Category: Author Interviews

Eugene O’Neill: A Life in Four Acts

Eugene O'NeillFour seems to be Eugene O’Neill’s lucky number. He was the recipient of four Pulitzer Prizes for Drama, the most won by any single playwright. His most famous play, Long Day’s Journey Into Night, was written in four acts. Robert Dowling’s new biography Eugene O’Neill: A Life in Four Acts, forthcoming this October continues that theme, highlighting how the stories he told through his plays interweave with his life, divided out into four episodes. We sat down with Dowling to talk about writing the biography of such an immense figure in American theater.

Yale University Press: You have long been a fan of O’Neill’s work, but what prompted you to write a book about his life?

Robert M. Dowling: In the final session of the first O’Neill seminar I taught, I asked my students, “Which plays did you enjoy the most?” Without missing a beat, one raised his hand and said that O’Neill’s life was his greatest play. Many others nodded in agreement. That moment planted the seed for this book. It turns out that the dramatic structure of O’Neill’s life uncannily matches that of his best plays. And, even more fascinating for a biographer, nearly every fictional story O’Neill told interweaves with actual stories from his own life.

YUP: O’Neill won the Nobel Prize for Literature—the only American playwright to do so. How is his literary achievement viewed today, some 60 years after his death?

RMD: O’Neill also won four Pulitzers, yet he probably received more bad reviews than any other major American author. However, having scrutinized virtually every review of his premieres and books, I can say that even his so-called clunkers were still credited with breakthroughs that offered something unique, something never before attempted on the American stage. O’Neill is enjoying a new “renaissance,” with dozens of revivals over the past decade. American and international audiences alike show an unquenchable desire for his plays, and there’s no end in sight for this playwright’s potential to speak to contemporary audiences as he once spoke to his own.

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What can the Nobelman case tell us about the next financial crisis?

Other People's Houses: How Decades of Bailouts, Captive Regulators, and Toxic Bankers Made Home Mortgages a Thrilling Business

To address the 2008 financial crisis, congress passed the Troubled Asset Relief Program (TARP) to bailout out the banks and the federal government committed trillions of dollars to save the entire system. Fed chairman Ben Bernanke defended the massive government intervention to rescue the banks.  He said, “it wasn’t to help the big firms that we intervened. . . . When the elephant falls down, all the grass gets crushed as well.” Jennifer Taub, author of Other People’s Houses, argues that the subsequent Dodd-Frank reform legislation was unsuccessful in addressing the underlying causes of the financial crisis. In drawing connections between the Savings and Loan crisis of the 1980′s, she warns that the pattern will continue and we will be faced with yet another financial crisis that will disproportionately affect lower income individuals.

“Taub’s beginning is a surprise: A 1993 Supreme Court decision about how bankruptcy law applies to mortgages.”—Pat Regnier, Money Magazine

Jennifer Taub opens Other People’s Houses with the story of Harriet and Leonard Nobelman. Taub uses their supreme court case as a starting point to understanding the current financial crisis. She makes a compelling argument for action against these “too big to fail” banks. Learn about how the story of the Nobelmans mortgage and bankruptcy still affects homeowners today in the video below.

For further reading on the subject, our online Q&A with Jennifer Taub will tell you everything you need to know about the housing market collapse.

Beyond the University Makes a Splash

Wesleyan University recently sat down to talk to Michael S. Roth, president of the university and author of Beyond the University: Why Liberal Education Matters. The video and post originally appeared in Wesleyan University’s blog, which you can read here.


Beyond the University: Why Liberal Education Matters by Michael S. RothA June 10 note to the President’s Office at Wesleyan grabbed attention—Harvard’s Office of Undergraduate Education wanted help in quickly obtaining 125 copies of Michael Roth’s new book to distribute to Harvard faculty members.

The email was indicative of the excitement that Roth’s latest book, Beyond the University: Why Liberal Education Matters (Yale University Press), has generated since it was published in May. The sixth book that Roth has authored, it has received substantial coverage in the national media and has helped put into historical context today’s debates over the value of a broad, liberal education. Roth reminds readers that accusations about the impracticality of liberal education date back to the days of the Founding Fathers, and are never less convincing than now. He draws on the writings of prominent thinkers such as John Dewey, Jane Addams, W.E.B. Dubois and Thomas Jefferson to make the case for a pragmatic liberal education.

Reviews of the book have appeared in The Washington Post and Inside Higher Ed, while a number of related op-eds and essays by Roth have been published in outlets such as The New York Times, The Chronicle of Higher Education, The Boston Globe and The Daily Beast. President Roth has discussed his book with The Atlantic magazine, and on public radio stations around the country.

“We’ve been delighted with the amount of attention the book is getting, both on the local and national levels. It’s engaging precisely with the big and urgent questions out there about higher education, just as we hoped. President Roth has been a great spokesperson for defending the humanities, which have been under scrutiny of late,” said John Donatich, director of Yale University Press. “We are currently selling into a second printing of the book, and it’s very possible we could go into a third printing. We expect it to sell even more in paperback down the road.”

