Get Reagan off our backs!—translated into layman’s terms, that’s how distinguished economists George Akerlof and Robert Shiller begin Animal Spirits, their inquiry into the role of human psychology in the economy. The small-government, laissez-faire outlook that Reagan helped popularize has severely damaged the financial system. “Now, three decades after the elections of Margaret Thatcher and Ronald Reagan, we see the troubles it can spawn. No limits were set to the excesses of Wall Street. It got wildly drunk. And now the world must face the consequences.” The reader sits back, expecting to see bankers, politicians and free-market economists such as Milton Friedman and Alan Greenspan get taken out to the woodshed.

But the authors take an unexpected detour. Mr. Akerlof, who shared the Nobel Prize in 2001, and Mr. Shiller, who accurately predicted both the dot-com and real estate busts, are too interested in the nuances of scholarly debate to write a rip-roaring polemic. And so the book proceeds more like an engaging, if occasionally dense, primer on macroeconomic theory—at a time when many lay readers have lost faith in conventional economic wisdom. The current financial crisis offers only one of many case studies for the real subject of the book: the unjustly neglected legacy of John Maynard Keynes and his theory that non-economic, irrational motives—what he termed “animal spirits”—play a major role in economic events.

Animal Spirits is a welcome addition to our Hannitized national economic debate, in which anyone who advocates government spending risks being labeled a socialist. Messrs. Akerlof and Shiller are hardly Marxists or even anti-capitalists; they’re well aware of the glories of modern economies: “The average North American, European, or Japanese consumer has a higher standard of living than a medieval king. She eats better; she lives in housing that is much less roomy but much more comfortably heated; her television and radio, at the press of a button, give her better and more varied entertainment; the list goes on.” Where they differ from the Reaganite legacy is in pointing out that capitalism is vulnerable to irrationality. People are not so keenly self-interested as free-market conservatives have assumed.

IN THEIR ACCOUNT of the Great Depression, Messrs. Akerlof and Shiller portray Keynes as the true “centrist,” with actual socialists to his left arguing for the government to take over private enterprise and assign jobs to the unemployed. Meanwhile, critics on the right clung to Adam Smith’s hallowed economic model: They insisted that through balanced budgets and limited government regulation—“as if by an invisible hand”—private markets would create a job for any worker willing to get paid less than he produced.

Keynes thought capitalism productive, but fragile, prey to the “animal spirits” that lead to speculative mania and the inevitable consequence, panic, which in turn leads to joblessness, quaintly described as “involuntary unemployment.” The proper role of government is to temper these excesses—and, in a crisis, stimulate demand using deficit spending.

Bucking the conventional view of Herbert Hoover as villainously inept, the authors laud both Franklin Delano Roosevelt and his Republican predecessor as “heroes of ours.” A primitive understanding of macroeconomics and excessive concern for balanced budgets hampered these two presidents, but each imposed at least some financial reforms and tried some deficit spending. In a judgment that echoes worrisomely at the moment, the authors conclude that Depression-era fiscal policy was insufficiently bold. Because of a lack of will and clout, “Their deficit spending was orders of magnitude short.”

Also surprising is the contention that true Keynesianism was never really tried. According to Messrs. Akerlof and Shiller, Keynes’ followers dumbed down his theory of government spending to make it politically palatable and comprehensible. The neo-Keynesians de-emphasized the centrality of “animal spirits,” transforming Keynes’ mercurial and often irrational economic man into a rational, self-interested automaton.

This simplification made it easier for the free-market conservatives of “New Classical Economics” movement to dismiss the Keynesian model in the 1970s. These conservative economists assumed the primacy of rational self-interest, and that government nonintervention is the surest way to prosperity. For Messrs. Akerlof and Shiller, the ’70s consensus about the superiority of private enterprise has remained essentially unchallenged over the past 30 years—after all, even the relatively liberal Bill Clinton assured us that “the era of big government is over.” Only the economic chaos of the past year has shaken these rusty certitudes.

