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Infiltrated: How to Stop the Insiders and Activists Who Are Exploiting the Financial Crisis to Control Our Lives and Our Fortunes
America: be warned.
A new wave of financial reformers has infiltrated our public institutions at both the state and national levels. A growing army of self-proclaimed activists, philanthropists, and politicians has infiltrated not only the Consumer Financial Protection Bureau, but the FDIC, the Treasury, and other regulatory agencies. This explosive new book from New York Times bestselling author Jay W. Richards reveals the shocking truth about:
A new wave of financial reformers has infiltrated our public institutions at both the state and national levels. A growing army of self-proclaimed activists, philanthropists, and politicians has infiltrated not only the Consumer Financial Protection Bureau, but the FDIC, the Treasury, and other regulatory agencies. This explosive new book from New York Times bestselling author Jay W. Richards reveals the shocking truth about:
320 pages, Hardcover
First published January 1, 2013
4 people are currently reading
58 people want to read
About the author
Jay W. Richards
27 books65 followersJay W. Richards has served in leadership positions at the Discovery Institute and the Acton Institute for the Study of Religion & Liberty, and is currently a Visiting Fellow at the Heritage Foundation.
He has written many academic articles, books, and popular essays on a wide variety of subjects, from culture, economics, and public policy, to natural science, technology, and the environment. His previous books include The Privileged Planet: How Our Place in the Cosmos is Designed for Discovery, with Guillermo Gonzalez (Washington DC: Regnery Publishers, 2004); The Untamed God: A Philosophical Exploration of Divine Perfection, Immutability and Simplicity (InterVarsity Press, 2003); Are We Spiritual Machines?: Ray Kurzweil vs. the Critics of Strong Artificial Intelligence, as editor and contributor (Discovery Institute Press, May 2002); and Unapologetic Apologetics: Meeting the Challenges of Theological Studies, as editor and multiple contributor, with William Dembski (Downers Grove: InterVarsity Press, February 2001).
Money, Greed, and God: Why Capitalism Is the Solution and Not the Problem (HarperOne, May 2009), seeks to explain the market economy to people who don’t like economics, and defend it against its religious critics.
Richards is also executive producer of several documentaries, including The Call of the Entrepreneur, The Birth of Freedom, and The Effective Stewardship Curriculum (Acton Media and Zondervan, 2009). He has been featured in several television-broadcast documentaries, including The Call of the Entrepreneur, The Case for a Creator, The Wonder of Soil, and The Privileged Planet, based on his book with astronomer Guillermo Gonzalez.
A self-described “shameless generalist,” he has academic specialties in philosophy, theology, and political science, including extensive research in formal logic.
He has a B.A. with majors in Political Science and Religion, an M.Div. (Master of Divinity) and a Th.M. (Master of Theology), with a thesis on social philosopher Michael Polanyi (from whom F.A. Hayek got his concept of “spontaneous order”). He also has a Ph.D. (with honors) in philosophy and theology from Princeton Theological Seminary. While at Princeton, he helped restart and edit the Princeton Theological Review, and led extracurricular apologetics seminars during his four years there.
His work has been covered (and sometimes harshly criticized) in The New York Times (front page news, science news, and editorial), The Washington Post (news and editorial), The Wall Street Journal, The Washington Times, Nature, Science, Astronomy, Sky and Telescope, The Scientist, Physics Today, California Wild (California Academy of Science), New Scientist, The Chronicle of Higher Education, American Enterprise, Congressional Quarterly Researcher, Human Events, American Spectator, First Things, Science & Spirit, Science & Theology News, Christianity Today, Crisis, National Catholic Register, World, Breakpoint, American Atheist, World Socialist of the International Committee of the Fourth International, and many other academic and popular outlets.
He has been interviewed for stories in print publications not just in the U.S., but also in Germany, Switzerland, France, New Zealand, Canada, Spain, and the UK.
