Sheila Bair’s new book

I put this one in the jaw hits floor category, and for more than one reason.  (Sheila ran the FDIC during the financial crisis and her book is titled Bull by the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself).

The book is remarkably full of information and substantive narrative.  Few books pack in so much and I mean this in a very positive way.  I learned something on virtually every page, even after having read many of the other crisis books.

Yet her running claim that she had a plan to end the bailouts, or abolish “Too Big To Fail” is absurd.  (Though most of these people do.)  She should be presenting only the more modest argument that it would have been better to distribute more losses on creditors, which indeed she did advocate.  Her narrative overreaches by a long mile.

Second, to a remarkable degree, she sees everyone else in the process as filled with fault and herself as never at fault.  She has zero qualms about ceaselessly flinging mud out the rear view mirror, and does so for even the tiniest and pettiest of squabbles, including ones the readers never knew or cared about.  Geithner by the way is villain number one but no one else on the scene matches her virtue and common sense and scarcely a page flies by when we are allowed to forget this.

She is beloved of sentences such as “Maybe the boys didn’t want Sheila Bair playing in their sandbox.”  Who am I to say she is wrong?  Reading this book now I know why!

This is arguably the most _______ book I  have read, ever, and I am still looking for the right word to fill in that blank.  It is in any case stunning.

From yesterday’s media, here is Sheila celebrating the departure of Vikram Pandit from Citibank.  I do support full free speech rights, but still I feel queasy when former top-ranking government officials — who have been privy to lots of inside knowledge — speak out on such specific matters and in such a negative way on particular individuals and firms, as opposed to making broader policy recommendations.  What are now the incentives for CEOs negotiating with the FDIC or for being honest with regulators the next time around?  Former government leaders and regulators should not be settling personal scores in public to such an extent.  Do you see many other accomplished statespeople doing the same?

This tract is a performance of terror, in good and bad ways.  Few books will teach you more about the politics of bureaucracy and regulation, though not exactly as the author intends.


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