JUST IN TIME FOR a 21st-century crisis, Messrs. Akerlof and Shiller aim to revive the true Keynesian legacy. Drawing broadly from social science, the authors provide their own “behavioral economic” theory of the five key animal spirits that matter: confidence, fairness, corruption, stories we tell about ourselves and “money illusion,” which means the extent to which one is fooled by inflation. The authors then apply these concepts in analyzing a variety of phenomena, from the peaks and troughs of the real estate market to the persistence of black poverty.

In one intriguing section, they explain why Japan was able to start a national car company, while Argentina failed. Toyota benefited from outsize national self-confidence and a cultural story that emphasized self-reliance, willingness to learn from foreigners and self-sacrifice for the good of the organization. In contrast, the Argentine company, IKA, had no unifying story linking its native employees with its American managers, and suffered from a persistent worker perception of unfairness that led to violent labor unrest, production shortfalls and eventual failure.

Animal Spirits is most compelling when the authors summon all the key behavioral patterns to explain vast, complex phenomena such as the Great Depression. In the crash of 1929, when speculative exuberance and the narrative of a “new era” of continually appreciating stocks suddenly evaporated, technical factors such as central bank protection of the gold standard worsened unemployment. But Messrs. Akerlof and Shiller insist that animal spirits were also of “fundamental importance.” A feeling that the American economy was profoundly unfair emerged, leading to intense labor unrest and the specter of communism—whatever the boneheads on Fox might be saying, genuine socialism’s only real chance in the United States came during this crisis. “Money illusion,” the inability to recognize that prices had plunged by 27 percent, made everyone from Hoover to Roosevelt to unions to industry focus counterproductively on raising real wages in hopes of increasing buying power, rather than stimulating demand to reduce unemployment.

As Keynes pointed out, the fundamental problem was that bankers were too scared to loan, because they thought they would lose their money. And some of the more draconian New Deal measures led businesspeople to worry that the market system would be replaced with a dictatorship, which further depressed their willingness to invest. Since none of the deficit spending was on a scale needed to stimulate demand, self-perpetuating hopelessness set in. Only with the emergency mobilization of World War II did the shattered national mood, and narrative, begin to change.

After touring through this grim history, our contemporary problems, as severe as they may be, don’t look quite so bad. Messrs. Akerlof and Shiller end on a reassuring note: “Yet we are currently not really in a crisis for capitalism. We must merely recognize that capitalism must live within certain rules.” And we must take into account that irrational behavior has a real effect on demand, necessitating government intervention.

Animal Spirits touches on some arcane corners that will be of interest primarily to specialists. But mostly it’s aimed squarely at the general reader, and rightly so: Macroeconomics is now everybody’s business—the banks are playing with our money.

Andrew Rosenblum has written for Mother Jones, Popular Science, Slate and Jazz at Lincoln Center Radio. He can be reached at books@observer.com.

Different year, different boom, same Cassandra.

Robert Shiller, the Yale economist who borrowed Alan Greenspan’s phrase “irrational exuberance” for the title of a 2000 book predicting the collapse of the dot-com bubble due to fatally flawed “boom thinking,” has applied the same theory to the short-lived, 85 percent run-up in real estate prices between 1997 and 2006. Repeatedly invoking the Great Depression, he argues that as a corrective, policy makers need to “think and act on the scale of New Deal-era reformers.”

Mr. Shiller intends the reforms not to shore up home or equity prices, but rather to cushion the blow of the recessionary hammer brought down by the bust—and also to minimize disillusionment with the financial system. The idea of invoking the Depression and the rise of fascism (and Eleanor Roosevelt trekking through the D.C. mud in 1933 to placate a communist-inspired militia) may strike some readers as alarmist, but Mr. Shiller’s prognostications and reform package deserve careful consideration—after all, he’s been right before.

