In the annals of unconvincing excuses, McGraw Hill’s stated reason for dropping Barry Ritholtz’s book comes pretty high up the list:
McGraw Hill spokesman Steven Weiss this afternoon said the publisher dropped the book because of a conflict with Ritholtz over editing, not because of his criticism of S&P. "The material needed extensive corroboration across a range of topics. We could not agree on unified approach with the author for resolving the issues," Weiss said.
This just doesn’t have credibility. Ritholtz is a blogger. He documents every single source, obsessively, at the end of every blog entry he writes. Indeed, he originally submitted a full 90 pages of sources to McGraw Hill to include in the book, which the publisher decided not to include on the grounds that they were "redundant and unnecessary". But if they wanted "extensive corroboration", that long list of sources would be a good place to start.
On the other hand, I can’t quite believe that McGraw Hill dropped an entire book — and wrote off what was surely a substantial advance — over this: 620 sober words on the ratings agencies, backed up with footnotes, which are right in line with the conventional wisdom on the subject, and which are buried in Chapter 14 of the book.
My guess is that this was basically a case of McGraw Hill not having negotiated with Barry Ritholtz before. Sometimes, the chemistry between two sides is so bad that things just deteriorate irreparably; I’m reminded of a striking part of last Sunday’s NYT tick-tock about Merrill Lynch:
Mr. Thain’s point man for the C.D.O. sales alienated a potential buyer, Guggenheim Partners, that had been willing to pay north of $2 billion more in cash than Merrill received.
Wall Street is meant to be all about money: if one buyer is willing to pay $2 billion more than another, that buyer will win the auction. But the messy world of humans all too often messes up such obvious truths.
In the case of Bailout Nation, my feeling is that the publisher never considered Ritholtz to be an adversary until it was too late. The two sides were going back and forth on edits, and Ritholtz was getting increasingly angry — but clearly no one at McGraw Hill realised that. Then, after one too many push-backs, Ritholtz picked up his toys and threw them out of the pram:
At this I drew my line in the sand at this point. My contract gave me FINAL EDIT.
I informed McGraw Hill that at this point, the manuscript was finished, and I was done. It was either “Fill or Kill.” In an email, I gave them until that Friday, to accept or reject the manuscript.
Ritholtz was, I’m sure, within his contractual rights to do this. But McGraw-Hill, which didn’t consider itself even close to signing off on the final manuscript yet — "legal had not even finished reviewing the manuscript at this time," says Ritholtz — at this point was stuck. Ritholtz is nothing if not stubborn, and there was no way that he was going to let them change so much as a comma, now that his line in the sand had been drawn. Faced with such an implacable adversary, they let the book go — and not without some relief, surely, that they wouldn’t need to face angry people from corporate sibling S&P — or, for that matter, Ritholtz himself, who is no mean force to be reckoned with when he turns against you.
Now, none of this explains why McGraw Hill would put out a formal statement saying that Ritholtz’s book "needed extensive corroboration", for all the world as though they were about to embark on some marathon fact-checking process without which the book could never be published. But the history of corporate flackery is full of such mysteries. The real reason the book’s been dropped, I think, is most likely just a matter of chemistry. And in this case the losses to both sides are much lower than $2 billion.