A review of "The End of Wall Street," by veteran Wall Street Journal reporter Roger Lowenstein. The book examines Wall Street's role in the crash and ensuing recession and what it means for the financial system and the country. Lowenstein appears tonight (April 12) at Town Hall Seattle.
“The End of Wall Street”
by Roger Lowenstein
Penguin Press, 364 pp., $27.95
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“The End of Wall Street” is a good book: witty, well-written, heavily researched and often dramatic. But a more accurate title might have been “Mistakes and Misdeeds of American Private Finance Over the Past Few Years and First Attempts to Rectify Them, Which It’s Too Soon to Evaluate.”
That’s not catchy, but “end” is an awfully final word in public affairs; just as America’s connections with Britain haven’t come to an end despite all the grievances in the Declaration of Independence, neither of two widely differing views on Wall Street means business people have ended or should end trading or investing.
There’s View A: Wall Street is an institution that has helped over more than two centuries to build the financial framework of the richest and most powerful country the world has ever seen. It deserves support to go on doing so, despite stumbles.
View B: Wall Street consists of greedy speculators who have enriched themselves by manipulating bits of paper, which they sometimes misunderstood. Most recently, they’ve done it at the expense of millions of people in the U.S. and abroad. These people, sometimes through their own greed or ignorance, have lost or risk losing jobs, homes, savings, visions of a comfortable old age and the means of giving their children a good education.
In a capitalist economy, financiers nevertheless will go on making deals, even if stricter government regulation hampers them. If they flee from Wall Street, they’ll still be much the same people with the same jobs.
Author Roger Lowenstein, veteran of more than a decade on The Wall Street Journal, tries to keep an even hand, but he doesn’t spare criticism.
“Less than a generation after the fall of the Berlin Wall,” he writes. “The United States was compelled to socialize credit and mortgage risk, and even the ownership of banks on a scale that would have made Lenin smile,” an allusion to the leader of the Russian communists who overthrew a moderate government and socialized virtually all of Russia’s industry almost a century ago. “The massive fiscal remedies (applied recently in the U.S.) evidenced both the failure of an ideology and the eclipse of Wall Street’s golden age.”
Wall Streeters may draw cheer from recalling that President Barack Obama’s government wants to sell off to private interests the stocks it has acquired during the recession. Eclipses don’t last long. The weekly Economist calculates that on the March 9 anniversary of a low point in the Standard and Poor index of 500 stocks, the level had risen by almost 70 percent over the past year.