Jay Richards has lectured at scores of academic conferences as diverse as the Evangelical Theological Society and the Western Economic Association, on scores of college and university campuses, at many public policy meetings, and on several occasions has lectured to members of the U.S. Congress and U.S. congressional staff.
He has written many academic articles, books, and popular essays on a wide variety of subjects, from culture, economics, and public policy, to natural science, technology, and the environment. His previous books include The Privileged Planet: How Our Place in the Cosmos is Designed for Discovery, with Guillermo Gonzalez (Washington DC: Regnery Publishers, 2004); The Untamed God: A Philosophical Exploration of Divine Perfection, Immutability and Simplicity (InterVarsity Press, 2003); Are We Spiritual Machines?: Ray Kurzweil vs. the Critics of Strong Artificial Intelligence, as editor and contributor (Discovery Institute Press, May 2002); and Unapologetic Apologetics: Meeting the Challenges of Theological Studies, as editor and multiple contributor, with William Dembski (Downers Grove: InterVarsity Press, February 2001).
Money, Greed, and God: Why Capitalism Is the Solution and Not the Problem (HarperOne, May 2009), seeks to explain the market economy to people who don’t like economics, and defend it against its religious critics.
Richards is also executive producer of several documentaries, including The Call of the Entrepreneur, The Birth of Freedom, and The Effective Stewardship Curriculum (Acton Media and Zondervan, 2009). He has been featured in several television-broadcast documentaries, including The Call of the Entrepreneur, The Case for a Creator, The Wonder of Soil, and The Privileged Planet, based on his book with astronomer Guillermo Gonzalez.
A self-described “shameless generalist,” he has academic specialties in philosophy, theology, and political science, including extensive research in formal logic.
He has a B.A. with majors in Political Science and Religion, an M.Div. (Master of Divinity) and a Th.M. (Master of Theology), with a thesis on social philosopher Michael Polanyi (from whom F.A. Hayek got his concept of “spontaneous order”). He also has a Ph.D. (with honors) in philosophy and theology from Princeton Theological Seminary. While at Princeton, he helped restart and edit the Princeton Theological Review, and led extracurricular apologetics seminars during his four years there.
His work has been covered (and sometimes harshly criticized) in The New York Times (front page news, science news, and editorial), The Washington Post (news and editorial), The Wall Street Journal, The Washington Times, Nature, Science, Astronomy, Sky and Telescope, The Scientist, Physics Today, California Wild (California Academy of Science), New Scientist, The Chronicle of Higher Education, American Enterprise, Congressional Quarterly Researcher, Human Events, American Spectator, First Things, Science & Spirit, Science & Theology News, Christianity Today, Crisis, National Catholic Register, World, Breakpoint, American Atheist, World Socialist of the International Committee of the Fourth International, and many other academic and popular outlets.
He has been interviewed for stories in print publications not just in the U.S., but also in Germany, Switzerland, France, New Zealand, Canada, Spain, and the UK.
Jay Richards has lectured at scores of academic conferences as diverse as the Evangelical Theological Society and the Western Economic Association, on scores of college and university campuses, at many public policy meetings, and on several occasions has lectured to members of the U.S. Congress and U.S. congressional staff.
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Displaying 1 - 5 of 5 reviews
May 28, 2017
Jay Richards takes a unique approach to discussing the causes of the 2008 financial crisis. His main purpose here is to tell the story of some of the real people and policies that brought about the crash. The first half of the book chronicles the personal and professional history of a few characters who remain somewhat out of sight, beyond the typically mainstream focus on investment bankers and stock market traders. The second half focuses on the effects of legislation to purportedly prevent another crisis, and articulates how free market principles are better.
Richards first tells the story of Herb and Marion Sandler, liberal philanthropists and activists who grew their Golden West Financial Corporation into one of the largest sub-prime lenders in the country. They invented the "pick a payment" loan model and lent billions of dollars in option-ARM mortgages; after the crisis hit, these loans became known as "toxic" or "zombie" mortgages. The Sandlers sold their company to Wachovia at the peak of the real estate boom, right before the crash, and the massive losses that resulted were among the primary forces that pulled Wachovia under.
