A review by trudilibrarian
All the Devils Are Here: The Hidden History of the Financial Crisis by Bethany McLean

4.0

Shakespeare wrote: Hell is empty, and all the Devils are here. I'm going to zombify this sentiment just a tad by saying what I know to be true: There is no more room in Hell, and the Devils now walk the earth. Oh yes...they do. Is there any doubt? Little ones and big ones, all spread out like an infection. And if there's a cure to wiping them off the face of the planet and sending them back to Hell it's yet to be implemented because apparently it takes balls and brains and a pretty reliable moral compass (all of which are in very short supply at the top where it matters most).

Here are a few things I've come to understand and firmly believe: Greed -- for lack of a better word -- is not good. Greed in fact, turns people into out-and-out sociopaths (if they weren't already). Greed makes people cheat and lie and break the law. If the stakes are high enough, greed can and will topple global financial institutions. It can perpetuate a form of terrorism that should leave us quaking in our beds at night because the kind of sickly, lustful, unchecked greed which motivated sub-prime mortgage lending, the deregulation of banks, the stratospheric rise of predatory lending, unregulated derivatives, CDOs and credit default swaps is the kind of greed which cost millions of people their jobs, homes and pensions not just in the United States, but all over the world. We're talking pandemic here. In the interconnected global world market, the reality is these days no one is safe. Everyone is in bed with everyone else, and nobody is wearing a condom.

Here's something else -- the "free" market is not self-disciplined or self-regulating. You know why? Because it is an artificial construct made by humans to self-serve humans. It can be manipulated in a thousand million different ways. The "free" market does not exist beyond the domain of the evil that men (and women) do. It is vulnerable to illusion and delusion. It can be infected by greed. And it can crash, splinter, implode and bring the whole world down with it. Unfortunately, sensible solutions to addressing free-market vulnerabilities with things like regulation are seen as ham-stringing, anti-capitalist, anti-American, "liberal" or worst of all smacking of socialism (this is where you're supposed to spit - put-tooey).

If anything on god's green earth should be regulated it has to be banks, mortgage lenders and credit rating agencies. These institutions represent a sacred public trust. Gigantic loopholes and unfettered restraint should not be realized upon which greed can flourish and evil deeds thrive -- for a toxic brew of sub-prime contagion to be concocted in the labs of Main St and Wall St USA and shipped to the rest of the world like the deadliest of viruses. But this did happen, and will likely happen again for two reasons: humans have short memories... and all the Devils are still here. With nary a slap on the wrist and HUNDREDS OF MILLIONS of untaxed dollars lining their pockets. I could vomit.

If you really want to get to the heart of the 2008 financial crisis in America you could do a lot worse than this book. It is a very frank, well-researched assessment filled with cogent arguments and incisive observations -- and all things considered, a rather sane, sensible look at the "how". Rome wasn't built in a day, and neither were the seeds of the financial crisis sewn in a week. It took about a decade, not all that long all things considering. There were those who saw the writing on the wall and did nothing. There were those that tried, and failed.

But far outnumbering the naysayers, was a group made up of fervent capitalist ideologues, free-market believers, and most of all Devils with power driven by their unquenchable thirst for cash. It was this group -- spread out across all sorts of institutions -- banks, CRAs, mortgage brokers, insurance companies, Wall Street traders and into the highest reaches of government -- who paved the way for deregulation of banks and for the rise of derivatives, CDOs, and credit default swaps at the heart of which was the immoral practice of extortionist predatory lending and sub-prime mortgages.

What you had in fact were sociopaths motivated by greed who with the help of deregulation became medieval alchemists transforming lead into gold. Game players took Product A -- not worth anything -- and turned it into Product B -- now worth everything (and credit agencies were right there, with their hand out, willing and able to give these new products a Triple A score). This was a crucial step to the alchemical process -- Wall Street could securitize but it was the CRAs who legitimized these products with their ratings which made the questionable products safe and secure (and which meant pension plans could now legally buy them).

I think the better informed we all are on this subject, the better off we'll be in the long run. We have to start demanding better protection from such dubiously legal economic practices. We have to start demanding transparency and accountability, and more than anything else, we have to start demanding more regulation. Even after the worst has happened (not the least of which was the grotesque yet necessary bailouts), regulation has been slow to come. It's being fought against in a ferocious battle by the same people who fucked us all (pardon my French) the first time and if things don't change will likely fuck us all again.

This isn't just an American story about the sins of Wall Street and the complete and utter lack of integrity represented by a Lehman Brothers before its fall -- what happens in America doesn't just stay in America (not anymore). Their economy is its largest export and we are all at the table gobbling it up. If the food is laced with arsenic or Ebola, I for one want to know. Better yet, how about strictly regulating the "food" so that the worst blemish it's going to have is a bit of mold on the edges of the bread. That I can pick off myself and it's not going to kill me.

Guess what? Regulation is not going to kill you either. It won't equal death to capitalism or the "free" market. It's simply adding responsible checks and balances into a system that's gotten far too big and complicated for its own good where the lunatics are running the asylum -- dressed in Armani suits and spouting economical equations that us "little people" just can't possibly understand. Fuck you.

The last thing I've learned: Nothing is too big to fail so you better have a Plan B.


Inside Job (2010)

Meltdown: The Secret History of the Global Financial Collapse. All four parts available on YouTube: Part I Part II Part III Part IV