Home » Chief Humor » Fall Guys

Fall Guys

Everyone loves to write about disasters—too bad so few are good at it.

Great disasters deserve great books, but we don’t seem to be getting as many of them as we should. Especially considering how many disasters there have been in recent times. Sure, the postmortem racket is flourishing in the wake of the epic financial collapse of 2007-2008, but the books dissecting these collapses generally lack the epic stature of the events. Just as Samuel Johnson deserves his Boswell, and Lyndon Baines Johnson deserves his Caro, and the Roman Empire deserves its Gibbon, the Bernie Ebbers and Bernie Madoffs of the world deserve to be immortalized by writers with genuine insight and talent.

But for the most part the worldclass slimeballs of the past decade are being eulogized by lightweights. Andrew Sorkin’s Too Big to Fail was a good read, and William D. Cohan’s House of Cards: A Tale of Hubris and Wretched Excess on Wall Street had a nice you-are-there quality to it, but to date we have not had a first-class autopsy like The Predators’ Ball or Barbarians at the Gates or a beautifully written book like Liar’s Poker. Instead we are getting a steady stream of ghosted, generic items like Ace Greenberg’s The Rise and Fall of Bear Stearns, or populist screeds like Paul Christopherson’s Pants on Fire, or one-size-fits-all exegeses like Greg Farrell’s Crash of the Titans: Greed, Hubris, The Fall of Merrill Lynch, and the Near-Collapse of Bank of America or standard cut-and-paste jobs like Jamie Oliver and Tony Goodwin’s How They Blew It: The CEOs and Entrepreneurs Behind Some of the World’s Most Catastrophic Business Failures. Hey! Whatever happened to catchy titles like Crime and Punishment and The Bible? And could authors please stop using the word “hubris?” to describe every damned thing that goes wrong in this society? I studied Greek in college and I still have no idea what the word means.

Neither does anybody else.

How They Blew It
By Jamie Oliver and Tony Goodwin
Kogan Page, $19.95

Of the books to be treated here, How They Blew It is by far the least interesting and the least original. Journalist Oliver and entrepreneur Goodwin propose to examine the careers of 16 famous self-made men, ranging from Bernie Ebbers to Mikhail Khodorovsky to Dick Fuld, and show how their Croesian empires fell apart. This they do, but only by repackaging material gleaned from The New York Times, The Wall Street Journal, Forbes, Business Week, the BBC, etc. They draw no fascinating connections between those inhabiting this rogue’s gallery of scoundrels, con-artists and screw-ups; after reading the book the reader is no closer to understanding what makes them tick than he was at the beginning. The authors’ conclusions about how these men built their fortunes and then lost them range from the pedestrian—”It is a fine line between bluff and deceit”—to the idiotic—”It is a fine line between bluff and deceit.” At the end of the book, in the section called “Lessons in Entrepreneurship,” they suggest that up-and-comers can avoid ending up dead, incarcerated, or trapped in a Siberian prison by following these simple rules:

  1. Take your own advice, but do not believe your own hype.
  2. Enjoy your success!
  3. Believe in the miracle of the mundane.

The authors, who seem determined to prove that any old doofus with enough chutzpah could have built MCI or the largest conglomerate in Russia, declare: “The people in the book are not, in themselves, especially remarkable people.” I disagree. Bernie Madoff may be a worthless human being, but that was one highclass Ponzi operation he was running. Writing a book about some of the most colossal financial collapses in history and then acting as if the perpetrators were merely in the right place at the right time is like saying that Waterloo disqualifies Napoleon as a military genius. I mean, up until he invaded Russia, the Little Corsican seemed to be having a pretty good run of it. Speaking of Russia, Vladimir Putin should release his implacable rival Khodorovsky and ship Oliver and Goodwin to Siberia in his place. He should tell them they will not get released until they commit one thought to paper that is not obvious,addled, or lifted from somebody else.

This might take a while.

The Rise and Fall of Bear Sterns
By Alan C. Greenberg and Mark Singer
Simon & Schuster, $26.00

The Rise and Fall of Bear Stearnsis inherently more compelling than How They Blew It, because it is the work of the man who created Bear Stearns as we once knew it. That said, it is mostly a form of special pleading: “How Jim Cayne, not Yours Truly, Blew It.” Greenberg, who basically refuses to take responsibility for the implosion of the firm he chaired for many years, uses the book, assembled by Singer, a moonlighting stenographer from The New Yorker, to even the score with CEO Cayne. Or try to. Once the reader gets past the standard heartwarming material about the character-forming Okie childhood and the inevitable rise to power, The Rise and Fall of Bear Stearns is largely an attempt to correct the impression Cayne leaves of his onetime boss, one-time mentor and one-time bridge partner in William Cohan’s House of Cards. Greenberg’s pettiness is breathtaking: I never threw a “tantrum,” Jimmy resented my nickname “Ace,” Jimmy was a poor sport when he lost at bridge. Countering Cohan’s assertion that he once threw his sports coat on the floor in a fit of rage, he asserts: “Where do I begin? Throwing my jacket on the floor? As anyone who ever set foot on the Bear Stearns trading floor can tell you, I spent every single day in my shirtsleeves. I arrived in the morning, hung my jacket in a closet, put it back on for lunch, then returned it to the closet until I left at the end of the day.” So there. Thank goodness he had somebody from The New Yorker to help with this thrilling anecdote. When in doubt, call in the pros!

