A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers by Lawrence G. McDonald with Patrick Robinson (Crown Business Reprint Edition; $16.00; 368 pages)
“A Colossal Failure of Common Sense describes a CEO acting as if his firm was too big to fail… One might be tempted to think that Lehman’s bankruptcy was too mild a punishment for the firm’s management.” James Freeman, The Wall Street Journal
The bankruptcy of Lehman Brothers is now 2 years behind us. It was the largest bankruptcy in history and the first in a series of banking and financial institutional failures linked to the housing bust. It marked a low point in the chronology of Wall Street. Former Lehman vice president of trading, Lawrence McDonald, and a veteran professional writer, Patrick Robinson, have painstakingly detailed the intellect, honesty and caring at the heart of the Lehman trading groups that tried valiantly to warn upper management of the impending doom.
This one hundred and fifty-eight-year-old institution was leveled by a small clique of men at its very top who lacked the restraint and manners that were the key to traditional corporate culture at Lehman. The arrogance, greed, weak egos and excesses (think of TV’s Dynasty) are similar to the unfortunate behaviors exhibited by members of any and all cliques.
We view the action from McDonald’s perspective starting with his early yearning to work at a major player on the Street. If you think every aspect of the real estate bubble and bust has been examined and reported on, think again. This hefty book is written from an insider’s perspective. Credit is given to whomever it is due at both ends of the spectrum of good and evil.
The reader can feel the suspense building as the story continues to develop. This book became a true page-turner prior to its end, even though its conclusion had already been written. Recommended.
This review was written by Joseph Arellano. Reprinted courtesy of Sacramento Book Review.
Texas Tough by Robert Perkinson (Henry Holt and Company)
It’s doubtful that anyone would wish to take the position that modern American prisons serve as the perfect example of rehabilitative environments. Yet Professor Robert Perkinson takes approximately 500 pages to argue the case that they are not the best representation of a “forgiving society.” That’s fine but this reviewer wishes that at least half of this large tome had dealt with solutions rather than simple issue spotting. Finding problems is the easy part, finding solutions – applying innovative social engineering – is the tough part and is missing from this quasi-legal brief.
Texas Tough is highly documented with source materials and yet academic knowledge is not the same as practical experience. At one point in his Conclusion, for example, Perkinson disparages “high-tech uberprisons like Pelican Bay in California,” as not being socially friendly (prisons like this are “regimented lockups” in his view). I saw no indication in the Notes that Mr. Perkinson has visited Pelican Bay; this is an end-of-the-line facility for the most violent of hard-core repeat offenders. It is not meant to serve as either a Club Fed or a cozy community college.
What would Mr. Perkinson do as the administrator of such a facility?
One of the most interesting aspects of this book (and the first half is much harder reading than the second half due to some obtuse language) is the application of The Law of Unintended Consequences, popularized by the sociologist Robert K. Merton. This principle is often referenced in law schools as litigation and legislation-based reforms may produce results that surprise their sponsors. Due to court-ordered reforms in the state of Texas, for example, the author notes that inmates are now “as plagued by tedium as toil.” Their death rates are also much lower. These two points don’t seem to support his case very well.
The professor also spends a great portion of this work arguing that northern prisons have become more punitive (and “southern”), while southern prisons have become more “northern” and less harsh. Perkinson ties this to race but it seems a bit tenuous. Let’s just say that it may remain as an interesting issue for further research for sociologists.
If one has never read a book about the U.S. correctional system, then this might make for an interesting, if sometimes overdone, introduction to the subject. It is hardly light reading. In fact, it is sometimes a slog through a muddy field.
This reviewer is hopeful that someone follows up this survey work with a constructive and solution-based approach to what Professor Perkinson somewhat dramatically labels as “America’s Prison Empire.”
A pre-release review copy was received from the publisher.