In addition, Chinese and Korean translations of the book are in the works.

Reviews of the book have been positive. Writing in The Washington Post, Christopher B. Nelson, president of St. John’s College in Annapolis, praises it as a “lucid, helpful and accessible account of the current challenges to higher education.”

“By presenting his argument historically, Roth, president of Wesleyan University, maintains a judicious distance from his subject and avoids the trap—all too enticing for a zealous advocate—of delivering a passionate apologia for a broad generalization. Instead, he gives us a substantial and lively discussion that allows the reader to maintain an open mind while examining the strengths and weaknesses of the several threads, each in its own turn,” writes Nelson.

And Kirkus Reviews writes: “While underscoring the democratic spirit of a liberal arts education, one designed to produce ‘active citizens rather than passive subjects,’ Roth traces how even the Founding Fathers of the republic restricted the education to patrician white males, excluding women, slaves and others—and that the question of whether farmers need to be able to read Shakespeare has long sparked debate. Between pragmatism and idealism, the author strikes a moderate, balanced approach. The result is more like a primer on the history of higher education than a manifesto.”

See all media coverage of Beyond the University here.

Read more about Beyond the University in this Wesleyan Connection article.


Recommended Reading for the U.S.-China Strategic and Economic Dialogue

Unbalanced: The Codependency of America and China by Stephen RoachThe U.S.-China Strategic and Economic Dialogue (S&ED) is taking place in Beijing, China on July 9–10. In his new book, Unbalanced: The Codependency of America and China, Stephen Roach addresses the current and prospective state-of-play in the economic relationship between China and the United States. As the S&ED approaches, we’ve asked him to weigh in on several key aspects of this important exchange between the world’s two largest and leading economies.

Yale University Press: What is the S&ED and why is it so important?

Stephen Roach: In an effort to formalize and coordinate high level exchanges on economic and financial issues between the U.S. and Chinese governments, a Strategic Economic Dialogue (SED) was launched in December 2006 by Former Treasury Secretary Henry Paulson. In 2009, the Obama Administration broadened the focus of the dialogue to include foreign policy and security discussions—hence, inserting an ampersand into the acronym (S&ED)—and reduced the frequency of engagement from twice a year to an annual meeting. The summit continues to rotate back and forth between Washington and Beijing. It brings together on a regular basis the largest delegation of senior government officials of both nations. Its core mission is to generate a “dialogue that will focus on addressing the challenges and opportunities that both countries face on a wide range of bilateral, regional, and global areas of immediate and long-term economic and strategic interest.” Bottom line: The S&ED is now the main event in the U.S.-China debate.

YUP: What is the mood heading into the upcoming S&ED?

SR: Not good. Tensions have intensified recently on three key fronts—trade and currency (again), cyberhacking, and maritime and territorial disputes in the East and South China Seas. Unsurprisingly, both nations are blaming the other for causing these problems. These are classic symptoms of the blame-game of codependency that I stress in Unbalanced—a penchant for partners to hold the other accountable for problems of ones own making. For its part, U.S. complaints are undoubtedly exaggerated by the domestic political cycle—a fairly typical outbreak of China bashing that has broad bipartisan appeal heading into national elections. China is also shaped by its own political agenda—ironic for a one-party system but in keeping with President Xi Jinping’s grass roots appeal for restoration of the so-called China Dream.

YUP: What do you see as the key issues in the U.S.-China economic relationship that you would like to see addressed at this year’s S&ED?

SR: The main problem with the economic relationship is that it has moved into the danger zone of a destructive codependency, where, as I wrote in a recent op-ed on Project Syndicate, both the U.S. and China are focused more on frictions than on synergies. The challenge is to embrace the opportunities of a more constructive interdependency. In that vein, I would like to see progress on two fronts—moving ahead on a U.S.-China bilateral investment treaty (BIT) and reestablishing military-to-military exchanges on the increasingly contentious cybersecurity issue.

YUP: How can the U.S. benefit from a bilateral investment treaty with China?

SR: China is at the early stage of a powerful transformation—moving from a manufacturing-led investment and export growth strategy to a services-led consumer society. In Unbalanced, I estimate that the growth in Chinese services will amount to some $12 trillion between now and 2025. In an environment of ever increasing IT-enabled global connectivity, many services have been transformed from nontradables to tradables. In the book, I calculate that the tradable portion of China’s coming bonanza in services growth could amount to between $4 and $6 trillion by 2025. No one is better positioned than the United States—the world’s largest and most competitive services economy—to garner a significant share of China’s coming wave of services development. The key will be having access to the growth in China’s domestic services market—a critical objective of a bilateral investment treaty.

YUP: Will China enjoy equal benefits from a bilateral investment treaty with the United States?

