The Best Way to Rob a Bank is to Own One is an important book about one of the most pressing issues facing America, and indeed the world. It is also frustratingly dense and unclear, so close to the trees that the forest barely comes through.

Black was a lawyer for the Federal Home Loan Bank Board and affiliated agencies, with positions including litigation director and vice president and general counsel for the Federal Home Loan Bank of San Francisco. As such, he was a key participant in the Savings and Loan (S&L) crisis of the 1980s and 1990s, with a key role in taking down major players such as Charles Keating and Don R. Dixon. Black's experiences lead him to get a PhD in criminology and coin the term 'control fraud' to describe the behavior of his adversaries. A control fraud is someone who suborns an entire organization, typically the CEO of a business, and uses his power to loot the business for personal gain while leaving the losses as someone else's problem.

The saving and loans sector was in genuine trouble in the early 1980s. Fed Chairman Paul Volcker dramatically raised interest rates to combat inflation, making many S&Ls insolvent as value of their portfolio of fixed rate mortgages declined. The potential losses were in the tens to hundreds of billions of dollars, far outstripping the federal insurance fund backing the S&Ls. The Reagan administration, with its shaky commitment to truth, antiregulation stance, and strong desire to avoid adding another hundred billion or so of deficit to the federal budget in light of their no-tax and spend-anyway plan, decided that the whole industry could grow out of it's problems if regulations were weakened.

The exact details are fairly arcane, but basically, S&Ls got radically more forgiving accounting standards to make them fictionally liquid. Capital reporting requirements were made more forgiving for new S&Ls, letting them push a day of reckoning off into the future. S&Ls were allowed to make much more speculative investments than before, including massive direct investments in speculative real estate development. And finally, the intangible quality of 'reputation' was valued in the hundreds of millions to billions of dollars for insolvent S&Ls, conveniently erasing debts.

The lax regulatory environment let a group of frauds seize control of failing S&Ls and turn them into Ponzi schemes, trading back and forth grossly overvalued commercial properties and junk bonds until the music ran out, hopefully with someone else holding the bag. Control frauds were truly colorful characters. Texan Don R. Dixon had an air force of business jets, a navy of fancy yachts, and an army of prostitutes, which he used to suborn first his own board, and then major politicians. Charles Keating got his start in politics as an anti-pornography crusader (he convinced the Justice Department to devote significant resources to chasing down smut, which meant reduced focus on financial crimes), and moved up to the grandest levels of S&L fraud, including building a ridiculous luxury hotel in Phoenix and threatening Black and his fellow regulators with personal lawsuits.

Political corruption was vital to the whole process. Control frauds had easy access to the deregulation friendly Reagan administration, with political appointees sometimes able to cut out the civil service. Democrats also acted poorly. Four of the five "Keating Five" senators were Democrats, and Speaker Jim Wright was a key ally of the control frauds, having been bought for shockingly cheap political contributions in the range of a few million dollars, which was nothing compared to the billions stolen, and the trillion of dollars in broader economic damage.

Black's broader point is that while control frauds often appear to be legitimate businessmen, they are anything but. Control frauds first aim to expel potential whistleblowers from their organizations, and can easily suborn external auditors and outwit regulators who are often overworked and under-budgeted. The easiest mode of detection is outstanding growth and profitability in excess of industry averages, because companies operated by control frauds are Ponzi schemes and die when they stop growing. It is vital to stop control frauds, because their thefts are massive and systemic, and we're all left holding the bag. Direct victims lose their money, but entire sectors can be shattered by bubbles popping, and even healthy firms can fall. The erosion of social trust is literally priceless.

The law is often inadequate. In an irony so black that only Anish Kapoor is allowed to use it, Black coined the phrase "too big to prosecute" to shame Attorney General Eric Holder into going after the executives responsible for the 2008 banking crisis, and Holder used the phrase as an excuse not to take action. White collar crime is large under-prosecuted, with only the lowest level and stupidest people prosecuted. No federal agency has a chief criminologist, and free market dogma says that reputation damage contains fraud when it clearly does not. Indeed, the entire financial and political system often seems designed to protect fraudsters at the highest levels.

Unfortunately, as much as this book needs to be persuasive, it is so opaquely written that I had to wade through it on sheer grit, and I work for a bank that failed a week ago! I can't imagine the average person making it more than five pages in before giving up.

There has to be a short incisive summary of this book, and even with all the shit that is going on a new public movement around the simple idea that BOSSES GO TO JAIL.

Can we eat just one billionaire?