America: Underwater and Sinking

by James B. Lockhart III

The full title of the book – America: Underwater and Sinking, Time to Surface with Lessons Learned – is misleading because it implies that it is an analysis of the current (and dire) financial condition of the United States federal government along with proposed solutions. That analysis does cover roughly 10% of the book, but the remaining 90% is really a memoir of James B. Lockhart III’s early life and time in several important positions: as the head of the Pension Benefit Guaranty Corp., deputy commissioner of Social Security, director of OFHEO and later the Federal Housing Finance Agency, the regulator of Fannie Mae and Freddie Mac. For those interested in a play-by-play account of the actions taken by the federal government in the lead-up to and during the 2008 housing crisis, this book covers a lot of ground. It is obviously self-serving, but fair. (Mr. Lockhart tells us of his mistakes as well as his accomplishments.) It is very well written and documented, which makes it a surprisingly good read, especially for those who follow the U.S. housing market. Besides the accomplishments that he describes in the book, the quality and organization of the writing makes it clear (to me at least) that Mr. Lockhart was an effective administrator. Yet, for those looking for potential solutions to the problems and risks associated with federal government insurance programs and guarantees – pensions, social security, Medicare and residential mortgages – Mr. Lockhart offers only a few suggestions and no comprehensive solutions. That is understandable because these are very tough problems. He is right to point out the U.S. is likely headed for tough times; but I would have liked to have seen more analysis about our current situation and a more complete assessment of the potential solutions and downside risks (and how those might play out over time).

May 21, 2024

Stephen P. Percoco
Lark Research
839 Dewitt Street
Linden, New Jersey 07036
(908) 975-0250