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BOOK REVIEW: ‘Bull by the Horns’

BULL BY THE HORNS: FIGHTING TO SAVE MAIN STREET FROM WALL STREET AND WALL STREET FROM ITSELF
By Sheila Bair
Free Press, $26.99, 432 pages

How much drama can take place in boardrooms and on intra-agency phone conferences? Sheila Bair aims to find out in her financial-crisis memoir, "Bull by the Horns: Fighting to Save Main Street From Wall Street and Wall Street From Itself."

The answer, it turns out, is "not very much," even though as chairman of the Federal Deposit Insurance Corp. (FDIC) from 2006 to 2011, Ms. Bair was in charge of bailing out banks and shaping financial regulations during the greatest financial meltdown since the Great Depression. Nevertheless, Ms. Bair's book explains a lot about the way government works.

Ms. Bair, of course, is the heroine of this autobiography, along with a few other straight-shooting regulators. They are outnumbered by the bad guys, who include other government officials as well as "boneheads" in the private sector whom Ms. Bair doesn't shy away from bashing. (She treats Vikram Pandit, head of Citigroup until a few weeks ago, especially harshly.) The archvillain, though, unquestionably is President Obama's Treasury secretary, Timothy F. Geithner.

Ms. Bair's unstinting criticism of Mr. Geithner is a theme "Bull by the Horns" shares with former Troubled Asset Relief Program Inspector General Neil Barofsky's "Bailout." Ms. Bair goes further, though. Where Mr. Barofsky's Mr. Geithner is simply compromised, Ms. Bair portrays Mr. Geithner as monomaniacally committed to Wall Street. He's always operating behind the scenes to undermine Ms. Bair and ensure that the big banks get the best of every bailout and new rule. Ms. Bair recounts a number of instances in which Mr. Geithner goes so far as to collude with other regulators against Ms. Bair's efforts to protect taxpayers and promote smart regulations.

Mr. Geithner is by far the biggest malefactor in Ms. Bair's story but by no means the only one among the Obama team. Comptroller of the Currency John C. Dugan, economic adviser Lawrence H. Summers, Assistant Treasury Secretary Lee Sachs and others all receive low marks from Ms. Bair. Along with Federal Reserve Chairman Ben S. Bernanke (originally, like Ms. Bair, a George W. Bush appointee) they are all portrayed as only secondarily interested in promoting a healthy financial system and addressing the problem of too-big-to-fail banks.

Mr. Obama himself comes off looking pretty good. Ms. Bair depicts him as thoughtful, concerned and well-intentioned. If Ms. Bair's illustrations of both Mr. Geithner and Mr. Obama are accurate, there is a mystery surrounding Mr. Obama's choice of Mr. Geithner as Treasury secretary. It's clear, to Ms. Bair at least, that Mr. Geithner had only the interests of Wall Street in mind even before he took up the reins at Treasury. Ms. Bair writes that Mr. Geithner's appointment as Treasury secretary was a "punch in the gut" because she mistrusted Mr. Geithner's actions in his previous job as head of the Federal Reserve Bank of New York and viewed his failure to pay payroll taxes while at the International Monetary Fund as disqualifying.

Mr. Obama appointed all of Ms. Bair's fellow regulators, all of whom she finds more or less captured by the financial industry. Either the president's intentions really were noble, as Ms. Bair intimates, and he was too naive to find lieutenants who would follow his orders, or he wasn't as high-minded as he led Ms. Bair to think. The reader is left to speculate which might be the case. The amount of internecine squabbles and general lack of teamwork Ms. Bair encounters in her time at the FDIC, however, suggest an institutional mess that Mr. Obama wasn't able to control.

In fact, Ms. Bair's book (especially when considered alongside Mr. Barofsky's memoir) unintentionally reveals the tendency of bureaucrats to succumb to viewpoints bound up in their institutions. Ms. Bair criticizes other heads of agencies for sacrificing the public interest to protect their own turf, but reading between the lines, it seems she was motivated by similar impulses.

It's not a coincidence that what little drama or color there is in Ms. Bair's book relates to her personal career and that the hugely important matters of the financial crisis are sterilized into monotony. The average reader probably will find "Bull by the Horns" boring. Unless you already were invested in details of the Citi bailout or the outcome of the Collins Amendment to the Dodd-Frank Act, you won't find Ms. Bair's first-person account particularly gripping.

Ms. Bair's personal struggles are much more compellingly depicted: leaving her happy life in Massachusetts for Washington, D.C., working as a woman in a male-dominated environment and pursuing individual success. By far, the most human passage in the book is when Ms. Bair recounts having a Vogue profile spiked because the editors didn't think she was attractive enough.

There's no doubt that a public figure of Ms. Bair's stature has worthwhile thoughts on many weighty subjects. It says a lot about the incentives facing any one regulator that she centers her story around her own relatively trivial circumstances and her stewardship of the FDIC and relegates the large issue of the financial crisis to the background.

All of Ms. Bair's peers brought their own hopes, goals and insecurities to their jobs, just as she did. Should it surprise us when they lose sight of the bigger picture and focus on their own interests?

Joseph Lawler is the editor of RealClearPolicy.

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