The Subprime Solution, his postmortem on irrational exuberance in the real estate market, is superb, even for general-interest readers otherwise confused by the whole mess. Though his introduction reads a bit like an arid position paper, his insistence on the fundamentally psychological, rather than economic, basis of the boom is supple and fascinating.

The over-valuation of real estate was brought on, he argues, by a “contagion” of bad thinking: Americans as a whole became convinced that real estate fundamentals such as personal income, the cost of building materials and the ratio of home values to rent no longer mattered. Repeated endlessly, the “real estate myth” of homes as an asset destined to appreciate indefinitely due to economic growth, scarce land and a swelling population became a truism, even though it was wrong—as we’re all finding out now.

As Exhibit A, Mr. Shiller includes an expanded version of a key chart that he created for the second edition of Irrational Exuberance. The chart tracks the real value of a typical American house from the 19th century to the present—in comparison with population size, building costs and interest rates. While the other factors appreciated moderately over the century, home prices exploded in 1997, like a “rocket taking off.” In other words, home prices took off due to the psychological contagion of boom thinking, rather than for any economic reason. In a passage perhaps most shocking to those of us blinded by the real estate myth, Mr. Shiller points out that typical homeowners grossly overestimate the real appreciation in home value by failing to adjust for inflation: “We get the false impression that homes have been a spectacular investment when in fact their increase in value ... even over many decades, would generally have been—at least until the recent housing boom—nil.” Nil!

IN ADDITION TO emphasizing the crooked timber of human psychology during the bubble, Mr. Shiller has an insightful sociological observation to make. He worries that the emphasis on quick fortunes during the tech and real estate booms has eroded the Protestant work ethic. Instead of valuing how well a person does his or her job, whether it’s plumbing or corporate governance, Americans now tend to admire wealth accrued by any means necessary. According to boom thinking, a person who spent the past 15 years working steadily at a job rather than riding the NASDAQ or flipping condos isn’t admirable—he’s kind of a loser. Why settle for laboring at a calling when you can watch your net worth double merely by sitting in your house? Or so went the conventional wisdom through 2006.

Along with devaluing work in favor of wealth, the real estate boom caused and was fueled by a decline in lending standards, particularly where unsophisticated low-income borrowers are concerned. To protect these unfortunate victims from ethically challenged lenders and their own bad judgment, and because collateral damage from foreclosures, loss of equity, huge write-downs and bank failures has sinister knock-on effects in the world economy, Mr. Shiller argues for his “subprime solution”—a broad package of short and long-term bailouts and reforms. He freely admits that bailouts are unfair to prudent borrowers and lenders, but suggests that the overall threat to the economy is too great to for us to cling to laissez-faire principle.

As a form of intensive care to those on the edge of foreclosure, Mr. Shiller favors the formation of an agency patterned on the Depression-era Home Owner’s Loan Corporation (HOLC). His new HOLC would loan money to troubled lenders on the condition that they offer mortgages on more stable terms. For example, Roosevelt’s HOLC insisted that any new mortgages be 15 years in duration, and have fixed-rate, monthly payments, with no large sum due at maturity. Mr. Shiller also suggests that we be ready to fund more tax rebates.

HIS LONGER-TERM PACKAGE of reforms reads like an extended wish list: He wants the government to subsidize financial planning for lower-income consumers, who generally receive only self-interested advice from biased sources like realtors or stockbrokers; a financial products consumer “safety” watchdog, and default mortgage conventions that make safe, conservative terms standard; improved electronic disclosure by finance companies so that investors can see the “guts” of mortgage-backed securities; and home-equity and livelihood insurance, with benefits perhaps formulated with the help of a national database of fine-grain details about each citizen’s financial state.

Mr. Shiller believes that better capitalization of the housing futures market (which he helped develop) would allow investors to express skepticism about future bubbles, and he would like to see federal debt indexed to G.D.P. Lastly, in what he admits would be a “revolutionary step,” he’d like to see the U.S. follow the lead of Chile and change to an inflation-adjusted unit of exchange, helping people to see money in real terms.