Before the financial crisis hit and their lending practices came under more scrutiny, the Sandlers were adored by the media as advocates for sound financial policies that (supposedly) helped the poor, and they were known for their benevolent and generous philanthropy. Herb Sandler often railed publicly against sub-prime mortgages and the need for stricter regulations on lenders; but Richards shows unequivocally that the Sandlers literally invented the worst sub-prime products in the market, and were able to sell them by loosening lending standards--all in the name of helping the poor.
Side note: Richards recounts the fascinating story of a Saturday Night Live sketch from 2008 that, in addition to criticizing the Democrats for missing the signs of the crisis at Fannie Mae and Freddie Mac, and mocking sub-prime borrowers for taking out loans they obviously weren't qualified for, viciously criticized the Sandlers for building a multi-billion dollar portfolio of risky mortgages and selling it to Wachovia. The sketch was of a mock C-SPAN press conference, and the on-screen description below the Sandlers' names identified them as "people who should be shot." It caused quite a ruckus among the media and liberal elite, and the Sandlers' outrage was enough to get NBC to first edit the online video of the sketch, and then eventually pull it entirely. (Fortunately, Archive.org has an unedited copy.)
Here is one of the most shocking facts about the crisis that I wasn't aware of, and which isn't included in the mainstream narrative:
The next culprit of the financial crisis that Richards profiles is the Center for Responsible Lending, a non-profit advocacy group that fights against predatory mortgages, payday loans and other financial products that are purportedly harmful to the poor. Richards carefully catalogues the socialistic assumptions and deceptive advocacy practices underlying this organization and its founder, Martin Eakes. CRL has successfully banished--or smothered under onerous regulations--the short-term (payday) loan industry in a variety of states. But Richards defends this industry in principle (in practice, of course, there are always some bad actors), arguing that payday loans are actually a net benefit to the low income areas they crop up in.
Like Richards before he did his research, I had always thought payday lenders were predatory and destructive, trapping the poor in a cycle of bad debt and high interest rates. But Richards shows that this industry is unfairly demonized. One way opponents cast these loans in the worst possible light is by forcing lenders to publish their fees in the format of an APR (annual percentage rate). If a lender loans somebody $100 for a short term (two weeks) and charges a $15 fee to cover risks and underwriting expenses, that seems pretty reasonable. "But when you extrapolate the rate out over a full year"--which advocacy groups want to force lenders to do, even though it's a useless measure for an extremely short-term loan--"the APR is a whopping 391.07 percent." Richards continues:
This industry is far from perfect, but it seems to me that they do bring a lot of value to low-income borrowers. (This section was very timely for me to have read, considering the recent and much-ballyhooed comedic commentary by John Oliver on this very topic.)
Later on, Richards discusses the devastating effects of the Dodd-Frank legislation that Congress passed on the wake of the financial crisis. Dodd-Frank truly is unlike any other regulatory legislation in history; where past efforts have focused narrowly on particular topics, Dodd-Frank is extremely open-ended, creating a new regulatory agency that is unaccountable to Congress (either via oversight or even through the power of the purse) and given obscenely broad powers to pursue its interests for and against private enterprise. It effectively enshrines "too big to fail" into law, creating even more layers of uncertainty and skewed incentives in the marketplace. The more I read about this law--which is not even fully implemented or defined, and continues to metastasize each year--the more concerned I get about the sheer totalitarian nature of it. It is blatantly unconsitutional, and Richards describes a host of additional problems with the law.
