It Takes a Pillage: An Epic Tale of Power, Deceit, and Untold Trillion Paperback – 23 February 2013

opens your eyes to the truth of the USA and the west in general or humanity for that matter

Pssst. C'mere. I have a deal for you. You see, I have some gambling debts and the loan sharks are starting to eye my kneecaps, so I need a bailout. Here's the deal: you give me a million bucks and I'll invest it at the craps table. If I win, I'll give you your money back (well, maybe most of it). If I lose, well, sorry about that. Maybe if you loan me another million...?What, no takers? I can't believe it. I guess I must not be as persuasive as Henry Paulson. Because that's roughly the deal he snookered every American taxpayer into. Well, if you multiply that by orders of magnitude, that is.In a dizzying account, Nomi Prins, a former Goldman Sachs and Bear Stearns insider turned investigative journalist, details the events that led to the financial crisis - which Prins dubs the "Second Great Bank Depression". She takes us inside the ins and outs of the Wall Street wheeling and dealing that created behemoth "supermarket" banks which were "too big to fail" (or, as Prins puts it, "too big to succeed"). She details the political power plays that dismantled many of the regulations which were put in place after the (first) Great Depression to protect American consumers and taxpayers and prevent the public from taking on huge risks associated with giant conglomerations of banks engaged in risky speculation propped up by government largesse (i.e., our money).I'm no financial guru, and I probably never will fully get my head around the structure of the financial world of "credit default swaps" and "asset backed securities" being "sliced up" into "tranches". Nonetheless, Prins paints enough of a picture of these bank "products" to give even a layman a sense of how risky they are.Call me old-fashioned, but am I the only one who gets a little queasy when words like "creative" and "innovative" are used in connection with banking and accounting? It's sort of like the English teacher who tries to be "creative" with spelling and grammar. Such things are supposed to be rather boring because they're fundamental.This book is rather repetitive. At one point Prins even apologizes for beating the dead horse of Glass-Steagall. However, such repetition is probably necessary because that regulation (and other similar ones which Prins covers) is probably the biggest factor leading to the Second Great Bank Depression. I couldn't begin to cover all the ins and outs, but basically Glass-Steagall was a law implemented after the Depression in the 1930s which separated commercial banks, which provide loans to consumers based on consumer deposits, from risky investment banks which exist to speculate and take risks in order to earn large rewards. The government backed consumer deposits and commercial banks to protect both consumers and the banking industry. Investment banks, on the other hand, were left free to speculate and invest, but their risks were solely on their own books, not the public dole. Other regulations prevented large banks from merging with each other and creating overly large conglomerates. That way, no one bank was "too big to fail". Bad banks could be allowed to fail without creating any overarching crises.But over the course of the last 30 or so years, and especially since the Clinton and Bush 43 eras, almost all of those regulations, especially including Glass Steagall, have been rolled back or repealed entirely and banks have gleefully merged and acquired each other with abandon. Investment banks were then free to merge with commercial banks and use their large pools of consumer dollars as collateral for risky investments which were backed up by the government through various name changes, such as becoming "bank holding companies" or other similar entities. Also, the barriers between banks and other financial-related companies such as insurance companies were dissolved. The result was an orgy of greed and speculation among Wall Street banks and financial firms which resulted in the largest ever transfer of wealth from ordinary Americans to already obscenely rich executives.Furthermore, because these banking leviathans are backed by the government, we, the American taxpayers, not the Wall Street executives, shoulder the risks of this speculative greed. As mortgage-backed securities began to fail during the early days of the foreclosure crisis, the enormous house of cards built on top of bad mortgages began to teeter, which is the real reason credit became frozen. The government, originally led by Bush 43's Treasury Secretary Henry Paulson, stepped in to bail out the banks while failing to help a single American homeowner.Prins destroys the notion that greedy homeowners were responsible for the Second Great Bank Depression, although I wish she had covered the right-wing's favorite whipping boy, the Community Reinvestment Act, in a little more depth. Even if every American homeowner defaulted on their mortgage, the government could, if it so chose, bail every one out for a small fraction of the trillions that have been poured into the bailout of the banking industry.Lenders deliberately pushed borrowers into risky mortgages knowing that there was a likely chance that the mortgage would fail. However, it didn't matter because the lenders assumed they'd always be able to re-sell the underlying home for more than the bad mortgage was worth, since it was assumed that housing prices would continue to rise. Furthermore, these bad loans were repackaged and sold as securities on various markets. And those securities were further structured and sliced and diced and re-sold. When housing prices slowed and eventually declined, the securities built on top of those "assets" fell apart and became "toxic".But you needn't fret about those poor Wall Street executives who had so much riding on those toxic assets. Using your money, the government - mainly the Federal Reserve and the Treasury Department - swooped in to save Wall Street. But, unfortunately for you, you'll probably never know how most of your money was spent because, as a public-private entity, the Federal Reserve is immune from ordinary audits, as are the banks which received our largesse. Prins and her staff, using exhaustive research, followed the money as far as they could and the numbers are staggering. But Prins admits that the numbers to present a full picture simply aren't available, so we can only imagine how much more staggering the reality is.Prins ends with heartfelt - but probably hopeless - pleas to restore the regulations implemented after the Depression: re-implement Glass-Steagall to restore the barrier between commercial and investment banks, restore the barrier between banks and other financial companies, re-implement sensible limits on how much a bank is allowed to borrow based on ratios to their deposits and other assets, impose transparency and accountability on the Federal Reserve, end the "revolving door" between Wall Street and the agencies which are supposed to regulate Wall Street. All of those are definitely worthy and much-needed steps to restore some semblance of sanity to our financial system so as not to have- and soon - a Third Great Bank Depression. However, considering that both parties basically represent corporate interests, and with the Citizens United Supreme Court decision which basically allows corporations to spend as much as they like buying elections, I don't foresee any significant changes. Until it gets bad enough that Americans get off their collective duffs and take to the streets like the Egyptians have the past two weeks, nothing is going to change.I recommend this book to every American. Even if you don't understand all the details, you'll understand enough to see that you're getting screwed, and maybe enough people will start to care enough to do something about it. Or, as Dr. Seuss put it, "Until someone like you cares a whole awful lot, nothing is going to get better. It's not."

