Adam Goldstein

The Anatomy of the Mortgage Securitization Crisis

The current crisis in the mortgage securitization industry highlights significant failures in our models of how markets work and our political will, organizational capability, and ideological desire to intervene in markets. This paper shows that one of the main sources of failure has been the lack of a coherent understanding of how these markets came into existence, how tactics and strategies of the principal firms in these markets have evolved over time, and how we ended up with the economic collapse of the main firms. It seeks to provide some insight into these processes by compiling both historical and quantitative data on the emergence and spread of these tactics across the largest investment banks and their principal competitors from the mortgage origination industry. It ends by offering some policy proscriptions based on the analysis.

Revenge of the Managers Labor Cost-Cutting and the Paradoxical Resurgence of Managerialism in the Shareholder Value Era, 1984 to 2001

Institutional changes associated with the rise of shareholder value capitalism have had seemingly contradictory effects on managers and managerialism in the United States economy. Financial critiques of inefficient corporate bureaucracies and the resulting wave of downsizing, mergers, and computerization subjected managers to unprecedented layoffs during the 1980s and 1990s as firms sought to become lean and mean. Yet the proportion of managers and their average compensation continued to increase during this period. How did the rise of anti-managerial investor ideologies and strategies oriented toward reducing companies’ labor costs coincide with increasing numbers of ever more highly paid managerial employees? This article examines the paradoxical relationship between shareholder value and managerialism by analyzing the effects of shareholder value strategies on the growth of managerial employment and managerial earnings in 59 major industries in the U.S. private sector from 1984 to 2001. Results from industry-level dynamic panel models show that layoffs, mergers, computerization, deunionization, and the increasing predominance of publicly traded firms all contributed to broad-based increases in the number of managerial positions and the valuation of managerial labor. Results are generally consistent with David Gordon’s (1996) fat and mean thesis.

The financialization of US higher education

Research on financialization has been constrained by limited suitable measures for cases outside of the for-profit sector. Using the case of US higher education, we consider financialization as bot ...

Pulpit and Press: Denominational Dynamics and the Growth of Religious Magazines in Antebellum America

Religious economies theory, which views religious organizations as akin to single-unit firms competing for adherents in local markets, has three shortcomings that we solve by reconceptualizing religious organizations and developing a new theory of religious mobilization. First, we treat religious organizations as multi-unit entities operating in interdependent markets in a national field. Second, we incorporate insights from social movement theory to challenge the exclusive focus on the impetus to mobilize (competition) by also considering the capacity to do so (resources). Third, we consider competition within organizations as well as between them. To analyze mobilization directly, we study a key religious resource, magazines. We analyze original data covering virtually all faiths and affiliated magazines in antebellum America, a time of great religious ferment. Consistent with our conception of religious organizations, we find that competition played out mostly within a national field. Consistent with resource mobilization theory, we find that the geography of religious mobilization reflected variations in the availability of resources more than variations in the intensity of competitive pressures. Conceiving of religious organizations as translocal movement organizations rather than local firms better accounts for their behavior. Our analysis sheds light on group dynamics in general by revealing how translocal groups in modern societies mobilize and build identity through group media.

Keeping up with the Joneses: How Households Fared in the Era of High Income Inequality and the Housing Price Bubble, 1999–2007:

Sociologists conceptualize lifestyles as structured hierarchically where people seek to emulate those higher up. Growing income inequality in the United States means those at the top bid up the price of valued goods like housing and those in lower groups have struggled to maintain their relative positions. We explore this process in the context of the U.S. housing market from 1999 to 2007 by analyzing over 4,000 residential moves from the Panel Study of Income Dynamics. Houses are the ultimate status symbol. Their size, quality, and location signal to others that one has (or has not) arrived. We show that in areas where income inequality was higher, all movers went deeper into debt and increased their monthly housing costs to live in more desirable neighborhoods. But because people at the top of the income distribution had so much more money, they were able to take on less debt to keep their position in the status queue. Everyone below them who made a move to buy a house took on more debt, particularly in areas with higher income inequality. This evidence suggests that growing inequality implies that those at the top buy the best homes while others struggle to keep pace amid rising housing costs.