Richards closes with a discussion of his proposed solution: less coercive and intrusive government and freer markets. He wonders aloud what is "the best way to discourage [a company like] Goldman Sachs from taking foolish risks that will lead to its bankruptcy." He answers:
Richards first tells the story of Herb and Marion Sandler, liberal philanthropists and activists who grew their Golden West Financial Corporation into one of the largest sub-prime lenders in the country. They invented the "pick a payment" loan model and lent billions of dollars in option-ARM mortgages; after the crisis hit, these loans became known as "toxic" or "zombie" mortgages. The Sandlers sold their company to Wachovia at the peak of the real estate boom, right before the crash, and the massive losses that resulted were among the primary forces that pulled Wachovia under.
Before the financial crisis hit and their lending practices came under more scrutiny, the Sandlers were adored by the media as advocates for sound financial policies that (supposedly) helped the poor, and they were known for their benevolent and generous philanthropy. Herb Sandler often railed publicly against sub-prime mortgages and the need for stricter regulations on lenders; but Richards shows unequivocally that the Sandlers literally invented the worst sub-prime products in the market, and were able to sell them by loosening lending standards--all in the name of helping the poor.
Side note: Richards recounts the fascinating story of a Saturday Night Live sketch from 2008 that, in addition to criticizing the Democrats for missing the signs of the crisis at Fannie Mae and Freddie Mac, and mocking sub-prime borrowers for taking out loans they obviously weren't qualified for, viciously criticized the Sandlers for building a multi-billion dollar portfolio of risky mortgages and selling it to Wachovia. The sketch was of a mock C-SPAN press conference, and the on-screen description below the Sandlers' names identified them as "people who should be shot." It caused quite a ruckus among the media and liberal elite, and the Sandlers' outrage was enough to get NBC to first edit the online video of the sketch, and then eventually pull it entirely. (Fortunately, Archive.org has an unedited copy.)
Here is one of the most shocking facts about the crisis that I wasn't aware of, and which isn't included in the mainstream narrative:
As a result of the arduous efforts to expand homeownership, by 2008 about 27 million loans "were subprime or otherwise risky loans"--that is, nontraditional loans. That was half the mortgages in the United States! …. Fannie Mae and Freddie Mac held 12 million of those loans. FHA and other federal agencies (such as the Veterans Administration and Federal Home Loan Banks) held 5 million, and Community Reinvestment Act and HUD programs held another 2.2. million. That's a total of 19.2 million risky loans held by entities controlled by or within the federal government, leaving 7.8 million for Countrywide, Wall Street, and so forth. Let that fact sink in, because this is the one that shatters all the mythology surrounding the financial crisis. Two-thirds of all risky loans in the system "were held by the government or entities acting under government control," and they existed because of aggressive government housing policy. (160-1)
The next culprit of the financial crisis that Richards profiles is the Center for Responsible Lending, a non-profit advocacy group that fights against predatory mortgages, payday loans and other financial products that are purportedly harmful to the poor. Richards carefully catalogues the socialistic assumptions and deceptive advocacy practices underlying this organization and its founder, Martin Eakes. CRL has successfully banished--or smothered under onerous regulations--the short-term (payday) loan industry in a variety of states. But Richards defends this industry in principle (in practice, of course, there are always some bad actors), arguing that payday loans are actually a net benefit to the low income areas they crop up in.
Like Richards before he did his research, I had always thought payday lenders were predatory and destructive, trapping the poor in a cycle of bad debt and high interest rates. But Richards shows that this industry is unfairly demonized. One way opponents cast these loans in the worst possible light is by forcing lenders to publish their fees in the format of an APR (annual percentage rate). If a lender loans somebody $100 for a short term (two weeks) and charges a $15 fee to cover risks and underwriting expenses, that seems pretty reasonable. "But when you extrapolate the rate out over a full year"--which advocacy groups want to force lenders to do, even though it's a useless measure for an extremely short-term loan--"the APR is a whopping 391.07 percent." Richards continues:
Do you see the problem? Using APR to express the consumer's cost for any small-dollar loan is misleading and virtually useless. It is like comparing the price per mile on taxi service in Manhattan with the price per mile on a roundtrip flight between New York and Los Angeles. The flight cost $70 per 1,000 miles. The tax will run you over $2,000 for the same distance, and that's if you don't catch any red lights. Thieving taxi drivers! This way of measuring consumer loans' cost makes the cab ride look like a huge rip-off, when it could very well be your best way to get from Battery Park to Eighty-Fifth Street for a job interview. That's why Dr. Harold Black, Professor of Financial Institutions at the University of Tennessee and an expert on APR policy, says that for small, short-term loans, APR is a "terrible metric to use to measure lending costs." (211)
This industry is far from perfect, but it seems to me that they do bring a lot of value to low-income borrowers. (This section was very timely for me to have read, considering the recent and much-ballyhooed comedic commentary by John Oliver on this very topic.)