It's depressing! A tale of woe without any resolution! Shrill and polemical! Terribly written! Unconscionably repetitive! Disgustingly predictable! No surprises whatsoever, if you've been paying any attention to the world for the last thirty years! The same story already told by Robert Scheer - The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street - and half a dozen others! The sort of book you want to hurl violently at the smug face on your TV of whichever Fox News 'ranting head' happens to be lying to you at the moment! A horrible book, I say!Wait, wait! Why five stars then???Because it's a necessary horror story. Because only the full weight of information and analysis can shake enough people by the scruffs of their necks to take effect. Because author Nomi Prins knows so much more about 'high finance' than she does about literary craft, and of course so much more about Wall Street than I, or probably you, know.This is the gospel truth about how politicians of both parties, some seduced and some merely misled, have collaborated with bankers and brokers in pillaging the national treasury and demolishing the American and global economies, at least as those economies affect the "99%" who haven't been bailed out, rather than the 1% who stood to lose some millions out of their multi-billions without the 'generous' support of taxpayers. This is the tale of the Deficit that ate Democracy. This is the gothic novel of insatiable werwolves and wer-economists, shape-changers who are CEOs one month and economic advisors to Presidents the next. But unlike Robert Scheer, Nomi Prins pays scant attention to Clinton/Bush/Obama, none of whom are 'major players' in the world of finance. Hey, why blame the Politicians, when it's really been the Capitalists -- the 'swinging door' CEO-to-Secretary of the treasury types, Rubin, Volcker, Paulson, Greenspan, Bernanke, Geithner, Summers, inter alia in interchangeable order -- who have engineered the debacle? To blame the pols is like blaming the victim! After all, who was seduced and/or raped first but our own elected Representatives and our Republic?This book was published in 2009! Presumably written before that, n'est-ce pas? One of the chapters is titled "Everybody Saw This Coming". That's perhaps an exaggeration, but indeed a lot of people saw it coming as early as the tax-reform fiascos of Ronald Reagan's terms, and a lot of people who responded to the Great Depression of the 1930s would have seen it coming if they'd lived long enough. Those survivors of the 1929 Crash and the subsequent Bank Depression responded by creating a makeshift, imperfect, but effective regulatory system, especially with the Glass-Steagall Act; it was the reckless demolition of those regulatory structures, Prins demonstrates, that made the meltdown she labels "The Second Bank Depression" inevitable. But what was behind such folly? Greed? Prins argues that greed is secondary to the egomaniacal lust for power and prestige that lurks in the black heart of every Wall Streeter. But greed will do as an "prime mover", it seems to me. Greed and dogmatism, and too early exposure to the novels of Ayn Rand.The outrage that Prins expresses is essentially the same as the less precisely documented rage of the "Occupy Wall Street" movement. The premises are so close that one might attribute the fury of the "occupiers" to having read "It Takes a Pillage", except that most of the protesters in the street have gained their insights from hard experience rather than from reading. The media pundits have concerned themselves with scorning the 'Occupiers' for lacking explicit demands, but realistically demands can only follow an explicit recognition of grievances. That's the utility of this book, even three years into the presidency of Barack Obama: to enunciate the grievances, to point the finger at the malefactors, to name names.Then, the fundamental demand isn't so difficult to state: reconstruct the regulatory mechanisms! What America needs is not "smaller" government, but rather "better" government, with higher and stouter walls of separation between Wall Street and Washington. After all, as Robert Frost said, "Good fences make good neighbors!"

