Before the Fall

As the Dow rises, so does the temptation to repeat our mistakes. In these days of (jobless) recovery, it might be instructive to remember where euphoria and unscrupulous speculation led us just a few short quarters ago. Which makes a few new books—packaged neatly as cautionary tales—unexpectedly timely.

American Sucker, David Denby

Best-Laid Plans: Newly divorced film critic decides to make $1 million on nasdaq. Loses $1 million.

Faulty Reasoning: “Where was it decreed … that writers should not get rich, too?”

Lesson: “It felt like a mild heart attack, but then I chewed a couple of Tums and it went away.” “When it came to investing, intellectuals, it turned out, were no smarter than anyone else.”

Fools Rush In: The Unmaking of AOL Time Warner, Nina Munk

Best-Laid Plans: Two egotists engineer what “may be the biggest train wreck in the history of corporate America.”

Faulty Reasoning: “For Case it was only a matter of time before someone noticed the lack of substance at AOL.”

Lesson: Levin: “I’d make a much better CEO now. I’m more centered. I’m more in touch with the feminine side of myself.”

The Cell Game: Sam Waksal’s Fast Money and False Promises —And the Fate of ImClone’s Cancer Drug, Alex Prud’Homme

Best-Laid Plans: CEO goes to jail, drags down Martha. Faulty Reasoning: His drug would “change cancer medicine. So what if he cut a few corners?”

Lesson: Waksal to Tina Brown: “Do you know how much time one wastes in real life? … Going out to dinner? Trying to get laid?”

Before the Fall