White Collar Criminals and the Financial Meltdown
November 1, 2012
Think Bernie Madoff was an outlier? To gauge by some of the contributors to this volume, the whole speculative economy is a vast Ponzi scheme. Indeed, notes David Shapiro, a legal/financial investigator, there are some fine distinctions between "hedge and private equity funds and Ponzi schemes," the former being "pools of investment capital that are largely unregulated by federal, state, and local authorities," which is just the way the wizards of Wall Street like it. By contrast, of course, other investment instruments such as mutual funds are intricately regulated, such that financial hanky-panky seldom occurs there, at least not by comparison. Shapiro wonders why it is that a financial crisis is required to ferret out the bad guys, observing, "The nature of today's unregulated or lightly regulated market often makes the distinction between outright fraud and high-risk vehicles hard to discern." In such a climate, an operator like Madoff was destined for success, and that he got away with it for so long--thus the title of the book--is a matter that should provoke much discussion among regulators. Writes Jock Young, "He is the right gender to be sure but the wrong class, ethnicity, and age; we usually spend our time looking down, not up, the social structure when analyzing criminal behavior." "They"--the layers of malfeasants that include "Wall Street, Washington, and Main Street"--got away with it for so long, in other words, because people were looking the wrong way, hoping, in the case of Main Street, to get a little of the proceeds themselves, and no one should have been surprised when the whole thing came tumbling down. The lessons to be learned are many, but, the editors conclude, the regulatory mechanisms meant to preclude future meltdowns, such as the Dodd-Frank Act, are now under assault. Stay tuned.
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October 1, 2012
Not only a compendium of economic analyses of the recent financial crisis, this book, edited by Will (sociology, John Jay Coll., CUNY), Stephen Handelman (director, Ctr. of Media, Crime, and Justice, John Jay Coll.; coauthor, Biohazard: The Chilling True Story of the Largest Covert Biological Weapons Program in the World--Told from Inside by the Man Who Ran It), and David C. Brotherton (sociology, John Jay Coll.; coauthor, Banished to the Homeland: Dominican Deportees and Their Stories of Exile), is also an expose of unprosecuted white-collar crimes. Few connected with Wall Street have suffered repercussions for their misdeeds. The book concludes that "there is no single answer to the question: How did they get away with it?" Unfortunately, most of the contributors do not feel the 2011 Dodd-Frank Act will prevent another, similar crisis, though other economics writers such as Michael Mandelbaum and Robert Schiller urge better oversight urge better oversight, transparency, and regulation. VERDICT A good complement to Thomas Friedman and Michael Mandelbaum's That Used To Be Us or Robert Shiller's Finance and the Good Society, this book is a valuable resource for details about the financial crisis.--Joanne Conrad, Geneseo, NY
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