SR: Yes, that’s precisely the point. What we get on access to Chinese markets they will rightfully want and demand from us. That’s not to say that each nation replicates precisely the same industry and product-specific access of the other. There will be differences in what each would consider “out-of bounds”—the so-called negative list characteristic of all trade negotiations. But there can be no mistaking that China is now moving aggressively to invest in foreign markets, including those in the United States. According to a tabulation by the consultancy Rhodium Group, China’s outward-bound foreign direct investment into U.S. markets has just surpassed American fixed investment into China for the first time ever. Just as U.S. companies have sought to capture share in Chinese markets, it is only logical that China’s increasingly globalized multinationals seek to do the same in the United States. Both nations benefit from this aspect of economic integration—consistent with the familiar “win-win” mantra of globalization. Furthermore, if China and the United States reach accord on a rules-based framework of market access, that could well set the stage for broader trade liberalization, including China’s participation in the Trans Pacific Partnership (TPP) that the U.S. is currently negotiating with eleven other countries in the Asia-Pacific region. Excluding China from TPP would be a mistake. Progress on a BIT could well avoid such a blunder. That would be icing on the cake.

YUP: But any treaty between nations would need to be approved by the U.S. Senate. What are the chances that a dysfunctional Congress would agree to such an action?

SR: Given the political polarization in Washington, there is little possibility of Senate approval of a BIT with China in the foreseeable future. Realistically, however, U.S. and Chinese negotiators still have considerable ground to cover before presenting any such accord to their respective governments for ratification. The soonest I could envision that occurring would be late 2015 or early 2016—hopefully squeezing through a narrow window in the U.S. political cycle between the upcoming off-year elections and the next Presidential campaign. While this may seem unrealistically optimistic—especially in light of the long and arduous negotiations that preceded China’s accession to the WTO in 2001—there is growing support for such action by trade experts in both countries. An especially strong appeal for a BIT was recently made on the op-ed pages of The Wall Street Journal by none other than Ambassadors Charlene Barshefsky and Long Yongtu, the two principal negotiators of the China-U.S. WTO accord. Notwithstanding the compelling arguments and growing support outside the Washington Beltway for a U.S.-China BIT, it would be naïve to presume that Congress will suddenly put aside its long-standing anti-China biases. That remains a major fly in the ointment.

YUP: How do the charges and counter-charges over cyberhacking affect the relationship and can the upcoming S&ED do anything to calm the waters on this key issue?

Stephen Roach

Stephen Roach: Photo by Tony Rinaldo

SR: Painfully, cyber-espionage has become a way of life in the Internet Era. In terms of the U.S.-China relationship it has become an increasingly contentious issue in the past eighteen months following the January 2013 release of a report by a leading cyber security firm Mandiant that documents alleged hacking of U.S. companies by a cyber intelligence unit embedded in the Chinese army. That report served as the basis of a recent U.S. Department of Justice indictment of five officers in the People’s Liberation Army on charges of espionage, theft of trade secrets, identity theft, and fraud. Following that indictment, China has withdrawn from the military-to-military exchanges that were established at last year’s S&ED in July 2013, denying the validity of U.S. allegations and arguing that the evidence of U.S. cyber hacking provided by former NSA contractor, Edward Snowden, portrays equally egregious violations by the United States. This is a classic example of how the finger pointing of codependency can get partners into serious trouble. A resumption of military-to-military exchanges on cyber issues offers the only viable avenue of resolution. The S&ED is the best platform to accomplish that objective.

YUP: How do China’s economic leaders currently view the U.S. economy?

SR: They still view the U.S. economy with great admiration—as the largest and strongest economy in the world and as an economy that sets the bar very high in terms of innovation, technological change, and entrepreneurial start-ups. In the same sense, they recognize that the U.S. was seriously wounded by the Great Financial Crisis of 2008-09 and will take a long time to return to its former pre-crisis health and vigor. China continues to worry about macroeconomic imbalances—its own as well as those of the United States. It is attempting to address its imbalances by shifting to more of a consumer-led growth strategy. It is disappointed that America does not seem to be addressing its imbalances after the turmoil of such a wrenching crisis—preferring, instead, to sustain an historic shortfall of domestic saving and thereby still rely on others, such as China, to fill that void. China views this as an inherent source of macro-instability in the U.S. that leads to trade and currency tensions that always seem to be debated at S&EDs. The current Dialogue is hardly an exception in this regard—epically in light of the U.S. Treasury’s recent expression of concern (PDF) over a supposed shift in Chinese currency policy.

YUP: What do you advise as the steps needed to correct the “imbalance” in our two economies?

