I just finished reading Bob Ivry’s The Seven Sins of Wall Street. It was very credible. I’ve read a few books on the topic, mostly by libertarian-leaning authors, but this one goes a little deeper. Ivry, as an investigative reporter for Bloomberg News, had better access to people and numbers than the other authors. Also to his credit, he acknowledged that unlike in intentionally or unintentionally fictitious accounts, there are a lot of loose ends in the real world. The way the available dots were aligning, though, was scarier than I had suspected.
He related stories of people who had been suckered into high-risk loans, stuff with which most people are familiar by at least second-hand experience. But he also told how some of these people were not dumb, they were swindled. Customer service representatives directed in large numbers victims of errors on their mortgages, systematically favoring the banks, to government programs rather than fixing the booboos. People making consistent payments were treated as if they had defaulted, and many who could not afford a lawyer responded accordingly.
Chicanery, nepotism, and incompetence in America’s big banks has been thoroughly aired, but Ivry’s presentation left the reader seeing the banks as empty shells. Numbers obtained by Bloomberg on the Fed’s propping up of the cronies in addition to the TARP bailouts, show millions and billions of taxpayer subsidy for mismanagement, whether through incompetence or criminal acts.
The book is well-written except Ivry, probably intentionally trying not to appear like a free-marketeer, typoed “Ludwig van Mises.” Ivry also advocates for more regulation to “make” banks smaller, when it would be so much simpler to, as he even suggests, undo the special legislation and special exemptions therefrom that perpetuate the unholy alliance between big government and big spenders.
