Busted: Life Inside the Great Mortgage Meltdown
By Edmund L. Andrews
W. W. Norton, New York: May 2009
Hardcover, 240 pages, $25.95, 240 pages
Gimme Shelter
By Mary Elizabeth Williams
Simon & Schuster, New York: March 2009
Hardcover, 336 pages, $26.00
If there is anybody who should have avoided the mortgage catastrophe, it is me. As an economics reporter for The New York Times, I have been the paper's chief eyes and ears on the Federal Reserve for the past six years. I watched Alan Greenspan and his successor, Ben S. Bernanke, at close range. I wrote several early warning stories in 2004 about the spike in go-go mortgages. Before that, I had a hand in covering the Asian financial crisis of 1997, the Russia meltdown in 1998, and the dot-com collapse in 2000. I had learned a lot about the curveballs that the economy can throw at us.
But in 2004, I joined millions of otherwise sane Americans in what we now know was a catastrophic binge on overpriced real-estate and reckless mortgages. As I write in February 2009, I am four months past due on my mortgage and bracing for foreclosure proceedings to begin.
-- Edmund L. Andrews, Busted
I'm sure it seemed like a good idea at the time: Write a book with the premise, "Unbelievable! This mortgage con game is so fucked up, it even took Me in! Me! A professional business/finance journalist for the New York Fucking Times!" Alternate instructive, objective, explanatory chapters about the finance crisis in general with "up close and personal" chapters detailing his own individual descent into near-foreclosure hell, and Edmund Andrews would have a blockbuster!
On paper, in outline form, a dream of a book for some enterprising publisher. In practice ... not so much. And that's before we even address the ethics problems that cropped up after publication (more on that shortly).
The problem is not with Andrews' reportorial sections. These are, for the most part, strong, straightforward and concise, helpful in understanding the complicated market mechanisms and shady investment instruments that were (barely) underpinning the market before the meltdown. True, there were slight foreshadowings here and there of where he would go wrong in the autobiographical sections--a certain squishiness of character gushed through from time to time that was offputting, captured in the opening passage, for example, where he confesses to a certain fed head:
Alan Greenspan blanched. First he looked appalled. Then he looked perplexed. And for the first time that I could remember, his patient and gravelly voice turned curt and commanding. "Why did you do it?" he asked, interrupting me in midsentence. I felt like a teenager who had just told his father he had crashed the family car.
In many ways, this lead captures all of the problem: a very self-conscious reaching for a writerly style, coupled with an insistence on inserting familiarity with the rich and famous for obvious self-aggrandizement (and ultimately unnecessary to either the objective or subjective aspects of the story) ... yet an equal and opposite insistence on serving as the perfect illustration of the hard-put-upon Everyman, a stand-in for the rest of the faceless millions fretting about foreclosures and ARM's.
The fact is, Edmund Andrews, and the newlywed wife, Patty, to whom we are introduced, are unlikable. Either he's honestly this offputting in real life, or he's not a good enough writer to stray from factual reporting and do himself any favors. Had he stuck with exposition, we'd all have been better off. He gives clear explanations, and he's a fine interviewer. Some of his one-on-ones (not with the famous like Greenspan, unfortunately) are excellent. He captures the character and drive behind some of the CEO's of the leading risky mortgage companies perfectly, while displaying a knack for portraying their high-flying ways as a distinctly American brand of adventurous "creative" financing mixed with generous dollops of downright charlatanism. And his reporting on other victims of the mortgage crisis, particularly ethnic couples who were taken in by mortgagors who employed ethnic brokers to swindle them, is especially finely done.
But ... gah. In the portions dealing with his own story, he's petty, arrogant, prickly, name-dropping and insufferable. And not in the way to which he almost gleefully admits--being "a prick" to his wife as the family finances circle the drain. No, it's his general voice that is grating -- whiny, self-justifying and boastful, even when interspersed with his good, solid journalism. And his wife is even worse, despite his (way too many) proclamations of how sexy he finds her. She's a spoiled, thoughtless, pouting, emotionally needy spendthrift in this account, and by the end of the book one is amazed that two such unpleasant people managed to find each other and then bind themselves together for a time period that is likely to fall far short of eternity. And that the pair share traits that lead them to their dual demise -- carelessness with money, a kind of brazen acceptance of their own exceptionalism -- is fitting. Despite the fact that Patty is pegged as the one foolish with money, at one point Andrews offhandedly admits being the one to find a $400 check he forgot to cash. It's difficult to work up sympathy for the couple.
