John Allison has rarely been timid about expressing his opinions, especially when the discussion involves the role of government in people's daily lives. His message is always loud and clear: more government equals bad government.
When he was the chairman and chief executive of BB&T, Allison rarely minced words on subjects such as eminent domain and affordable housing. As an ardent supporter of the writer/philosopher Ayn Rand, he passionately defends individual liberties and free markets.
You could tell many times in the past decade Allison wanted to chew out banking regulators and politicians for what he viewed as stupid policy. But he had to show professional restraint, recognizing that BB&T could have suffered if he overstepped his bounds.
Allison told me about his interest in writing a book on the financial crisis, including the causes, just before he retired from the Winston-Salem, N.C., company in late 2008. I have been looking forward to this book ever since, realizing that Allison could fully express his views once he was no longer directly affiliated with BB&T. He retired as BB&T's chairman at the end of 2009, but remains on its board.
His book, "The Financial Crisis and the Free Market Cure," delivers on expectations that Allison would continue to heavily blame pols for the panic of 2008 and the lingering economic malaise. The tome reads much like a lecture, albeit a presentation by an executive with firsthand knowledge of the topic. It is a vigorous defense of free markets.
At times Allison masterfully explains complex economic concepts in ways that those outside of financial services can comprehend. Alternately, he also invokes his inner Holden Caulfield, using the book to rant about the "crony capitalists" who nearly destroyed banking.
Government absorbs the lion's share of his rebukes. He faults, in order, the Federal Reserve Board, the Federal Deposit Insurance Corp., Fannie Mae and Freddie Mac and the Securities and Exchange Commission for "destructive mismanagement" of the economy.
Who were the primary culprits behind the 2008 crisis? Fed Chairman Ben Bernanke, then-Federal Reserve Bank of New York Tim Geithner, Rep. Barney Frank, D-Mass., and Sen. Chris Dodd, D-Conn., he writes.
His so-called crony capitalists include Goldman Sachs, Citigroup and the now-defunct Countrywide. Allison heaps scorn on those companies for seeking "special favors for themselves." The government has rescued Citi three times since 1970, with the company "becoming bigger and worse" every time, he complains.
Regulators "are not visionary, big-picture thinkers," he adds. "The top regulators are political appointees. The rest are lifelong government bureaucrats."
What I found most interesting was Allison's efforts to determine how much blame financial institutions deserve. There seems to be a great deal of soul-searching throughout the book, reflecting a level of self-reflection shared with scores of bank executives.
At various points, Allison admits that BB&T acted against its better judgment in the lead-up to the financial crisis, based on fears of losing ground to competitors, whether they were large financial institutions or community banks.
Still, he is quick to blame regulators for creating an environment where such risks were necessary. The Fed "created a false sense of security that fooled many financial institutions," Allison asserts.
"In the back of my mind, I knew that the housing market should have been correcting all along," he continues. "The knowledge that government policymakers could act in an aggressive manner to save the housing market made us significantly less willing to act to reduce risk."