SR: The solution is conceptually quite simple—China needs to save less and consume more. America needs to do the opposite—consume less and save more and deploy that saving toward rebuilding competitiveness by investing in human capital, infrastructure, and manufacturing capacity. But talk is cheap—the heavy lifting of implementation is where the rubber meets the road. China. I believe, is on that road to rebalancing. The United States, I fear, is not. Instead, we remain fixated on the excesses of debt- and asset-driven consumer-led growth as the crux of the American Dream. In a codependent relationship, this asymmetrical response is troubling. America is likely to feel pressure as China shifts from surplus saving to saving absorption and thereby provides support for the safety net of its own citizens rather than offering such support for American citizens. In response, the United States will find itself lacking the external source of saving it has long relied on as the sustenance of its unbalanced growth. This is the subtext of what is likely to be an equally asymmetrical engagement at the upcoming S&ED in July 2014. It’s the “S” that remains the big problem for Washington—a failure to comprehend the strategic imperatives of America’s rebalancing agenda.


Stephen Roach is senior fellow, Jackson Institute for Global Affairs and School of Management, Yale University. Prior to that he was Chairman of Morgan Stanley Asia, and for the bulk of his career on Wall Street was Chief Economist of Morgan Stanley. Prior to joining Morgan Stanley in 1982, Mr. Roach served on the research staff of the Federal Reserve Board and was also a research fellow at the Brookings Institution. He holds a Ph.D. in economics from New York University. Roach has written extensively for the international media and appears regularly on television around the world.

A World Without Jews: The Nazi Imagination from Persecution to Genocide (Author Interview Video)

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On the night of November 9, 1938, now known as Kristallnacht, the Nazis burned the Hebrew Bible everywhere in Germany. In the video below, Alon Confino explains why this act, among the other horrors committed that night, was particularly unusual. There is not a direct connection between the Nazi’s racist ideology and the burning of religious holy objects. The act can only be understood as part of the Nazi’s effort to build a new civilization independent of previous religious ideas and morality. Confino explores the thoughts and ideas that led the Nazi’s to the belief that Jews and Judaism had to be eradicated to build this new society in A World Without Jews: The Nazi Imagination from Persecution to Genocide. Watch Confino’s eloquent responses to the questions of why we should strive to understand the Nazi imagination,  and why historical storytelling is important.

“The main issue in explaining the holocaust is not what happened in Auschwitz, but is about the imagination that made Auschwitz possible to begin with.”Alon Confino

Madness and Memory: A Conversation with Nobel Laureate Stanley B. Prusiner, M.D.

Madness and Memory CoverAlthough he encountered enormous skepticism, Dr. Stanley B. Prusiner persevered in his research on the causes of degenerative brain diseases, convinced the scientific community of his findings, and, in 1997, received the Nobel Prize.  He argued that conditions including scrapie in sheep and goats, mad cow disease in cattle, and Creutzfeldt-Jakob disease in humans were caused by “prions”–a term he arrived at by combining “protein” and “infection.”  The idea that proteins could cause infectious diseases contradicted the scientific understanding of the time, which held that only agents with genetic material–viruses, bacteria, fungi–were potential infectious agents. Prusiner’s book, Madness and Memory, tells the story of his remarkable discovery and recounts the obstacles he overcame before others would recognize his work’s importance. We sat down with Prusiner to discuss the origins of his hypothesis, the nature of discovery, and what yet remains to be done.

Yale University Press: In a time when research into infectious disease depended on the assumption that infection was caused by the presence of a living agent, what prompted you to posit that proteins (prions) were at the heart of neurological diseases/ “transmissible spongiform encephalopathies?”

Dr. Stanley B. Prusiner: What prompted me to suggest that the scrapie agent was composed only of a protein is that as we enriched scrapie infectivity relative to other molecules, we kept finding evidence for protein and less and less evidence for a nucleic acid (DNA or RNA). These results were unexpected but eventually we were able to study preparations in which we had removed 99% of the contaminating proteins and nucleic acids. Such preparations were subjected to six procedures that modified nucleic acids and six other procedures but altered proteins; only the procedures that modified proteins were found to reduce scrapie infectivity. In contrast, procedures that damaged or modified nucleic acids did not change the infectivity.

YUP: You cite your “vaunted self-confidence” on a few occasions in Madness and Memory. Do you think this, in addition to private funding, is what allowed you to persevere in the face of hurdles, such as lack of laboratory space, mice, and other resources, along with your peers’ derision and hesitation to collaborate?

SBP: Before venturing into studies of the scrapie agent, I believed that I had a reasonable grasp of how to do the good science with sufficient controls and well-thought-out experiments. I also believed it would be possible to make modest progress if I remained focused and was lucky. What I did not know is how the work would turn out and whether the progress would be sufficient to maintain the needed funding. Yes, private support was very important but government grants were equally critical — without both, the work would have floundered.

Dr. Stanley B. Prusiner; Photo by Russ Fischella

Dr. Stanley B. Prusiner; Photo by Russ Fischella

YUP: How did you react to others’ attempts to take credit for your work, and what did you do to remain in the public consciousness as the originator of the term, prion?