Given Mr. Shiller’s demonstrated ability to cut through the ocean of self-justifying nonsense in the area of economic forecasting, we have to accept that the consequences of the real estate boom and bust may be every bit as dire as he thinks. But if he’s going to agitate for dramatic changes—he cites the Marshall Plan as a precursor—he needs to better explain why the consequences of inaction will be calamitous. They may be obvious to him, but to the man on the street they’re not. Robert Shiller knows full well that his readers are prone to irrational exuberance—his book would have been even better had he spent more time showing why it’s too late to hope that prosperity is just around the corner.

Andrew Rosenblum’s writing has appeared in Mother Jones, Popular Science, Slate and Jazz at Lincoln Center Radio. He can be reached at books@observer.com.

By setting his new novel in the recent past—just as he did in Pattern Recognition (2003)—William Gibson once again suggests that post-9/11 international intrigue has become more bizarre than any futuristic world his famed sci-fi imagination might invent. Spook Country begins in early 2006 and presents the entire globe as a playground for agents with unknown loyalties who operate beyond legal accountability.

Mr. Gibson makes pointed use of the roughly $12 billion in cash (estimated weight: 363 tons) that the U.S. government airlifted to sticky-fingered officials in Iraq between 2003 and 2004, and for which it still cannot properly account. Three groups of Manhattan- and L.A.-based characters converge on the trail of a mysterious shipping container—contents unknown—that C.I.A.-controlled pirates have intercepted and then lost. This frothy brew leads to all the pleasures of a politically charged thriller, including geek-pleasing feats of technological prowess and an ending that neatly ties up all loose ends.

But Mr. Gibson loses touch with his loftier political themes. He becomes engrossed, instead, in recounting the glories of cool hotels, consumer electronics and awesome cars. For example, the mystical Cuban operative Tito, adept in systema, the Russian martial art, is ordered to stage an information delivery in Union Square—after which he’s to “Run for the W, the hotel on the corner of Park and Seventeenth.” After all, what martial artist worth his Adidas GSG9s would be caught dead escaping through the kitchen of the Union Square McDonald’s?

Similarly, the rock star-turned-journalist Hollis Henry cruises with her associates through Hollywood in a Brabus Maybach; they stay in hotels like the Mondrian and the Chateau Marmont, and meet for drinks at the Skybar (accurately presented as passé). Luxury certainly provides a colorful background for intrigue, as countless thriller writers from Ian Fleming on have observed. It’s just that in Spook Country, the background too often obscures the foreground: Mr. Gibson sometimes seems like he would be happier guest-editing GQ than contemplating the ruthlessness of war profiteers driven mad by greed and paranoia.

The one gritty exception to the ceaseless stream of brand-spouting comes in the relationship between the painkiller-addicted translator Milgrim and his captor, a sadistic military contractor, who are holed up together in the New Yorker Hotel and occasionally venture out to Gray’s Papaya to muse darkly about the Frankfurt School over hot dogs. (Milgrim does manage to steal a stylish coat—a Paul Stuart). Though intended to demonstrate the ruthlessness of freelance mercenaries, their story comes off as a bit PG-13, particularly in comparison with the horrific fate of many real-life military contractors in Iraq.

Spook Country is exciting and occasionally quite funny; most thriller writers would be proud to have written it. But from someone as talented as the author of Neuromancer (1984)—in which he imagined our panoptic, cyber-pharmacological present—this vision of war profiteering isn’t quite frightening enough. It’s as if William Gibson couldn’t get his Maybach out of fourth gear.

Andrew Rosenblum’s writing has appeared in Mother Jones, Slate and Los Angeles magazine.

