Devils in the Details

Financial journalist Bethany McLean, Class of 1992
Financial journalist Bethany McLean '92 received a 2011 Williams Bicentennial Medal in September. Photo by Steve Woit.

A betrayal of responsibility and a betrayal of possibility. That’s how financial journalist Bethany McLean ’92, in a 2005 C-Span interview, described her understanding of how corporate culture in America had

become “corrupted by this get-rich-quick notion: Make your quarterly earnings estimates, get the stock to go higher, get your options and the money and cash out.”

Reflecting on those comments today, McLean, who in September received a 2011 Williams Bicentennial Medal for achievement in any field of endeavor, says she “wasn’t cynical enough.”

As she argues in her latest book “All the Devils Are Here: The Hidden History of the Financial Crisis,” the 2008 financial crisis is absolutely about those betrayals. But the question she’s grappling with in what promises to be a definitive history of good intentions gone wrong is: “What does it mean that the market has failed?”

The book, co-authored with Peter Nocera of The New York Times, demonstrates in devastating detail that by 2006 Wall Street had begun inventing ways to make money by betting against the mortgage market. Perhaps the biggest corruption of all, McLean says, is “people all thinking the same way.” By that she means there was an almost cult-like belief in the market. “Everybody believed the market would not permit certain things to happen because the market is all-knowing,” she says. “It’s so steeped in the business culture, and there’s an attitude of, well, you’re stupid of you don’t realize this is the way it works.”

McLean first gained notice with a March 2001 article in Fortune magazine describing the high-flying Enron as a black box that few understood. She was the first journalist to question how Enron made its money. Three years later, she and Nocera, then an editor at Fortune, and investigative reporter Peter Elkind published “The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron,” which was made into an Academy Award-nominated documentary. McLean went on to become a contributing editor at Vanity Fair, where she continues to write about financial matters.

Read more about Bethany McLean in the September 2011 Williams Alumni Review. (For the text-only version, click here.)