SBP: Proper credit in science is very important. Many scientists work very hard for years and never make a big discovery. Only a few are lucky enough to stumble into an important discovery. More than any other profession, proper credit for being the first person or group to make a discovery is critical. A particular discovery only happens once, and whether you are second, third, or twentieth, it makes no difference. It is important to recognize that there will be no re-discovery: there will be no rematch, no new World Series, or no new Super Bowl next year. Once the discovery is made, it is final. Obviously, all scientific discoveries must be independently confirmed and only then does it become part of the body of scientific knowledge. One of the great aspects of scientific investigation is that discoveries are accorded to those that publish first in peer-reviewed, scholarly journals — this is the currency of scientific discovery.

YUP: Now that your work, once deemed heretical, is widely accepted and serves as the basis for diagnosis and eventual cures, how soon do you feel the scientific community will be able to tackle cures for other fatal neurological diseases, such as Lou Gehrig’s, Alzheimer’s, and Parkinson’s?

SBP: While the work on PrP prions causing Creutzfeldt-Jakob disease is now well accepted, there is not universal acceptance of prions causing Alzheimer’s, Parkinson’s, Lou Gehrig’s, and other neurodegenerative diseases. But the evidence is mounting, and in time, I believe such ideas will become widely accepted. We are working diligently on developing drugs that will slow and possibly halt the progression of neurodegenerative diseases.

YUP: In your speech at the 1996 Nobel Banquet, you mentioned that the course of prion study has reflected an odyssey that has taken you from “heresy to orthodoxy.” Considering the various sentiments about prions (Protein-only hypothesis, viral hypothesis, etc.), do you feel that the odyssey is over?

SBP: The scientific odyssey that began several decades ago is still not over. Only when we and others have developed therapeutics that prevent Alzheimer’s, Parkinson’s, Lou Gehrig’s diseases, the frontotemporal dementias, and many other neurodegenerative disorders will the end of these devastating illnesses come into focus. Once we can eradicate these diseases, then this odyssey will come to a proper close.


Stanley Prusiner, M.D. is director of the Institute for Neurodegenerative Diseases and professor of neurology at the University of California, San Francisco. The recipient of an array of scientific honors, he was awarded the Nobel Prize in Physiology or Medicine in 1997. He lives in San Francisco.

The History of Rock ‘N’ Roll in 10 Songs: A Conversation with Greil Marcus

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In anticipation of the Saturday, May 31 broadcast of the 2014 Rock ‘N’ Roll Hall of Fame inductees, we are excited to announce cultural critic and Rolling Stone columnist Greil Marcus’ new book, The History of Rock ‘N’ Roll in Ten Songs, to be published this September. This book’s straightforward title belies its unconventional approach to documenting the history of rock ‘n’ roll music. Drawing on songs 1956 to 2008, Marcus highlights unexpected connections and lines of influence to tell the story of the genre. You won’t find the songs and artists you expect in the table of contents, we sat down for a Q&A with Marcus to explain why:

Yale University Press: How did the idea for the book come about?

Greil Marcus: My editor Steve Wasserman wondered if I’d write a history of rock ’n’ roll. I thought it was a terrible idea, that it had been done to death, well and poorly, that there was a finished and accepted narrative that rendered any retelling of the story redundant and pointless. But, then I thought: What if the book was nonchronological, discontinuous, and left out almost everyone who couldn’t be left out (Elvis Presley, Chuck Berry, James Brown, Bob Dylan, the Rolling Stones, Aretha Franklin, the Sex Pistols, Michael Jackson)? What if it neglected the well-known, iconic moments (the Beatles on the Ed Sullivan Show, Bob Dylan going electric), and centered instead on a small number of songs, each of which in its own unique way embodied rock ’n’ roll? That interested me—and the idea became this book.

YUP: Isn’t this a ridiculous conceit?

GM: Sure. The premise of the book—trying to ascribe the entire history of a form containing hundreds of thousands of exemplars into ten—is fundamentally absurd. That’s what makes it fun. Maybe we could hold a contest to see what ten songs readers would choose to sum up this history. The prize would be a copy of this book for the winner to tear up.

Preview Greil Marcus’ full list of song choices in this advance look at the The History of Rock ‘N’ Roll in Ten Songs.


We can’t wait to hear what songs our readers would choose to represent the history of rock ‘n’ roll. Follow the #HistRockNRoll10 conversation and share your comments and playlists with us on The History of Rock ‘N’ Roll in Ten Songs’s Facebook page.

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Jennifer Taub Explains Everything You Need To Know About the Housing Market Crisis

TaubThe United States is still struggling to understand and recover from the financial crisis that flared up in 2007-8. The story of the housing market, subprime mortgage lending practices, and the mistakes responsible for the crisis is both complex and essential to understand in order to avoid repeating. In this exceptionally informative Q&A, Jennifer Taub, author of Other People’s Houses: How Decades of Bailouts, Captive Regulators, and Toxic Bankers Made Home Mortgages a Thrilling Business, explains what you need to know about the housing market failure.

