Payback: The Conspiracy to Destroy Michael Milken and His Financial Revolution

Rating:
Summary: Very interesting, but doesn't live up to its title
Review: I bought this book, looking for a history of Drexel and Milken, and what they did, and what junk bonds were.

I found a defense of Drexel and Milken, and a rebuttal of the charges against them.

Most of the book is a description of their trials, and how they defended, and how the charges were 'put up' by attorney Guilani.

But, I think the book went too far in the last 100 pages. Having run out of things to say about Drexel and Milken, the author diverted his attention to the Savings & Loan scandal, and has the gall to defend Charles Keating, and then go on to defend other S&L 'criminals'. What this has to do with Milken or Drexel is beyond me, and thus only the first 2/3rds of the book lives up to its title.

Also, he never concretes the evidence that there is a conspiracy, only that a top guy in government (who is jealous of Drexel), and Ralph Guilani, (not to mention the government's policies) are against Drexel.

Rating:
Summary: No good deed goes unpunished
Review: Michael Milken, so says David Kelley, has done more to help humanity than Mother Teresa ever did (it'd be interesting to hear what Christopher Hitchens has to say about it). He could be right; Milken's ideas about an overlooked "niche" in corporate paper - the region known as "junk" - turned the staid banking industry on its head, and in the process cleaned house in a number of other industries. MCI and McCaw cellular were created with Milken's help, and put an end to the AT&T monopoly; indeed, many people today are disconnecting their wireline phones as they talk on a cell and surf on a cable modem. T. Boone Pickens was able to bring the oil industry to a more rational level after it overbuilt for the 70's oil crisis. Ted Turner took a little TV concern in Atlanta to a nationwide audience, then went on to start CNN, and today the cable industry is far more interesting than the Big 3 networks.

In the process, Milken made many powerful enemies, who eventually turned to the federal government, and an ambitious prosecutor by the name of Rudolf Giuliani (who wanted to become Mayor of NY, NY) to pay Milken back. Milken's marketable and profitable bonds were known as junk because Standard & Poor's and Moody's services often overlook talent and entrepreneurial vigor in favor of longevity. It was only government interference in the market in the late 80's that brought down the market (by such atrocities as FIRREA); this fact did not stop critics of Savings and Loans from blaming Milken for that fiasco. Fischel explains the major S&L trials, as well as the Milken trial, and finds the government guilty of propping up an industry that was insolvent by 1980, made no sense after Congress bailed it out, and ultimately cost taxpayers more than if Congress had merely let it die in 1980.

Still, the conspiratorial tone is a little much, and Fischel accepts a fool's errand in trying to defend people whose names have become euphemisms for greed. People actually think that the Michael Douglass character in Wall Street, Gordon Gekko, was a real person. It would be worth reading Burton Folsom's _Myth of the Robber Barons_ and understand his differentiation between business entrepreneurs and political entrepreneurs before reading _Payback_.

Rating:
Summary: No good deed goes unpunished
Review: Michael Milken, so says David Kelley, has done more to help humanity than Mother Teresa ever did (it'd be interesting to hear what Christopher Hitchens has to say about it). He could be right; Milken's ideas about an overlooked "niche" in corporate paper - the region known as "junk" - turned the staid banking industry on its head, and in the process cleaned house in a number of other industries. MCI and McCaw cellular were created with Milken's help, and put an end to the AT&T monopoly; indeed, many people today are disconnecting their wireline phones as they talk on a cell and surf on a cable modem. T. Boone Pickens was able to bring the oil industry to a more rational level after it overbuilt for the 70's oil crisis. Ted Turner took a little TV concern in Atlanta to a nationwide audience, then went on to start CNN, and today the cable industry is far more interesting than the Big 3 networks.

In the process, Milken made many powerful enemies, who eventually turned to the federal government, and an ambitious prosecutor by the name of Rudolf Giuliani (who wanted to become Mayor of NY, NY) to pay Milken back. Milken's marketable and profitable bonds were known as junk because Standard & Poor's and Moody's services often overlook talent and entrepreneurial vigor in favor of longevity. It was only government interference in the market in the late 80's that brought down the market (by such atrocities as FIRREA); this fact did not stop critics of Savings and Loans from blaming Milken for that fiasco. Fischel explains the major S&L trials, as well as the Milken trial, and finds the government guilty of propping up an industry that was insolvent by 1980, made no sense after Congress bailed it out, and ultimately cost taxpayers more than if Congress had merely let it die in 1980.

