'Citty upon a hill'

"'Citty upon a hill'" Continued...

Issue: "2010 Books Issue," July 3, 2010

As one result, U.S. productivity, which grew at an average yearly rate of 2.2 percent from 1870 to 1970, dropped to 1.1 percent from 1971-1995-the lowest productivity growth of all advanced industrialized nations.

How have Americans survived the productivity slowdown? They borrowed, say the Hoppers. "Credit is to the economy what steroids are to athletes; it enhances performance but, unless used in moderation, at a serious cost to the economic health of the nation."

And that brings the brothers to the current financial crisis, which they trace to "profligate lending" and bad economic policies. Longtime Fed chief Alan Greenspan (an Ayn Rand devotee) comes in for particular criticism: Believing that "the proper role of the central bank was 'to take away the punchbowl when the party is getting good,'" the Hoppers say "Greenspan and his colleagues did exactly the opposite, adding gin, then vodka, and finally a line of cocaine to the bowl. The result has been catastrophic."

But catastrophe is what it may take to concentrate the mind of American business, these authors suggest, and to propel U.S. management-both private and public sector-to take a fresh look at its Puritan roots.
For more on Kenneth and William Hopper, see "Long road back to Plymouth" by Mindy Belz, June 23, 2010.

Disciplined decision-maker

By Mindy Belz

You have to admire the discipline of Henry Paulson. Described by colleagues as a devout Christian Scientist who does not drink or smoke, he writes in the preface of his On the Brink: Inside the Race to Stop the Collapse of the Global Financial System (Business Plus, 2010): "I have been blessed with a good memory, so I have almost never needed to take notes." During his 2006-2008 tenure as U.S. treasury secretary, he said he did not use email and seldom referred to briefing memos prepared by his staff. That makes his insider, diary-like account of 2008's unfolding financial crisis subject to bias and ego-but all the more personal. With Lehman in bankruptcy and AIG right behind, Paulson calls his wife on Sept. 14 for prayer, and she recites 2 Timothy 1:7 to him over the phone. The former Goldman Sachs CEO admits that there were "lapses in judgment" at Goldman-but argues that Americans shouldn't be as furious at Wall Street as at the inadequacy of the total financial system, which he thinks needs regulatory reform.

The Puritan Gift praises Paulson's work at both Treasury and Goldman, while Michael Lewis' The Big Short excoriates it-making all three books compelling reads of the ongoing economic troubles.


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