Dave Weigel spotted some of this problem through reading an early excerpt of Busted that ran in the New York Times Magazine before publication of the full book. "Ok," Weigel said. "If you can hardly make your mortgage payment, how do you justify spending $700 at J. Crew? Isn’t the J.C. Penney outlet more appropriate when money is tight?" Yes, Dave, you're right. Yet Busted is littered with items that will make the frugal cringe--gourmet meals, Starbuck's stops, beach house rentals--yet an amazing lack of responsibility on display in the recounting beyond an occasional kind of "Shucks, we should probably slow down the spending. At least, the wife should."
Yet the tone turns out to be the lesser of the problems with the voice in this work. To put it bluntly, if this were a piece of fiction, what Andrews has applied in Busted is what a professor of literature would term an "unreliable narrator." You see, it turns out the author, in reputedly baring his predicament to the world, neglected to fill readers in on a couple of vital facts.
Like the rather important fact that Megan McCardle turned up:
... it turns out the story has been tidied up a little. Patty Barreiro, Andrews' wife, has declared bankruptcy twice. The second time was while they were married, a detail that didn't make it into either the book or the excerpt that ran in last Sunday's New York Times Magazine.
While Andrews fought back against McCardle's charges ...
None of this has any connection to our story. It had nothing to do with Patty being a spendthrift. It had no bearing on my ability to take out a mortgage, and it had nothing to do with our financial problems.
... nearly everyone who took up discussion of the book begged to differ. Oddly, the more ridiculous response came from Clark Hoyt, the ombudsman of the New York Times, who chose to deflect the question of whether there was a lack of disclosure and instead pointed readers to what in any normal world would really be a non-issue: whether in covering the mortgage crisis for the Gray Lady, Andrews was guilty of a conflict of interest.
No, Mr. Hoyt, how it affected his journalism for you is not the major point. In fact, one of the ethical quandaries Andrews is actually in the clear on are the ones in which he consulted with the appropriate member of the Times staff:
My gut feeling was that the political and policy debates wouldn't have any impact on me, one way or another. On the off chance I was affected. I would face the kind of issue as a reporter covering the debate over a middle-class tax cut. Since almost all reporters stood to gain from that kind of tax cut, nobody would be left to report on the debate if they all recused themselves. [NYT Standards Editor Craig] Whitney agreed, though he added that I should recuse myself from any stories involving my own mortgage lenders.
Yet ombudsman Hoyt, in attempting to answer questions after McArdle blew the whistle about Andrews' neglect to reveal his wife's bankruptcies in Busted, gives the omission a glancing brush-off, which drew the clear-eyed condemnation of Columbia Journalism Review, in a post worth reading at length, touching as it does on so much wrong with journalism today:
Clark Hoyt, the NYT public editor gets much of this wrong. He focuses mostly on whether there’s a conflict of interest in Andrews covering the economy while going through this experience.
That’s silly. We need more people covering the economy and finance that are going through these kinds of things. One of the great problems with financial journalism at the top is that it’s pretty much a monoculture with few ties to the working class or the poor (but many more ties to the very wealthy)....
But Hoyt focuses on a phony conflict issue and relegates the real issue to one paragraph:
"On Thursday, he came under attack from a blogger for The Atlantic for not mentioning in his book that his wife had twice filed for bankruptcy — the second time while they were married, though Andrews said it involved an old loan from a family member. He said he had wanted to spare his wife any more embarrassment. The blogger said the omission undercut Andrews’s story, but I think it was clear that he and his wife could not manage their finances, bankruptcies or no. Still, he should have revealed the second one, if only to head off the criticism."
Look, Andrews and Clark are both right that there’s plenty of information available for readers to know that Andrews and his wife couldn’t manage their money. This lapse is no high crime.
But that doesn’t excuse it. The bankruptcies are simply part of the story, and there’s no way around that. It’s not even a close call.
Just say so.