Yale University Press: There are numerous news stories of late, which talk about the comeback of the housing market, in particular in urban centers like New York City. Is the housing crisis—and the associated economic downturn—safely behind us?

Jennifer Taub: Stories of all-cash bids for New York City apartments and soaring sales of luxury homes in San Francisco belie the hard reality that the housing market has not recovered. After a few years of gains, we now see signs of stagnation. According to new data from Standard & Poor’s, home prices appear to be flattening. Volume is also down with sales of new and existing homes falling.

Applications for home purchase mortgage loans slid by nearly 18% this April compared to last year, according to the Mortgage Bankers Association. Completed home mortgage loans (including refinancings) dropped more; this quarter they were down 58% compared to the same time last year. This is the lowest level since 2000, according to Inside Mortgage Finance.

This is a tale of two recoveries. Wealthy purchasers seeking investment properties or vacation homes can draw upon stock market gains to bid up prices. In contrast, most Americans rely upon wages for income and their main assets are their homes. This means a shortage of willing and able buyers and sellers.  As recently described by Neil Irwin in the New York Times, there are more than 2 million “missing” households, those who under normal circumstances are of the right age to purchase homes but are not taking that step.  Many are renting or living with parents and other extended family members. This is likely because unemployment is still high, wages are low, and those with jobs feel less secure and are burdened by debt.

Meanwhile, the shortage of sellers stems from the fact that about 9 million households are still deeply underwater on their mortgages (owing more on their home loan than their property is worth). Thus many people cannot sell without facing a loss.

YUP: Are there still problems with bank lending practices and if so what are they? Do we need more regulation or less, in your opinion?

Jennifer Taub

Jennifer Taub

JT: Banks and bankers behave badly when there are incentives—including competitive pressures—to do so. Ideally, consumer protection regulation acts as a counterweight. Sensible regulation creates a level-playing field so that responsible lenders are not at a disadvantage when they avoid abusive and deceptive practices that are profitable to them in the short run, yet harm consumers and society in the long run.

There are incentives for banks to return to high-risk mortgage lending. Most of the pick-up in home loans we saw in recent years was due to an extraordinary level of mortgage refinancings. With interest rates now rising, refinancings have dropped off. With the decline in volume, we should be concerned that originators will once again push predatory mortgages and unreasonably relax underwriting standards.

There are also significant problems with payday loans—money lent in advance of the borrower’s paycheck. More than 12 million Americans use payday loans. At a March hearing conducted by the Consumer Financial Protection Bureau, experts revealed that payday loans are not really short-term in nature and can turn into a debt trap. Many large banks are now backing away from offering these or providing financing to payday lenders. However these fringe lenders are still flourishing.

Proponents of payday loans suggest restricting them will hurt those Americans who have little other sources for credit. A good alternative might be postal banking as suggested by Professor Mehrsa Baradaran. This would involve the U.S. Postal Service taking deposits, making small loans, and providing bill payment services.

YUP: Do the conditions that caused the prior market meltdown still linger and are we still vulnerable to a similar financial crisis?

JT: Unfortunately, yes. In 2009 Federal Reserve chairman Ben Bernanke defended the multi-trillion-dollar bailouts, explaining that “it wasn’t to help the big firms that we intervened. . . . When the elephant falls down, all the grass gets crushed as well.” Today, the elephants are larger than ever, and the grass is still crushed.

The top banks are bigger than they were before the crisis, and they still borrow excessively in the short-term and overnight markets to purchase risky securities, leaving them vulnerable to runs. The Dodd-Frank Act provided the regulators plenty of tools to prevent another meltdown. So far, the modest improvements to the safety of the system are encouraging, but woefully inadequate.


Read an excerpt of Other People’s Houses on Salon


YUP: What should be done?

JT: It’s time now for more bold action, such as the 21st Century Glass-Steagall Act sponsored by Senators Elizabeth Warren, John McCain, Maria Cantwell, and Angus King. We should also reduce banks’ dependence on short-term wholesale funding. In addition, we should create a pre-paid risk fund to finance the “orderly resolution” process created under Dodd-Frank, so that the banks themselves have to front the resolution process instead of the taxpayers. Such an upfront assessment was included when Dodd-Frank was in progress, but, under pressure from the banks, it was removed before the law was enacted.

YUP: How did we get to this point? Was this just a one-off market failure for 2008 or an indication of a larger pattern with banks and financial institutions? 

JT: The 2008 meltdown was not a one-off market failure; it was a repeat performance, a more severe relapse of the same underlying disease that caused the S&L debacle in the 1980s.  In both cases the same reckless banks, operating under different names, failed, while the same lax regulators overlooked fraud and abuse. Furthermore, today as the legal problems plaguing JPMorgan Chase demonstrate, the situation is essentially unchanged.

