This book is designed to unravel the tangled threads of that story. It also attempts to determine whether what is being done to deal with the problem is more likely to make things better or worse.
©2009 Thomas Sowell; (P)2009 Blackstone Audio, Inc.
"Among economists of the past thirty years, [Sowell] stands very proud indeed." (Wall Street Journal)
Thomas Sowell does just what you would expect him to--get right at the root problem of the financial crisis with all the important facts, lucid analysis, and clean prose. In that sense, this book is the definitive overview of the genesis and trigger of the 2008 financial crisis.
On the other hand, I was disappointed that he did not go into the derivative problem--what the finance industry ("Wall Street") engineered out of the underlying fundamental mortgage securities, and the collusive relationship of that end of the industry with Washington DC.
Whereas Sowell's treatment of the primary phenomenon is outstanding, he seems uninterested in the secondary problem, remarking in passing that if everybody had kept paying their mortgages, there would not have been a problem. In that sense, this book is a missed opportunity for one of the finest minds of our time to fully analyze the financial crisis.
I guess you could say I was tricked into getting this book. I had been looking for a book that gave an in depth layout of all that happened during the housing crisis and saw several very positive reviews from other members saying the author was very in depth and unbiased in his account. I already had a good understanding of it from some of the other books and essays I've read on the subject but was hoping to find something that really went in depth and covered all aspects, this book did not even come close
I will admit, the author did make some good points in regards to things like the unwarranted push to end discrimination of minorities in mortgages or how section 8 vouchers are not really needed and only tend to bring down an area(I've lived in an area like that, it happens). However, he fails to bring up, or downplays some very large causes like the creation of credit default swaps or the repeal of Glass-Steagall(which was not even mentioned!!!). He used a lot of cherry-picked facts to portray the banks as being almost without fault and the government without benefit to support his cause and to make it sound like he was thorough in his research. There was even a chapter solely devoted to how the Government solely caused the Great Depression and then how FDR made everything worse by trying to help. Now granted, there is some truth to the role of the Government in causing the Great Depression, but there is a great deal of debate among economists as to how much and whether FDR did help or not. The problem I have with him is that he displayed his opinion as an absolute fact rather than tell the whole story.
Overall, this is just another case someone having an opinion and then finding ways to manipulate facts and ignore others to try to prove his point. He does point out that he was one of the few that predicted the housing crash, but one correct prediction does not mean that everything else you say is the absolute truth. I would imagine that someone who perhaps enjoys listening to Sean Hannity or Rush Limbaugh would also enjoy this book, but for those looking for a serious evaluation of the housing crisis and the following recession should look elsewhere. Unfortunately, it is very difficult to find someone who is truly unbiased on their assessment of the issues we have been facing.
The final thought I want to leave you with is this. Macroeconomics is an infinitely complex and still fairly poorly understood science. The recent housing crisis and recession is also incredibly complex. How in the world can you expect to explain it thoroughly in a mere 4 1/2 hours?
Best one so far (I haven't heard many, so this doesn't help much)
It really helped me understand the financial collapse in 2008. I had bits and pieces of what happened and this really brought everything together.
I think the narrator did a sufficient job, which I will define as "did not distract from the message of the book".
No. Funny question for this type of book!
Thomas Sowell writes well and seems to base his beliefs on empirical evidence rather than emotion. This is very much needed in economics, so I encourage anyone who is interested in economics to read this book.
This book only tells part of the story, and slants what it tells to the point of becoming more of a political tract than an explanation of what occurred in the financial crises and, more importantly, why. The book is replete with small inaccuracies and omissions - too many to recant here - but, it misses even the bigger, more important parts of the story. Government policy and the excesses and abuses of Fannie Mae and Freddy Mac certainly contributed to the outcome. But to not call into account those "hard money" lenders and mortgage providers like Ameristar, Countrywide and Long Beach Savings is inexcusable. They, and many others like them, set up business models to offer exotic mortgages to sub-prime and near-prime customers which earned them fat fees, while passing the mortgage (and risk) to Wall Street and large banks. These financial institutions with very little due diligence then converted them into bonds and derivatives (not stocks, as the author states more than once), got great AAA and AA ratings put on them and sold them world wide (including those originating in Fannie Mae, etc). There are lots of books that will recount what happened: Too Big to Fail, In Fed We Trust, House of Cards, to name some of the better ones. Some that give you a glimpse of why: All the Devils Are Here and The End of Wall Street are good examples of that. This book is so narrow in its focus that it will do neither for you.
Sowell laid it out plainly and simply with the inclusion of a broad set of facts and supporting data. Copious amounts of greed (corporate, individual and government personnel), ignorance, and arrogance were the cause of this crisis. No wonder Dr. Michael Savage calls Liberalism a mental disorder...
Software engineer and avid, lifetime student. I like deep, thoughtful non-fiction, and fiction that compliments and enriches it.
Thomas Sowell seems to have a problem thinking about the consequences of his own conclusions, and he doesn't seem to question his own beliefs or even question what types of evidence are required to support his conclusions (which is the same problem with another book of his - Economic Facts and Fallacies).
