by Charles Gasparino, 2009, Harper Business, New York
This book (lent to me by one of our friends in Florida) portrays the steps that led to the financial meltdown in the fall of 2008. The tale is pretty fascinating as it traces the development of the original mortgage-backed securities back in the 1980′s to the crisis in the financial system they eventually caused. The causes of the crisis, however, are complex and there is plenty of individuals who must share the blame. What started out as a valid strategy using perfectly sound investment instruments eventually became what is now known as “toxic assets”. How did this all happen?
Gasparino traces the greed and poor decisions of Wall Street executives, compounded by a well-meaning, but misplaced government policy (home ownership for everybody as a way to climb the economic ladder), that led to the meltdown. What was surprising to me is that the big meltdown was preceded by many similar, but smaller meltdowns that seemed to occur with the Wall Street firms every few years. As Gasparino cited the many instances of over leverage and poor decisions over the decades, the line from the song, “Where Have All the Flowers Gone?”, kept coming to mind: “When will they ever learn?”
In October of 2008 we were in Europe on a Danube River cruise. I recall watching the TV at night as the meltdown went global. This book, along with those memories, continue to remind me just how bad the situation was and how close we came to going into a deep depression, the likes of which we had never experienced. I often wonder how there can be so many vocal critics of the “TARP” program, the bailouts, and the subsequent stimulus program. There can be no question that some of these steps managed to avert a total meltdown.
I took over two months to read this book and it was tough read for me, not because of the actual writing, but, I think, due to the subject material. It was just hard to read so much bad information and about such stupidity that led us into this situation. If I had one criticism of the book, I would say that it was somewhat repetitive. I felt as if I had already read some of the information several times before I finished the book. Nevertheless, I would recommend this book to anyone who has an interest as to what caused the collapse of our financial systems.
The following is a letter to the editor that I submitted to the Naples Daily News on Sunday, January 25.
I read with interest Sunday’s Guest Commentary, “Building economy that won’t rely on population growth”, by Tammie Nemecek. While I applaud the efforts of the Economic Development Council and the 37 community groups and organizations, I wonder if enough attention is being given to the medical industry in our county. As I perused the list of Project Innovation endorsers provided in the commentary, I was struck by the fact that our local hospitals and other medical providers were not listed.
I am concerned that we may be attempting to create some new industries from scratch in Collier County that already exist in many other communities throughout the United States and the world such as computer software, communications, etc., while there exists a real need for top-notch medical services and technology in our area. We are blessed with a large population of retirees who live here either year-round or part of the year, but the medical infrastructure to support those individuals seems only to exist elsewhere. I have one friend who recently had a brain implant to help control his Parkinson’s disease, performed at the Mayo Clinic in Jacksonville. I have another friend who had a heart valve replacement, performed at the Cleveland Clinic in Cleveland. One of our major hospitals in Naples offers only a limited cardiac care program and is not licensed to perform open-heart surgery. This facility also out-sources some of its routine laboratory work to facilities in other parts of the state rather than doing all of it locally. It is indicative of our failure to aggressively support the establishment of a world-class facility that the Cleveland Clinic threw in the towel and pulled out of our area a couple of years ago. The current migration of family practitioners in Collier County to “concierge” service also reflects our inability to attract and retain primary care physicians and further limits access to exceptional health care for many individuals.
I grew up in small town in Minnesota that was 40 miles from Rochester, Minnesota, home to the Mayo Clinic. We often referred to that clinic as “the mecca”, as it attracted patients from all over the world. By contrast, I have heard the joke as to where to go around here to get the best medical care. Answer: Southwest Regional Airport.
We are blessed with possibly the best climate in which to undergo medical treatment and subsequent rehabilitation. We also have potentially the optimum clientele who are in need of such services. Rather than attempt to compete in some of the industries where world-wide competition already exists and where Collier County may not bring any new natural resources to the table, I believe we should be looking to put our best foot forward in this vital sector where we can truly leverage our local strengths and needs.
By Thomas L. Friedman, 2005
Most of this book is an overview of the technological advances of the past few years which have allowed the world to collaborate on various types of work projects leading to a new globalization of trade.
As I was reading the book, I was already familiar with many of the tools that he described, but he filled in a lot of the blanks and provided some interesting history as to how these things evolved and gave some insight regarding the individuals who were responsible for their invention. On the other hand, I thought that the author was overselling the benefits of the new technology in that he made it appear as if they were going to lead us all to some kind of utopian global trade situation. I kept asking myself, if this is so, why is the world in such a mess?
Friedman redeemed himself in the last part of the book, however, when he outlined the reasons why a good part of the world, primarily the Islamic world, is not buying into the new globalization. He correctly describes the sources of the cultural divide and is much less optimistic about whether it can ever be overcome. Because of this more realistic and sobering view, I have much more respect for his overall assessment.