Later on, Richards discusses the devastating effects of the Dodd-Frank legislation that Congress passed on the wake of the financial crisis. Dodd-Frank truly is unlike any other regulatory legislation in history; where past efforts have focused narrowly on particular topics, Dodd-Frank is extremely open-ended, creating a new regulatory agency that is unaccountable to Congress (either via oversight or even through the power of the purse) and given obscenely broad powers to pursue its interests for and against private enterprise. It effectively enshrines "too big to fail" into law, creating even more layers of uncertainty and skewed incentives in the marketplace. The more I read about this law--which is not even fully implemented or defined, and continues to metastasize each year--the more concerned I get about the sheer totalitarian nature of it. It is blatantly unconsitutional, and Richards describes a host of additional problems with the law.
Richards closes with a discussion of his proposed solution: less coercive and intrusive government and freer markets. He wonders aloud what is "the best way to discourage [a company like] Goldman Sachs from taking foolish risks that will lead to its bankruptcy." He answers:
Two main alternatives: (1) the federal government could write rules of incomprehensible detail and complexity to try to account for every possible eventuality and so prevent collapse at Goldman Sachs or rescue it before it collapses; or, (2) the government could clearly and consistently maintain the policy that the companies and executives that take risks in the hope of future benefit get to enjoy those benefits if they succeed, but must bear the weight of the consequences if they fail. The first option would almost certainly destroy the institution being regulated. The second option, however, would create market discipline, which is the greatest regulator, because it aligns incentives correctly. It strengthens and clarifies the key market signal. Any secondary regulations imposed by government should strengthen that key signal--namely, that you gain when your risks pan out, and you pay the consequences if they fail. At the very least, it should not interfere with it. Unfortunately, this commonsense market regulator has been mostly scrambled and subverted by a government preference for option number 1--our old friend, the moral hazard. (225)
March 6, 2014
Infiltrated is a wake-up call for Americans who have had their future sold out by their own government. According to the author’s insightful analysis of the recent financial debacle, government regulators forced lenders to meet high quotas of risky subprime mortgages, creating an artificial boom in house prices and credit securities, and then blamed the banks when a proverbial house of cards toppled over. Now with a debt larger than the economy, the American government is using the financial crisis as an excuse for even more harmful regulation of the banking industry and increased manipulation of civil society.
August 19, 2013
I wish it was possible to read a book such as this and stay focused on the facts without framing the bad guys as either Liberal or Conservative, Democrat vs. Republican. The book was interesting and well researched, but I started getting the feeling half way through that the "truth" was focused more on Liberal is bad and Conservative is good. I finished reading the book feeling like, "Well it appears that the Democrats have learned well from decades of exploitation exhibited from the Republican side."
November 26, 2013
I am not an economist in any way shape or form. On top of that I am Canadian, and so, much of this book was news to me. It was an enthralling book. I learned alot, and enjoyed reading it from beginning to end. For me full review see my blog (philosopherdhaines.blogspot.ca) sometime after the 29th of November, 2013.
Read
January 28, 2016I have a signed copy from the author. Dr Richards is a compelling writer.
Displaying 1 - 5 of 5 reviews