Back when he was an investment banker at Morgan Stanley, Jonathan A. Knee got performance reviews that praised his knowledge and energy, but warned that his “straightforward, no-nonsense style” could “sometimes be too blunt and rub people the wrong way.” On the evidence of his memoir, The Accidental Investment Banker, he hasn’t changed a bit.

Mr. Knee has written three different books in one, which makes for some rough edges but also for an informative, behind-the-scenes account of a secretive business. His book is at once a highly critical industry history, a memoir of a disappointing professional sojourn and the office-politics equivalent of the “nuclear option,” featuring relentlessly candid appraisals of his prominent former co-workers.

The eagerness to dish helps Mr. Knee in creating an engaging, you-are-there sense of what investment bankers actually do during those long hours at the office. Corporate finance “is, fundamentally, a sales job,” he insists, in which the banker sells strategic advice, as well as access to the bank’s resources in financing deals. When wooing prospective clients, bankers compile “pitch books,” fat tomes that are “mostly filled with pages containing concise but ambiguous bullet points (to allow for plausible deniability if the client clearly disagrees with the point you meant to make) and cheesy graphical representations.” Most potential customers hate the fluff-filled pitch books but keep taking the meetings anyway, in the hopes of discovering an original, practical idea. For Mr. Knee, the thrill of investment banking lies in providing genuinely valuable advice to a powerful corporate decision-maker.

As a model of what an investment banker should be, Mr. Knee lauds the example of Sidney Weinberg, who led Goldman Sachs from 1930 to 1969 and insisted on the “semipublic” nature of corporate governance. A banker was to consider the well-being of society, the financial markets and the client, not simply the firm’s coffers. These ethical scruples meant taking on new clients cautiously, and rejecting ventures thought to lack redeeming social value, such as gambling companies and hostile-takeover bids.

Mr. Knee argues that Weinberg’s conservatism was in fact a form of enlightened self-interest. During the Internet boom, bankers felt pressured to do as many deals as possible, irrespective of quality. Celebrity-seeking bankers behaved increasingly like lawyers, advising clients on what could be done legally rather than what should be done to achieve stable, long-term profitability. Since the tech bust occurred shortly after large commercial banks received government permission to enter the securities-underwriting business, the “pure” investment banks suddenly faced mega-capitalized new competition at a time of damaged credibility. While it’s hard to believe that resourceful executives won’t be able to find sober, independent advisors one way or another, Mr. Knee makes a persuasive case that traditional investment bankers can no longer play that role.

Concerned about ethical and structural changes in the industry, he also remains angry at how the firms treated him. After a few strong years at Goldman, Mr. Knee bumped up against what he perceived to be an anti-Semitic glass ceiling (although he concedes that the problem has improved since the company’s I.P.O. in 1999). Though the Goldman founders, and the saintly Weinberg, were Jewish (as Pat Buchanan would be quick to remind you), and though the company has had Jewish employees for years, almost all of the I.B.S.’s—the elite cadre of senior bankers that served as the sales-oriented public face of the firm—were blue-eyed, blond, male Gentiles. “Indeed, one could be forgiven for confusing a photograph from an IBS retreat in the mid-1990’s with that of a German Olympic swimming team,” Mr. Knee writes acidly.

Frustrated at Goldman, Mr. Knee made what he considered a step down in the investment-banking hierarchy to go to Morgan Stanley in 1998. He re-established himself as a big earner in publishing, only to be slowly edged out in a post-bust turf war waged by a rival banker named Chris Harland. Mr. Knee casts Mr. Harland as an inveterate survivor who managed to dance away from accountability for Morgan’s massive telecom losses.

