Steve Fraser’s Wall Street: America’s Dream Palace (Yale University Press, 2008) is not so much a history of Wall Street as it is a history of our conflicting visions of the titans of finance. Is Wall Street a parasite that sucks the life blood out of hard-working Americans? Is it an essential part of a vibrant economy and a place where the ordinary American is well served? And who are the denizens of Wall Street? Who are these men who can “make or break”?
Fraser offers up four iconic Wall Street personality types that have vied for dominance in the imagination of the American public over the course of more than two hundred years: the aristocrat, the confidence man, the hero, and the immoralist. These personality types come to life in portraits of such men as William Duer, J. P. Morgan, Jim Fisk, and Jay Gould; they are further fleshed out in fictional characters created by novelists both familiar (Charles Dickens, Theodore Dreiser, Herman Melville) and blissfully forgotten.
Although this book was written for a broad audience (preferably those who took their “word wealth” lessons seriously) and was selected for Bill Moyers’s “Be a More Engaged Citizen” book list, traders and active investors should definitely set aside a couple of hours to read Fraser’s history. For instance, Fraser recounts the many times in American history that the speculator “who lived off the honest earnings of others” was seen as “offensive in the eyes of God.” (p. 144) He introduces us to a moralist who contended that “‘speculating in margins’ was ‘immeasurably worse’ than ordinary gambling because it was more dishonest.” (p. 163) He also exposes the seamy side of Jesse Livermore, the idol of most modern-day traders despite his sad end. “Supremely vulgar—he called Wall Street a ‘giant whorehouse’ and brokers ‘pimps’—he was also cagey, superstitious, and a show-off, flaunting his yellow Rolls Royce, steel yacht, and huge sapphire pinky ring.” (p. 80)
This book is particularly timely in light of the financial crisis and the Madoff scandal. Whether Americans will once again embrace Wall Street as a place where dreams can be fulfilled or whether they will view it with disgust as the burial ground of dashed hopes remains to be seen. But there’s no doubt that the aristocrat, the confidence man, the hero, and the immoralist will soldier on.