike Robert Scheer, Nomi Prins pays scant attention to Clinton/Bush/Obama, none of whom are 'major players' in the world of finance. Hey, why blame the Politicians, when it's really been the Capitalists -- the 'swinging door' CEO-to-Secretary of the treasury types, Rubin, Volcker, Paulson, Greenspan, Bernanke, Geithner, Summers, inter alia in interchangeable order -- who have engineered the debacle? To blame the pols is like blaming the victim! After all, who was seduced and/or raped first but our own elected Representatives and our Republic?This book was published in 2009! Presumably written before that, n'est-ce pas? One of the chapters is titled "Everybody Saw This Coming". That's perhaps an exaggeration, but indeed a lot of people saw it coming as early as the tax-reform fiascos of Ronald Reagan's terms, and a lot of people who responded to the Great Depression of the 1930s would have seen it coming if they'd lived long enough. Those survivors of the 1929 Crash and the subsequent Bank Depression responded by creating a makeshift, imperfect, but effective regulatory system, especially with the Glass-Steagall Act; it was the reckless demolition of those regulatory structures, Prins demonstrates, that made the meltdown she labels "The Second Bank Depression" inevitable. But what was behind such folly? Greed? Prins argues that greed is secondary to the egomaniacal lust for power and prestige that lurks in the black heart of every Wall Streeter. But greed will do as an "prime mover", it seems to me. Greed and dogmatism, and too early exposure to the novels of Ayn Rand.The outrage that Prins expresses is essentially the same as the less precisely documented rage of the "Occupy Wall Street" movement. The premises are so close that one might attribute the fury of the "occupiers" to having read "It Takes a Pillage", except that most of the protesters in the street have gained their insights from hard experience rather than from reading. The media pundits have concerned themselves with scorning the 'Occupiers' for lacking explicit demands, but realistically demands can only follow an explicit recognition of grievances. That's the utility of this book, even three years into the presidency of Barack Obama: to enunciate the grievances, to point the finger at the malefactors, to name names.Then, the fundamental demand isn't so difficult to state: reconstruct the regulatory mechanisms! What America needs is not "smaller" government, but rather "better" government, with higher and stouter walls of separation between Wall Street and Washington. After all, as Robert Frost said, "Good fences make good neighbors!"

opens your eyes to the truth of the USA and the west in general or humanity for that matter

Essential reading for anyone who wants to know who really won or lost in the aftermath of the 2008 GFC. Nomi Prins has, through diligent research, condensed a vast amount of data into a very readable summary of the actual beneficiaries of the enormous bailout funds. It is truly a shocking tale!

A must read

著者は美女で元ウォールストリーター（ベアスターンズとゴールドマンサックスに勤務）。金融危機対処におけるカネの流れをネチネチと告発していく。ナラティブというよりも、税務署が脱税人を追い立てるような（←｢マルサの女｣からのイメージ）書き方になっている為、ワタシなどはビリオン、トリリオンが飛び交う中で途中から何が何だか、目が滑る滑る。TARPを金融機関救済の為に使うか住宅差し押さえ回避援助に使うかというので揉めていたなあと記憶にある人はいらっしゃるだろう。財務省とFDICの間で確執があったらしいことも。しかし相当のニュース好きでもない限り、｢その後｣の追加救済やらナントカ保証やらのニュースを逐一追っていた方は少ないはず。しかしTARPなんてのは氷山の一角、議会をスルーして利用出来るFRBのバランスシートを使いつつあの手この手で16兆ドル（MMファンド保証の３兆ドルを除き）もの税金が金融システム救済というブラックホールに呑み込まれていったのである、我々が知らぬ間に、と著者は粘着質の語り口で明細書を提示していく。そして｢そのカネは絶対に返ってこない｣｢金融機関は返せない｣｢ウォールストリートが私腹を肥やすだけのことだ｣と断言する。ハンクとティムとベンの三人衆を大悪人として指さしつつ、｢これは危機を逆手に取った未曽有の『富の略奪』である｣と訴える。よって｢It takes a pillage｣のタイトルだ。いままで読んだ金融危機関連本は数十冊だろうが著者が女性の本はかっきり二冊のみである。サンプルとしてはあまりにも貧弱だが、女の方がいわゆる｢ウォールストリートの偉いさんたち｣を見る目が冷たい。この著者などは実にビッチーで、怒りで冷え冷えとしている。男性ジャーナストの中にはたまに目がハート型になっているのがいたりするので、面白い…などとアホな感想になっているが、二十年くらいかけて蓄積された大規模なシステムブレークダウンなんだろうなあと遠くからボンヤリ眺めている人間にはこの著者さんの主張の正当性は判断しようがない。しかし情報満載なので、ご興味のある方には貴重な一冊だろう。