Senseless Panic: How Washington Failed America - Softcover

Isaac, William M.

Softcover

ISBN 10: 1118431987 ISBN 13: 9781118431986

Publisher: Wiley, 2012

Synopsis

The truth about the 2008 economic crisis from a Washington insider

The 1980s opened with the prime interest rate at an astonishing 21.5 percent, leading to a severe recession with unemployment reaching nearly 11 percent. Depression-like conditions befell the country, the entire thrift industry was badly insolvent and the major money center banks were loaded with third world debt. Some 3,000 bank and thrifts failed, including nine of Texas’ ten largest, and Continental Illinois, which, at the time, was the seventh largest bank in the nation. These severe conditions were not only handled without creating a panic, the economy actually embarked on the longest peacetime expansion in history.

In Senseless Panic: How Washington Failed America, William M. Isaac, Chairman of the Federal Deposit Insurance Corporation (FDIC) during the banking and S&L crises of the 1980s, details what was different about 2008’s meltdown that allowed the failure of a comparative handful of institutions to nearly shut down the world’s financial system. The book also tells the rousing story of Isaac’s time at the FDIC.

• Details the mistakes that led to the panic of 2008 and 2009
• An updated paperback revision of the bestselling book on the 2008 economic crisis, including a fascinating new Epilogue
• Demystifies the conditions America faced in 2008
• Provides a road map for avoiding similar shutdowns and panics in the future
• Includes a foreword by Federal Reserve Chairman Paul Volcker

Senseless Panic is a provocative, quick-paced, and thoughtful analysis of what went wrong with the nation's banking system, a blunt indictment of United States policy, and a road map for making sure it doesn’t happen again.

About this title

Review:

Product Description
The 1980s opened with the prime interest rate at an astonishing 21.5 percent, leading to a severe recession with unemployment reaching nearly 11 percent. Depression-like conditions befell the agricultural sector, a bubble burst in the energy sector, a rolling real estate recession swept the country, the entire thrift industry was badly insolvent and the major money center banks were loaded with third world debt. Some 3,000 bank and thrifts failed, including nine of Texas’ 10 largest, and Continental Illinois, which, at the time, was the 7 thlargest bank in the nation. These severe conditions were not only handled without creating a panic, the economy actually embarked on the longest peacetime expansion in history.

In Senseless Panic: How Washington Failed America, William M. Isaac, Chairman of the Federal Deposit Insurance Corporation (FDIC) during the banking and S&L crises of the 1980s, details what was different about 2008’s meltdown that allowed the failure of a comparative handful of institutions to nearly shut down the world’s financial system. The book also tells the rousing story of Isaac’s time at the FDIC. With accessible and engaging prose, Isaac:

• Details the mistakes that led to the panic of 2008 and 2009
• Demystifies the conditions America faced in 2008, and
• Provides a roadmap for avoiding similar shutdowns and panics in the future

Senseless Panicis a provocative, quick-paced, and thoughtful analysis of what went wrong with the nation's banking system and a blunt indictment of United States policy.

Amazon Exclusive: Review fom Professor Cornelius Hurley

Before “too big to fail” became part of our lexicon, there was Bill Isaac, Chairman of the FDIC in the 1980s. Drawing on his experience from that era leading the banking system out of a potential catastrophe, Isaac in his new book, Senseless Panic has provided us with a must-read analysis for anyone looking to understand the 2008 economic crisis. Senseless Panic offers both fresh insight and devastating analysis, showing how a pattern of governmental inaction and regulatory failures played leading roles in the meltdown. During the critical days in September 2008, when Congress was debating the original bailout package, Isaac was called on by a bipartisan group of legislators to educate Congress on the failings of the Government’s plan. He played a crucial role in defeating the initial proposal in the House. Though it eventually passed, Isaac presents a clear-eyed critique of TARP as an unnecessary and waste of taxpayer money.

Isaac first gives readers a succinct and straightforward look at how in the 1980s the FDIC and Paul Volker’s Fed managed to stave off a brewing bank panic with unpopular but necessary steps. He provides a roadmap on how later the lack of political will, agency turf wars and boneheaded policy responses to the bank and S&L crises of the 1980s led to the current debacle. Isaac explains how banking regulators need to have the courage to promote unpopular countercyclical strategies to protect the financial markets. Isaac shows how the regulators botched the job, calling out a bipartisan collection of economic and political leaders including treasury secretaries, the SEC and FASB for their failed policies and poor reaction to the crisis of 2008.

Senseless Panic is an important book, one that should be on the reading list of anyone interested in America’s economic well-being. Isaac shows how the failure to understand and appreciate the banking crises of the 1980s turned the inevitable economic downturn in 2008 into an economic force of destruction. For the next generation of economic policymakers looking to head off an economic tsunami, Senseless Panic is the place to start.

Professor Cornelius Hurley
Executive Director, Morin Center for Banking & Financial Law
Boston University
Former Assistant General Counsel, Federal Reserve Board

From the Back Cover:

Praise for Senseless Panic

"Washington had better read this book. Bill Isaac is absolutely on target in his acute analysis of what he rightly calls the 'Senseless Panic of 2008.' He was at the center in preventing what could have been an even worse banking debacle back in the 1980s—but it didn't happen, thanks to his level-headed leadership. If Washington politicians ignore Isaac's insights, we will pay a fearful price."
—Steve Forbes, Chief Executive Officer, Forbes, Inc.

"Bill Isaac has dedicated his life to the public policy arena. He thinks straight, and he talks straight. Washington must read Senseless Panic to learn the lessons of the past and set the course for the future."
—Lawrence Kudlow, host of CNBC's The Kudlow Report

"Bill Isaac throws down the gauntlet to Bush, Paulson, Obama, and Geithner. Their fixes and bailouts, he argues persuasively, were wrongheaded and very expensive. Learn from past crises and prevent the next collapse, says this experienced and outspoken former bank regulator. Let the real debate within the establishment begin."
—Ralph Nader, lawyer, author, and political activist

"I would respectfully urge President Obama: Read this book. Emulate success. Spend time debriefing this real-world financial expert. What other effective bank regulator, besides Paul Volcker and Bill Isaac, do you know who fixed our broken financial system for two presidents—Carter and Reagan? Nothing speaks louder than success."
—Rep. Marcy Kaptur (D-OH)

"If our national leaders had listened to Bill Isaac over the past two decades, particularly when the crisis hit in 2008, we would have avoided the enormously costly financial meltdown. This book is must reading for students of financial history."
—Dr. Arthur Laffer, Chairman, Laffer Associates

"In the 2008 debate over TARP, Bill Isaac came to Washington and presented over 200 members of Congress with an alternative to the government bailout. His arguments helped convince a skeptical House to stunningly reject and vote down the bailout proposal. Although the administration, leaders of both parties, and Wall Street drove a panicked stampede toward government intervention, Bill delivered a forceful case that still counters the myth that Washington had only one viable option to address the financial crisis. Bill's book is must reading for all who care about financial and economic reform."
—Rep. Darrell Issa (R-CA)

About this edition

• Publisher: Wiley
• Publication date: 2012
• ISBN 10: 1118431987
• ISBN 13: 9781118431986
• Binding: Paperback
• Edition number: 1
• Number of pages: 240