Big Money Crime: Fraud and Politics in the Savings and Loan Crisis

This account of the S&L crisis by three academic authors (two social ecologists and a sociologist, respectively) claims that the fiasco cost American taxpayers $500 billion, counting the industry bailout. Although this doesn't come close to the $1 trillion Kathleen Day estimated in her S&L Hell, it's still enough for the authors to call this the worst economic calamity of the 20th century--even without the breadlines. The authors portray a cast of ""Gucci-clad"" white-collar scam artists who took advantage of a burgeoning ""casino"" economy to bilk thrift institutions for personal gain. But the scale and complexity of the scams and insider dealing meant that the S&L crisis didn't get the attention it deserved partly because neither the federal government nor the states had the resources to fully prosecute, and because regular people felt bored and confused by the issue, ""as if they've fallen behind in their high school algebra class,"" say the writers, quoting P. J. O'Rourke. Nonetheless, their brief, heavily researched account, supported by substantial funding from a wing of the U.S. Department of Justice, is an engrossing cautionary tale and detailed narrative of institutional fraud that the authors continually liken to organized crime. Disputing the theories of some economists that the S&L debacle was more the result of excessive risk-taking and abstract economic forces than ""greedy wrongdoing,"" these three lay the blame on ""bad men and women [who] took advantage of bad policies."" They clearly attribute such frauds to deregulation, an ideological tenet of the Reagan-Bush era. (Nov.)