Another ringing endorsement for Gretchen Morgenson and Joshua Rosner’s Reckless Endangerment, this time from David Brooks:
For that reason, the Fannie Mae scandal is the most important political scandal since Watergate. It helped sink the American economy. It has cost taxpayers about $153 billion, so far. It indicts patterns of behavior that are considered normal and respectable in Washington.
Most of the people were simply doing what reputable figures do in service to a supposedly good cause. Johnson roped in some of the most respected establishment names: Bill Daley, Tom Donilan, Joseph Stiglitz, Dianne Feinstein, Kit Bond, Franklin Raines, Larry Summers, Robert Zoellick, Ken Starr and so on.
Of course, it all came undone. Underneath, Fannie was a cancer that helped spread risky behavior and low standards across the housing industry. We all know what happened next.
The scandal has sent the message that the leadership class is fundamentally self-dealing. Leaders on the center-right and center-left are always trying to create public-private partnerships to spark socially productive activity. But the biggest public-private partnership to date led to shameless self-enrichment and disastrous results.
Brooks reads Reckless Endangerment as an indictment of the establishment (and especially of former Fannie CEO and Democratic Party insider James Johnson and Rep. Barney Frank, who are the only two people who Brooks writes are depicted as “egregiously immoral” in the book). Brooks is not usually one for stinging criticisms of D.C. insiders.
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