Nomi Prins appears to be an activist of the Naomi Klein type but her book "It Takes a Pillage" is far more rewarding than Klein's "No Logo".Whereas Klein fashionably follows her political line (e.g. in ignoring the fact that Chinese manufacturing has lifted 400 million+ Chinese out of poverty), Prins approaches the subject of Wall Street involvement in the credit crisis in a much more open minded way. Perhaps she is rather light on what the consequences would have been of a non-bailout, or the extent to which property speculators stoked the demand for credit, but she explains very clearly the way in which middle America was robbed (indebted) by a group of Wall Street - Washington insiders.In admirably researched detail she shows how Wall Street found a way to make enormous profits in the first years of the new millennium by misusing free market liberal arguments to demolish the legal barrier separating commercial and investment banking (Glass Steagall Act 1933) and in 2004 gain SEC approval for an official increase in leverage from 12:1 to 30:1. The way was open for the placing of massive bets on an extended capital base linked to sub-prime mortgages with a new government guarantee should anything go wrong.Of course it did go wrong as sub-prime mortgages defaulted and the leverage went into reverse with the nasty twist that the repeal of Glass Steagall had produced banks that were "too big to fail" and which enjoyed newly extended guarantees.I feel that Prins (ex Goldman Sachs managing director) is one of the few people that really understand the extent of the damage. The media certainly doesn't as they continue to talk about the TARP and its possible repayment as the end of the crisis. She shows the real facts to be that the government provided $13 trillion in federal bailouts and loans of which TARP was only $700 billion (5%) with full system wide hidden losses possibly in the region of $140 trillion.The book finishes with a valuable section entitled "Some Solutions" that puts forward structural legal protections to society along the lines of a modernized Glass Steagall Act and a requirement that all debt be quantifiable and in clear view (no more off-book debt) with government guarantees only applying to normal commercial banking. If investment banks speculate then they do so without a government guarantee. As she says, "People at the top could still get rich, just not as rich - and not at the cost of ravaging the general population and generations to come."Unfortunately this is closing the stable door after the horse has bolted and the author doesn't have much to say about how middle America is going to pay off the debt so cynically handed to it by Wall Street and Washington.The next chapter of the story.

I am no defender of anyone or party here just want the truth be known....The worst of WSIB's created the Obama myth we're stuck with now...but the heart of this recession is Democrat Greed, for every Republican there are at least 50 Democrats if not more...when you read to educate yourself anyone who says otherwise is lying...those made off with hundreds of billions tax dollars were virtually all Democrats.Having been in this wide field of work for 35 years or so I had reservations about It Takes a Pilage....so much of what has been written about the Great Democrat Recession has been for deflection purposes....this book gets some of it right but misses horribly when it relies someone Elizabeth Warn a career insider liberal, who has never had a real net tax paying job whose millions were amassed off tax payers.This book takes a solid left turn after a brief intro of objectivity....It completely misses who wrote and had oversight of TARP, who and why the provisions added for what is AKA `buyoff' bonuses (Frank-Dodd), completely misses Jim Johnson leading Fannie Mae into the depths of ENRON leagues...but true to liberal mindset relentlessly attacks Paulson as if he did it all himself. There are few in the business who do not know it was Geithner that was the driving force, threatening, screaming and arm twisting gov agencies to get these `bailout bonuses' funded by the tax payer. I defend neither but it's nice to know when the right person gets hung.....Paulson isn't the right person.She gets the general outline close but misses horribly who benefited from the evil alliance between corrupt corporate leaders who were led by the more corrupt Fannie/Freddie/HUD leaders...who drove their crony allied lenders, CW, WaMu etc, into ruin...but in the end it's all good for them they made off billions combined because they knew who would end up paying. They should be in prison all of them.Not a word about the real victims...millions in the middle who lost everything.Don't waste your money.....you can get the same story from Geithner or Warn or the DNC....see the link?It's not hard to follow...just follow the money.