Greenberg, who seems oblivious to the reputation his outfit had in some quarters—a woman of my acquaintance, whose ex-husband had his life’s savings tied up in Bear Stearns, was all smiles the day the firm went under—has boxed himself into a corner: If the ruthless, reckless, back-stabbing Cayne was an accident waiting to happen for so many years, why didn’t the man who gave him his first job stab him in the back first? About the closest he can come to manning up about being asleep at the wheel during the waning days of Bear Stearns is this declaration: “If I had to do it over again, I would have inquired more pointedly whether we were short the same things we were long.” Now that’s what I call hands-on management!

Pants on Fire, an oddity that somehow or other came into my possession, is an example of what makes America great. A self-published little affair by a former Kidder Peabody analyst who is now an Episcopal priest, Christopherson’s Pants on Fire argues that the American economic system is a tissue of lies that benefits only the rich. This is not an original theory; you can read it in The Nation every week. Excoriating TARP, stock options, executive compensation, the Federal Reserve, the Bush Administration, the Obama Administration and the media, among others, Pants on Fire somehow manages to take both left-and right-wing positions on every problem confronting Americans today. I throw it in here not only because it crystallizes the free-floating, often incoherent anger many ordinary Americans feel about Wall Street but also because it is actually better written than How They Blew It or The Rise and Fall of Bearn Stearns. It might be off-base, it might be hyperbolic, it might be derivative, it might even be deluded. But it doesn’t blame our current financial crisis on anybody’s bridge etiquette.

Pants on Fire
By Paul Christopherson
iUniverse.com, $12.95

Crash of the Titans
By Greg Farrell
Crown Business, $27.00

Never put a converted rug merchant in charge of the fixed-income division is the basic message of Farrell’s Crash of the Titans: Greed, Hubris, the Fall of Merrill Lynch, and the Near-Collapse of Bank of America. Yes, it was Stan O’Neal’s disastrous 2006 decision to let Osmand Somerci run Merrill’s fixed-income that set in motion the events that would lead to the “iconic” wire house’s collapse just two years later. Not that Farrell is actually trying to vilify O’Neal; there’s no law against making a mistake, he asserts, and O’Neal had his heart in the right place: He was only trying to change Merrill’s entrenched, incestuous culture, by reaching outside the organization to hire someone with a bit more vim, a bit more pizzazz than the boys who were already on the payroll.

“What O’Neal did not realize was the danger of eviscerating one corporate culture without establishing another one in its place,” Farrell writes, with that haughty, retroactively Solomonic quality that all literary coroners exude. “Until he came to power, the financial advisory business had always been the core of Merrill Lynch. Under O’Neal, the emphasis shifted to more profitable activities in the capital markets.” Ultimately, Farrell charges, it was the board of directors who let things get completely out of hand, the board of directors who somewhere along the line should have called for an independent investigation into what was going on under O’Neal’s watch. And what was going on was this: They’d turned over the fixed-income operation, lock, stock and barrel, to a hard-charging former rug salesman. Everyone knows where that kind of hiring policy leads.

The only book of recent vintage in this genre that really stands out in any way is Peter Chapman’s The Last of the Imperious Rich: Lehman Brothers, 1844-2008. That’s partly because Chapman is a more serious, talented writer than the others, not given to the generic hyperbole and snarkiness that is the contemporary journalist’s stock-in-trade. But it’s also because the rise and fall of Lehman Brothers is a more important story than the rise and fall of Bear Stearns or Merrill Lynch or Bank of America, or any of them. To the extent that any corporation’s collapse can be called a tragedy, what happened to this venerable institution is tragic, in that it was such a vital part of American life for so many years. Founded in Alabama, of all places, by a family of German Jews fleeing ethnic, economic and religious oppression in Central Europe, Lehman Brothers was far more than your standard Wall Street wire house. It raised money for manufacturers. It raised money for entrepreneurs. It raised money for politicians. It even raised money for the Old Confederacy. It was part of the warp and woof of American life for 164 years. So when it finally went under, its passing was a bit more tragic than the demise of WorldCom or MCI or Pets.com or, for that matter, Bear Stearns. It was an event that symbolized how far Wall Street itself had strayed from its mission as a provider of seed capital to corporations, as an engine of economic growth.

The Last of the Imperious RichBy Peter Chapman
Portfolio Hardcover, $27.95

What distinguishes Chapman’s fine, if clumsily titled, book is his sober approach to the material. Chapman understands that he is dealing with a serious, important topic, so he lets the story tell itself. The wisecrack, the bromide, the clever aperçu are not his interest; he simply tells the sad story of the rise and fall of a truly great American company in straightforward prose. Yet, there is an elegiac quality to the narrative, particularly as he nears the end, when he makes clear that by the time Lehman Brothers went under, it had no further reason to exist.

“From around one of the high points of American history—the moon landing of 1969—Lehman Brothers entered its second phase, and one of decline. Short-term thinkers seized control. It moved away from productive enterprises and businesses of substance and did not much care who it exploited as it developed a talent for fast talk and deceit. Lehman Brothers took excessive risks and betrayed all principles of good sense. Fatefully, it moved into bogus products like toxic mortgage bonds.”

He concludes: “This was all far away from how it started. Henry Lehman came on a boat from Europe with his experience of the world and to help build America. He dealt and peddled on the byways of the South with honesty and the things that people wanted. Much later, the business he founded strayed from these first principles. Lehman Brothers died when over 150 years later, a once-proud institution was caught peddling junk to the world.”

Ace Greenberg should try reading this book. He might learn something.

About Joe Queenan

Joe Queenan is a regular contributor on business issues, corporate culture, and financial follies to Barron's and The Wall Street Journal.