If you have even a basic understanding of economics, politics, or the real dynamism of the modern world, you will be able to easily see problems with virtually every point Sowell states. And the frightening thing is that, especially since the book is only 4 hrs 45 minutes, he drops amazingly unsupported conclusions with little if any supporting evidence. At times, unless he is simply a fool (I don't think so), he appears to even be willfully deceptive.
One instance I remember clearly comes in the last chapter, where Sowell blends the history of The Great Depression with the 2008-2014 economy, stating that while many people believe the increase in government spending during the build-up to World War II is what ended The Great Depression, (he says) this is incorrect, since the federal "deficit" was greater in 1936 than in 1939. An uncareful reader - or one that is simply looking for pseudo-intellectual support for their conservative beliefs - might feel this is a valid argument. However, "deficit" is [tax revenues, etc] minus [spending]. That means the size of the "deficit" is meaningless for determining whether a government is engaging in stimulus or austerity - you have to look at how total spending has changed, how tax revenues have changed. Changes to tax policy (who pays how much) have a significant bearing on the degree of stimulus vs austerity that is in effect. These nuances are lost on Sowell, apparently. To him, the pointlessness of government stimulus is apparent by simply comparing the nominal federal deficit between the worst years of the Great Depression and the pre-World War II recovery. He goes so far with this presumption as to conclude that The Great Depression did not end as a result of New Deal programs, but rather ended because World War II ended New Deal programs!
Reversing common perceptions of cause and effect is something Sowell is fond of offering up as thoughtful analysis, though he never comes close to even attempting to look at the timeline of events to check whether this revisionism is correct. For instance, he says that since "Smart Growth" government policies existed (policies that preserve parks and green spaces from being converted to suburbs, etc) as housing prices increased, therefore these government policies explain the housing bubble, such as in California. He uses Dallas as more evidence, saying that Dallas did not have "Smart Growth" policies restricting land use, and also did not have as much of a housing bubble. He is oblivious to the inherent limits on preferable land caused by California's coast-line. He makes no attempt to reconcile the quantity of "Smart Growth" land against the actual demand for land and housing that drove up prices. He also makes no attempt to mention or reconcile the fact that the increase in housing prices just happened to occur in localities that also saw large increases in wealth - like the tech wealth of Silicon Valley and Redmond, Washington, and the lobbying wealth of Fairfax, Virginia (just to name a few examples).
Further, Sowell makes no attempt to reconcile his position with the fact that most of the sub-prime mortgage bubble was due to re-finances - people who were simply accessing the appreciated value of the home they were already living in.
To hear Sowell's telling, there were really just two main causes for the 2008 crisis. Government politicians, distorting the market. And irresponsible borrowers, signing up for loans they could never sustain - which he actually refers to as "less-educated" at one point. He sprinkles in a few secondary influences here and there, such as "speculators" (ie, home-flippers, though, curiously, he also never tries to reconcile the temporary entrepreneurship of home-flippers against irresponsible, less-educated borrowers that just don't understand the mortgage they signed). But overall, this is a book where over and over again, the root of the problem is government and politicians and the financially irresponsible (and uninformed) masses they serve, and the victims are always the virtuous market and bankers who find themselves persistently compelled to act against their "years of experience" of prudent lending.
It's a wonder Sowell resisted throwing in a few Ayn Rand "at the point of a gun" references.
In sum, whether you are a novice or expert in economics, you are best off reading something else. This book isn't even useful for knowledgeable people to learn what the Libertarian-Conservative counter-position is, because the arguments are so superficial and undeveloped that it just amounts to a painful-to-listen-to list of Ron Paul-like sound bites.
I only give 2 stars on the Performance because the reader, as in Sowell's other book(s), is like listening to the voice of recorded instructions played at an airport - a smooth, deep voice giving you directions, and your job is to just listen and heed the voice.
Not having heard of Thomas Sowell, I chose this book hoping for an objective analysis of the housing boom and bust. I wanted to learn more about what happened. Instead, it became clear at the outset that Sowell was emphasizing the facts that best would support his libertarian opinions.
Change the title to make it clear this was a polemic, not an objective analysis.
Narrator was excellent - wonderfully clear, baritone voice.
It was clearly well researched, and the author's points were well documented. Unfortunately, all the facts were selected to support the author's opinions, not to provide a total picture.
From what I have read elsewhere, the crisis was caused by a combination of misguided government incentives (maybe 25%) and wild, unregulated greed on the part of financial institutions (maybe 75%). Sowell would have us believe the ratio is more like 95% to 5%. This is just not believable, and it leads us to the dangerously false conclusion that we need less bank regulation, not more. It makes you wonder if Sowell has a side business as a banking consultant.
I live in syracuse Utah, not Florida.
I do not recommend this book to anyone seeking additional clear, factual information on housing policy.
Through-the-looking-glass economics. Present crisis (as well as the length of the great depression!) due not to market failures but government intervention by silly social activists. Clever, intellectually entertaining -- but make no mistake a work with a right-wing laissez-faire axe to grind. Barney Frank a principal villain. I came, I heard, I gagged.
I listened to two chapters and grew tired of the single source of blame that is poorly constructed in the book.
I will sum this book up very simply as EVERYTHING to do with the crash was because of TOO much government. It is bias dribble, that adds nothing to the debate to solve any problems. If you believe that extremes of left or right are the only solution, and there is no such thing as reviewing failed or flawed ideals, then enjoy.
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