Mr. Knee pulls no punches when recounting the jockeying and foibles of upper management, either. He depicts Pete Kiernan, one of his former Goldman bosses, as an amiable underachiever more interested in cultivating his interoffice popularity than doing the hard work of picking up the phone to solicit new business. He describes ex-Goldman C.E.O. (and current U.S. Treasury Secretary) Henry Paulson in a Palo Alto restaurant in 1999 gushing about the online grocer Webvan, which would file for bankruptcy two years later in spite of a Goldman-backed I.P.O. and $100 million in the bank’s own money. Former Morgan Stanley head Joe Perella comes off as a capable leader and brilliant rainmaker, and also as a self-absorbed egomaniac: He once insisted in the middle of a meeting that Mr. Knee follow him to the bathroom so that the senior banker could move his bowels as the two continued talking; Mr. Perella’s associate Terry Meguid then entered the stall next-door and joined the conversation. (No word on whether anyone thought to bring coffee and a fruit plate.)

Always captivating, the dishing can become gratuitous. Demonstrating that intense competition for talent during the 1990’s led to unprecedented tolerance of employee misconduct, Mr. Knee recounts the saga of a senior banker named Bob “Mike Tyson” Kitts (so nicknamed for biting the ear of an analyst during a fight). Mr. Kitts wanted to promote his mistress, Elena Drill, to an analyst position for which she was unqualified, leaving his operations chief, Lauren Bessette, torn between loyalty to her boss and to her firm (she ultimately chose the latter). In a macabre twist, both women died shortly thereafter: Bessette was killed in an airplane crash with her sister and John F. Kennedy Jr.; Drill was slain by a different boyfriend in an apparent murder-suicide. Mr. Kitts had nothing to do with these deaths, but the body count rather unfairly implies guilt by association. Then again, what better way to glamorize a memoir than by name-checking the Kennedys?

The score-settling can be purely vengeful, and will undoubtedly cost the Knee family some holiday gift baskets this year. It also makes for a book refreshingly free of mealy-mouthed deference to the powerful. Too bad, though, that Jonathan Knee’s will-to-gossip sometimes overwhelms his more subtly damning industry critique.

Andrew Rosenblum is a writer whose work has appeared in Mother Jones, Slate and Los Angeles magazine.

Back when he was an investment banker at Morgan Stanley, Jonathan A. Knee got performance reviews that praised his knowledge and energy, but warned that his “straightforward, no-nonsense style” could “sometimes be too blunt and rub people the wrong way.” On the evidence of his memoir, The Accidental Investment Banker, he hasn’t changed a bit.

Mr. Knee has written three different books in one, which makes for some rough edges but also for an informative, behind-the-scenes account of a secretive business. His book is at once a highly critical industry history, a memoir of a disappointing professional sojourn and the office-politics equivalent of the “nuclear option,” featuring relentlessly candid appraisals of his prominent former co-workers.

The eagerness to dish helps Mr. Knee in creating an engaging, you-are-there sense of what investment bankers actually do during those long hours at the office. Corporate finance “is, fundamentally, a sales job,” he insists, in which the banker sells strategic advice, as well as access to the bank’s resources in financing deals. When wooing prospective clients, bankers compile “pitch books,” fat tomes that are “mostly filled with pages containing concise but ambiguous bullet points (to allow for plausible deniability if the client clearly disagrees with the point you meant to make) and cheesy graphical representations.” Most potential customers hate the fluff-filled pitch books but keep taking the meetings anyway, in the hopes of discovering an original, practical idea. For Mr. Knee, the thrill of investment banking lies in providing genuinely valuable advice to a powerful corporate decision-maker.

As a model of what an investment banker should be, Mr. Knee lauds the example of Sidney Weinberg, who led Goldman Sachs from 1930 to 1969 and insisted on the “semipublic” nature of corporate governance. A banker was to consider the well-being of society, the financial markets and the client, not simply the firm’s coffers. These ethical scruples meant taking on new clients cautiously, and rejecting ventures thought to lack redeeming social value, such as gambling companies and hostile-takeover bids.

