All the Devils Are Here: The Hidden History of the Financial Crisis
by Bethany McLean and Joe Nocera. New York: The Penguin Group, 2010. xviii, 380 pp.
Bethany McLean is a writer for Vanity Fair, former writer for Fortune, and coauthor of The Smartest Guys in the Room, an analysis of what went wrong with Enron. Joe Nocera is a business columnist for The New York Times, former editor with Fortune, and a finalist for the Pulitzer Prize in 2006.
The goal of this book is to lay out the case for what went wrong in the worldwide financial crisis that began in 2007 but actually had its roots more than 30 years earlier. Step by step, the authors show how diverse and seemingly independent players (banks, mortgage lenders, appraisers, congress, regulators) each contributed a piece to the complex disaster that had its impact from Wall Street to Main Street to the world. Most importantly, the authors show how the pieces fit together — the independent players were not independent. Complexity played a part, but so did good old fashioned greed. This is a fascinating and ugly picture.
The book is filled with anecdotes and quotes gathered by the authors, making the book come alive with real people and real emotions. It is not just about structured investment vehicles, Wall Street transactions, and fraud. Under the authors’ well written prose, the story is made understandable with biases, ideologies, and backgrounds of the various players. After reading this book, it will be difficult to offer simplistic explanations based on just a small subset of the factors.
I have a couple of minor criticisms. The chapter titles are “cute” but not helpful when using the book as a reference. The content picks up one strand or another (bankers, regulators, etc.) but this is not obvious from the titles (“The Carnival Barker,” “The Wrap,” etc.). The “Hidden History” claim in the title is a bit misleading as well. Most of the pieces have been widely discussed, but it is the integration that makes the book.
I had hesitated to read the book only because I have read eight to 10 other books on the subject, and felt I understood the picture pretty well going in. In fact, in the first half of the book, I felt like I had read it all before. However, the last half of the book helps put the pieces together in a way that many of the other books had not, and I believe this is worth reading even for those who know quite a bit about the subject.
For those who have only listened to sound bites on CNN or Fox News, this is a must read.
Reviewed by Al Erisman