Amen. First-person accounts are valuable contributions to policy discussions, bringing complex issues down to bread-and-butter scenes where readers can see and feel the impact of political decisions and how they impact every-day lives. This is an important genre, and Andrews' background and personal story would have appeared to any publisher to be the perfect combo. Too bad about the snotty personalities involved and the lack of candor, eh?
Fortunately, another book, much less ballyhooed, and much more deserving of attention, hit shelves this spring around the same time as Busted.
***
Meet Mary Elizabeth Williams, freelance journalist, wife and mother of two, whose second pregnancy put her family in the market for a permanent home ... in New York City. Gimme Shelter is the premier counter-example to Busted, a work in which everything is pitch perfect -- the humor, the voice, the ratio of information to storytelling, and ultimately the account of how ordinary people with common sense resisted the lure of shitty ARM's and Godzilla loans that managed to suck in elitist finance experts like Andrews.
Williams and her husband had many of the same kinds of stories to tell about shady mortgage brokers peddling even shadier deals with even crappier houses; indeed, the subtitle of the book up front hints not only at the material between the covers, but the irreverent and entertaining read in store: Ugly houses, cruddy neighborhoods, fast-talking brokers, and toxic mortgages: My three years searching for the American Dream.
It's Williams sense of humor and self-deprecation that makes this book a joy. The three-year journey through various urban real estate markets and houses is a fun chronicle that reads like a romp through the personal ads, complete with romance-with-real estate implications. "If I were selling," she writes, "I would, as they say in the Match.com ads, clean up good. Shopping for a house is like dating, minus, unfortunately, the cocktails and sex."
Her tales of auditioning in front of co-op boards, of putting bids in and having them rejected, of inspecting houses far, far above what she and her husband are willing to pay but falling in love nonetheless, and her ultimate courtship of the house they purchased is riotous. Realtors as matchmakers make for some great character sketches throughout, and serve as subjects of some of the best one-liners:
"It's big," she promised, but I've lived enough places and looked at enough apartments to assume that God created realtors to make lawyers and publicists look honest.
Ultimately though, Gimme Shelter tackles a serious subject in an up-front manner, not only delving into the current market crisis, but looking at why we are such instinctive suckers for the "ownership society" line of what looks like malarkey on close examination. Throughout the book, her husband is much less enthusiastic about purchase and clearly would be satisfied as a lifelong renter. It's the author pushing to own a home, and many of the conversations that they have are, I'm sure, repeated nationwide as couples grapple with their personal comfort levels about spending, stability and home ownership.
She also pens a paean to city life, much maligned and in need of defense, she believes. Yes, she admits, they could move to suburbs or even to New Jersey--and in some sense, as her fellows are settling down in this manner, she considers it. But she keeps circling back to the city, and in one serious passage, she captures the vibrancy and value of our urban centers in a way few writers can:
If you live in a city, you spend your days moving through different worlds, often in the span of a few blocks. Race and class and money are in your face and mind all the time. Whatever language you speak, whatever color your skin, whatever God you worship or don't believe in, however much you earned or didn't last year, whatever genitalia you possess or gender you prefer, there are places where the neighbors don't want your kind because of exactly who you are. You'll bring down the property values or you're a carpetbagging poseur. Your music is too loud, or you're a classist snob if you think someone else's music is too loud. You're a townie if you've been in the neighborhood too long, a yuppie if you've arrived too late.
This leveling and mixing, Williams maintains, is a necessary ingredient for an exciting, passionate, democratic urban life. Trying to walk that fine line between safe neighborhoods and non-gentrification, between places where she and her family can see themselves using the parks, stores and streets, and the places where crime is just too challenging and blatant to overcome, creates an interesting and rewarding journey for the reader.
And it shows how real people can make wise and thoughtful decisions, no matter how many charlatans and pitch-men (and women) are trying to seduce them into borrowing above their means. Gimme Shelter is the antidote to Andrews' book, showing that sometimes knowing your limits and keeping your head not only keeps your financial books clear, but makes for much more genuinely interesting writing. Williams didn't need the access to Alan Greenspan to assert her credibility; her writing skill and humor did it for her.
Score another for the little guy, who writes a terrific book and gets to keep her house in the end, which is more than it appears will be said about Andrews, whose ethics and judgment will most likely suffer as a result of his book.