Though deregulation and desupervision enabled the S&L crisis the subsequent legal reforms failed to eliminate risk to borrowers, lenders, taxpayers, or to the entire system. Instead, risk grew, but through sophisticated financial innovation, it was strategically directed away from Wall Street to homeowners and taxpayers.

We are repeating the cycle. Today, our biggest banks are larger than before the crisis, are still excessively leveraged, are bumbling and behaving badly, sometimes criminally, but with little to no personal accountability. This poor conduct goes well beyond abusive consumer lending practices.  With scandal after scandal, we see that these financial firms are too big and too complex for their own executives to manage and for the government to regulate or prosecute.

The problem is amplified when after a crisis, the strongest survivors swallow up the failing competition along with the target’s troubled corporate cultures and toxic assets. We saw this with JPMorgan Chase and now fresh evidence includes Bank of America’s announcement in late April of this year that it submitted incorrect data to the Fed as part of the annual stress tests. In an accounting error related to sales of bonds inherited from Merrill Lynch, Bank of America overstated its equity capital by $4 billion. The Fed required the bank to suspend a dividend increase and stock buyback plan.


Listen to Jennifer Taub on The Takeaway (starts 28:01)


YUP: While there are headlines about this spike in luxury apartment buildings, there are also statistics that the amount of “underwater houses” is on the rise (an underwater house is a home mortgage with a higher balance outstanding than the market value of the home.) What are the latest statistics on underwater homes: are there improvements?

JT: Despite some improvement in home prices, many millions of homeowners in America remain deeply underwater on their mortgages. These include families who purchased homes at inflated values or who were encouraged to take on more debt as property values rose during the bubble. Collectively, the negative home equity holds back our nation’s economic recovery.

According to RealtyTrac, more than 9 million homes have mortgages that are “seriously underwater” meaning the borrower owes at least 25% more on the loan than the home’s estimated market value. This is about 17% of all properties with mortgages. While this is an improvement from early 2012 when 12.8 million homes were deeply underwater, the housing market and the economy are stagnating in part due to this problem. By comparison, CoreLogic calculates that 6.5 million of mortgaged homes are underwater, down from an estimated 11.2 million in 2010.

YUP: At your book’s core is the story of Nobelman v. American Savings Bank.  In that case, the U.S. Supreme Court decided that even filing for bankruptcy would not provide any help for underwater homeowners: that the mortgage loan principal could not be reduced.  Is this still the status quo? Are there any indications that policy might change here to help distressed homeowners and stave off foreclosures?

JT: Our nation’s bankruptcy system is designed to offer a fresh start to borrowers who owe more than they own or who cannot make ends meet. Before the Nobelman decision in 1993, struggling homeowners in more than twenty states could turn to bankruptcy courts to save their homes. An underwater borrower could reduce the outstanding mortgage loan balance to the sunken value of their home. And, knowing this relief was available, lenders were more willing to voluntarily restructure mortgage loans.

The Nobelman decision is still the law of the land. This means that middle class homeowners are singled-out. Whereas the amount owed on a boat or vacation home can be reduced in bankruptcy, a purchase mortgage on a principal residence cannot. There is a solution— a simple amendment to the Bankruptcy Code. Such a proposal passed in the House in 2009, but over industry opposition and without support from the Obama Treasury department this important amendment failed in the Senate.

This simple amendment should have been included in the Bush bailout legislation in 2008. On the campaign trail, then-candidate Barack Obama had vocally supported changing “our bankruptcy laws to make it easier for families to stay in their homes” and to remove what he called a “Washington loophole” that “if you’re a family that owns one house, bankruptcy judges are actually barred from helping you keep a roof over your head by writing down the value of your mortgage.” However, in late September of 2008, while the bailout legislation stalled, he suddenly reversed his position encouraging the exclusion of bankruptcy reform from the legislation.

YUP: In your book, you point to the increasingly popular view that the 2008 meltdown in the housing market was the fault of borrowers. That these “subprime” borrowers had no business taking out loans for homes they could not afford, and that was the reason for the bursting of the housing bubble. Is that a fair assessment, in your view?


Read Joe Nocera’s op-ed “Bankrupt Housing Policy” in the New York Times.


JT: Subprime mortgage borrowers have been unfairly scapegoated. If every single subprime mortgage had defaulted, as author and former investment banker Nomi Prins has noted, the total unpaid principal would have been a fraction of what was committed by the Fed, Treasury, and FDIC in the financial crisis.

It is not credible to blame homeowners alone for the crisis. True, some homeowners participated in fraud, and others were simply unrealistic or were speculating that housing prices would continue to rise.  However, a much larger number were victims either of abusive lending practices or of the housing bubble and burst that diminished their home values and retirement savings.

