This book reviews the fascinating-and horrifying-story of how American savings and loan associations (also known as 'thrifts') managed to rack up horrendous losses during the decade of the 1980s. . . . Rom tells the story with great skill, and it was a pleasure for me to watch the details of the unfolding of a financial Greek tragedy.
Winner of the Harold Lasswell Award of the American Political Science AssociationThe FSFIC failed spectacularly during the 1980s, costing taxpayers an estimated $200 billion. In this award-winning analysis, Rom examines the political causes of this “thrift tragedy.” He directly confronts-and rejects-the dominant scholarly “public choice” view that public officials were motivated mainly be self-interest. Instead, Rom argues that politicians and bureaucrats generally acted in the “public spirit” by attempting to obtain the common interest as they saw it. Using new evidence and innovative methods, Rom demonstrates that FSLIC's failure unfolded because of commitments that officials had made in the past and their uncertainties about how to fulfill these obligations in the future.
The spectacular failure of the savings and loan industry during the 1980s, resulting in losses to taxpayers of approximately $180 billion, is the subject of this volume by Mark Carl Rom. It will undoubtedly become the definitive work in political science on what is believed by many to be the most significant public policy fiasco in recent memory.
Rom's book is required reading for those fascinated by the S&L crisis.
The work is clearly substantially original . . . often clever exploitation of available data from other sources. . . . It goes against the grain of a lot of influential writing on the topic.