Still, the conspiratorial tone is a little much, and Fischel accepts a fool's errand in trying to defend people whose names have become euphemisms for greed. People actually think that the Michael Douglass character in Wall Street, Gordon Gekko, was a real person. It would be worth reading Burton Folsom's _Myth of the Robber Barons_ and understand his differentiation between business entrepreneurs and political entrepreneurs before reading _Payback_.

Rating:
Summary: Payback: A Must Read!
Review: Mr. Fischel does an excellent job explaining what exactly happened with high-yield financing by Drexel Burham Lambert (Milken) in the 1980's. The book also goes into great detail about how Milkens financing of raiders helped evict the "entrenched" risk averse management of many US companies. These managers filled with anger and evny, join with their former college buddies (such as Nick Brady) to form an unholy alliance and stop Milken, Pickens, Icahn and their ilk. Mr. Fischel also describes in great detail of how a zealous prosectuor named Guiliani stopped at nothing to get Milken, et. al so he could boost his chances at the 1989 mayoral race in NYC. Fischel also speaks of some anti-semitism that might have been behind this. The book doesn't make apologies for most of what transpired on Wall St. in this era. Fischel declares Boesky and Levine to be "crooks" and shows no quarter when it comes to any of the other thieves who profited from insider trading. However, he justifies what Milken did to improve the US economy both then and now. The book also talks about Keating and the S&L problem. A great book, I couldn't put it down!!!

Rating:
Summary: Must read for one who is not afraid of the hurting truth
Review: Payback - the conspiracy to destroy Michael Milken and his financial revolution is an outstanding book that changes your way of thinking about the american dream, the junk bond decade and I recommend it unconditionally to anyone who is willing to have a lot of conventional wisdom and preconceived ideas turned around.

The author starts with a strange question - is there something like too much wealth ? Is it embarassing to earn too much money in a short period of time. Is there something like if you are born like this you must utmost become that ?

This book is a story about a man who I believe was on the way to become the most important financial thinker in our 20th century, a man whou should be seen as a scholar more than as a businessman, in particular because he prooved what scholars before him erected as a hypothesis.

His crime: working unnormally long hours, thinking the impossible paths of financing, not considering the estalished rights of normal banks (which would after him cease to exist) and not bending over to the politicians who turned an industry, that should have been killed in the early 80s into a nightmare of dimensions never heard of before. Milken just helped to open ways to a new wave of shareholder- value-oriented management, and he helped to get the best result out of the S&L legislation, in principle just the way the politicians wanted it - only that they wanted to reverse everything after they had seen what had gone completely wrong,much too late at a much too high cost.

I admit I have always liked Mr Michael Milken, already in the late 80s, when he was convicted, beacause the accusations seemed not plausible. This book shows, that he was sentenced to 3 years in prison (not 10 as one so often reads) for a crime that n-o-b-o-d-y can commit, because it is not a crime. It was just an accusation and a judge who lost control over the PR-work of a selfish State attorney Ralph Guliani. I admit that since reading the book I also admire Mr Milken for his proof, what a man, his wife and chidren can endure.

Read this book just to show reverence to a great man of history who will never surrender, be it to unjustified accusations or to death in form of cancer, and to whom scholars in the next century will look as a magnificent thinker of the last century.

Dr. Rudolf C. King

Rating:
Summary: Good counterweight but author out of his expertise
Review: Watch out when an economist begins talking about law (or, like Posner, a lawyer talking about economics).

Another good book in this general line is Fenton Bailey's "Junk Bond Revolution". Very well written, probably by a ghostwriter.

A useful counterweight to conventional received wisdom, but, keep in mind, that experts are hired mouthpieces, and Alan Greenspan once testified on behalf of Charles Keating.

Rating:
Summary: Good counterweight but author out of his expertise
Review: Watch out when an economist begins talking about law (or, like Posner, a lawyer talking about economics).

Another good book in this general line is Fenton Bailey's "Junk Bond Revolution". Very well written, probably by a ghostwriter.

A useful counterweight to conventional received wisdom, but, keep in mind, that experts are hired mouthpieces, and Alan Greenspan once testified on behalf of Charles Keating.