It was the desire of banks to make profitable trades, and hedge funds and other large institutions to speculate in mortgage-linked securities that drove the production of unsafe mortgage loans and brought down the system. It was the side bets, made knowingly by some and unknowingly by others, that put far more at risk than the total value of all the subprime mortgages.

The most influential bankers testified under oath that they alone should take the blame. Bank of America CEO Brian Moynihan told the Financial Crisis Inquiry Commission: “Over the course of the crisis, we, as an industry, caused a lot of damage. Never has it been clearer how poor business judgments we have made have affected Main Street.” In addition, JPMorgan Chase CEO Jamie Dimon told the Commission, “I blame the management teams 100% . . .and no one else.”

YUP: Is there anything the average citizen can do to help bring about change to protect themselves from predatory lending and under-regulated banks?

JT: Consumers concerned about a predatory or misleading banking practices can contact the Consumer Financial Protection Bureau, which was created under Dodd-Frank. They can seek assistance from an attorney with consumer law expertise.  Those frustrated with too big to fail banks can also move their savings to a smaller institution. For example there are nearly 7,000 community banks in about 50,000 locations in this country as well as thousands of credit unions.

Consumers should share their stories with and express their concerns to their state and federal representatives. Phone calls, emails and letters matter greatly. To stay informed on legislation and policy matters, they can also follow the work of advocacy organizations including Americans for Financial Reform, Better Markets, and The Center for Responsible Lending.


Jennifer Taub is an associate professor at Vermont Law School, where she teaches courses on contracts, corporations, securities regulation, and white-collar crime. Formerly she was an associate general counsel at Fidelity Investments. She frequently speaks and writes about the financial crisis of 2008. She lives in Northampton, MA.

Adrian Goldsworthy Documents the Lives of the Greatest Romans: Caesar, Antony, and now Augustus

augustusAdrian Goldsworthy, an award-winning biographer and historian, has brought ancient Rome to life through a trilogy of biographies of the leaders of the greatest empire of all time. In Caesar: Life of a Colossus and Antony and Cleopatra, Goldsworthy cut through the traditional stories told of these well-known figures, exposing the complexity of their political maneuvers and providing more human portraits to balance the legends. His new book, Augustus: First Emperor of Rome, to be released this August, holds up the same revealing lens to a character who is less well-remembered, but equally—if not more so—influential in the history of Rome.

Yale University Press: Although Augustus is far less well-known than his great uncle, Julius Caesar, you find that he was actually a much more compelling figure. Why is that so?

Adrian Goldsworthy: Julius Caesar’s career was conventional until he reached middle age. But Augustus broke all the rules and was a master of re-inventing himself. There are more surviving images of him than anyone else in the ancient world. Augustus boasted that he had given the Romans peace after decades of chaos and violence, and yet at the same time he presided over the most intensive period of Roman imperial expansion.

YUP: One of the fascinating overarching themes of your book is how Augustus transformed the Roman Republic into the Roman Empire. What were his tactics and why were they so effective? Why is his reign of such immense historical importance?

AG: Augustus claimed to have restored the res publica—the state—but in reality he monopolized military power and was a military dictator in all but name. On the other hand he worked hard to justify his supremacy, spending more than half his reign touring the far-flung provinces, and, wherever he was, devoting a great deal of attention to petitioners who came to him from all over the world. The new system was less democratic but it worked, not only during his lifetime but also in the centuries to follow, when the empire was more stable and prosperous than ever before.


Adrian Goldsworthy is a leading historian of the ancient world and author of acclaimed biographies of Julius Caesar and Antony and Cleopatra among many other books. He lectures widely and consults on historical documentaries produced by the History Channel, National Geographic, and the BBC. He lives in the Vale of Glamorgan, UK.

Yale Press Podcast: Author Jennifer Michael Hecht on Suicide

Stay: A History of Suicide and the Philosophies Against ItThere is a certain myth to the idea that most suicides occur around the holidays; in fact, it’s usually in spring and summer that see the highest rates of this irretrievable act. In our latest episode of the Yale Press Podcast, Jennifer Michael Hecht, author of Stay: A History of Suicide and the Philosophies Against Itspeaks poignantly to the value of  recovering the most powerful historical and contemporary arguments against the act.  The book, based on research as well as personal experience — has been well received by critics: it’s what David Brooks has called “eloquent and affecting” in his New York Times column, what Maria Popova claimed as “more than a must-read — it’s a cultural necessity” on Brain Pickings, and what Andrew Sullivan has treated readers to with a series of videos with an Ask Anything series with Hecht on The Dish.

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Listen to Jennifer Michael Hecht on the Yale Press Podcast on iTunesU!

As we close our #YUPapr conversations this month about “Ancient Texts, Modern Beliefs”, Hecht‘s argument importantly shapes how we have perceived our own humanity as an object of faith and community, and for our modern society and its set of beliefs, the message is clear: don’t go, stay.