Mr. Knee argues that Weinberg’s conservatism was in fact a form of enlightened self-interest. During the Internet boom, bankers felt pressured to do as many deals as possible, irrespective of quality. Celebrity-seeking bankers behaved increasingly like lawyers, advising clients on what could be done legally rather than what should be done to achieve stable, long-term profitability. Since the tech bust occurred shortly after large commercial banks received government permission to enter the securities-underwriting business, the “pure” investment banks suddenly faced mega-capitalized new competition at a time of damaged credibility. While it’s hard to believe that resourceful executives won’t be able to find sober, independent advisors one way or another, Mr. Knee makes a persuasive case that traditional investment bankers can no longer play that role.

Concerned about ethical and structural changes in the industry, he also remains angry at how the firms treated him. After a few strong years at Goldman, Mr. Knee bumped up against what he perceived to be an anti-Semitic glass ceiling (although he concedes that the problem has improved since the company’s I.P.O. in 1999). Though the Goldman founders, and the saintly Weinberg, were Jewish (as Pat Buchanan would be quick to remind you), and though the company has had Jewish employees for years, almost all of the I.B.S.’s—the elite cadre of senior bankers that served as the sales-oriented public face of the firm—were blue-eyed, blond, male Gentiles. “Indeed, one could be forgiven for confusing a photograph from an IBS retreat in the mid-1990’s with that of a German Olympic swimming team,” Mr. Knee writes acidly.

Frustrated at Goldman, Mr. Knee made what he considered a step down in the investment-banking hierarchy to go to Morgan Stanley in 1998. He re-established himself as a big earner in publishing, only to be slowly edged out in a post-bust turf war waged by a rival banker named Chris Harland. Mr. Knee casts Mr. Harland as an inveterate survivor who managed to dance away from accountability for Morgan’s massive telecom losses.

Mr. Knee pulls no punches when recounting the jockeying and foibles of upper management, either. He depicts Pete Kiernan, one of his former Goldman bosses, as an amiable underachiever more interested in cultivating his interoffice popularity than doing the hard work of picking up the phone to solicit new business. He describes ex-Goldman C.E.O. (and current U.S. Treasury Secretary) Henry Paulson in a Palo Alto restaurant in 1999 gushing about the online grocer Webvan, which would file for bankruptcy two years later in spite of a Goldman-backed I.P.O. and $100 million in the bank’s own money. Former Morgan Stanley head Joe Perella comes off as a capable leader and brilliant rainmaker, and also as a self-absorbed egomaniac: He once insisted in the middle of a meeting that Mr. Knee follow him to the bathroom so that the senior banker could move his bowels as the two continued talking; Mr. Perella’s associate Terry Meguid then entered the stall next-door and joined the conversation. (No word on whether anyone thought to bring coffee and a fruit plate.)

Always captivating, the dishing can become gratuitous. Demonstrating that intense competition for talent during the 1990’s led to unprecedented tolerance of employee misconduct, Mr. Knee recounts the saga of a senior banker named Bob “Mike Tyson” Kitts (so nicknamed for biting the ear of an analyst during a fight). Mr. Kitts wanted to promote his mistress, Elena Drill, to an analyst position for which she was unqualified, leaving his operations chief, Lauren Bessette, torn between loyalty to her boss and to her firm (she ultimately chose the latter). In a macabre twist, both women died shortly thereafter: Bessette was killed in an airplane crash with her sister and John F. Kennedy Jr.; Drill was slain by a different boyfriend in an apparent murder-suicide. Mr. Kitts had nothing to do with these deaths, but the body count rather unfairly implies guilt by association. Then again, what better way to glamorize a memoir than by name-checking the Kennedys?

The score-settling can be purely vengeful, and will undoubtedly cost the Knee family some holiday gift baskets this year. It also makes for a book refreshingly free of mealy-mouthed deference to the powerful. Too bad, though, that Jonathan Knee’s will-to-gossip sometimes overwhelms his more subtly damning industry critique.

Andrew Rosenblum is a writer whose work has appeared in Mother Jones, Slate and Los Angeles magazine.