Bruce Bialosky

Determining when to analyze any historical event often rests upon subjective judgment. For example, it’s likely too early to dissect the Madoff affair because all the details have not yet to emerge. Two recent books, however, each of which examined the tumultuous events culminating in the financial crisis of 2008, have convinced me that it’s now time to seriously study this controversy.

Michelle Malkin

The books really need to be read in tandem – kind of a yin and yang. The Big Short, by famed author Michael Lewis, looks at the events from the eyes of the outsiders who questioned the establishment. Hank Paulson’s book, On the Brink, is the ultimate insider’s book as Paulson was the Treasury Secretary during this period and at the core of key financial and policy decisions. As long as you understand that Lewis has a disdain for Wall Street and Paulson’s account is less than detached, reading the two back-to-back provides a balanced perspective of what caused these events and the people involved.

First, neither book spends any time focusing on the governmental policies that led to the financial upheaval. Second, it still is difficult to come to grips with the fact that this worldwide crisis was caused by astonishingly weak practices on single-family residence loans. Whether prodded by government or not, some very sharp people on Wall Street not only participated in this charade, but encouraged it – and ultimately ended up holding large portfolios of flimsy loans. Third, we should be thankful that Hank Paulson, a Wall Street insider, was Treasury Secretary at the time because of his great knowledge of the financial companies involved and his long-time relationship with their leaders. If Paul O’Neill or John Snow, President Bush’s first two Treasury Secretaries, had still been in office, we might all be standing in soup lines today.

The striking difference between the two books concentrates on Wall Street’s leadership. Lewis’s book centers largely around two eccentric geniuses who bet against the system – Michael Burry, a hedge fund administrator with one eye and Asperger syndrome, and Steve Eisman, with FrontPoint Partners, who may be the most anti-social person in Manhattan. They both perceived correctly that many of the nation’s top investment bankers were completely unaware of the levels of risk and exposure they had assumed. Conversely, however, Paulson rarely expresses anything other than confidence and admiration for Wall Street’s top echelon.


Bruce Bialosky

Bruce Bialosky is the founder of the Republican Jewish Coalition of California and a former Presidential appointee. You can contact Bruce at bruce@bialosky.biz