Steve Fraser’s ‘Wall Street’ – From the Panic of 1792 to Gordon Gekko and Beyond

Remembering financial crises and how they grew

The roller-coaster history of Wall Street in 200 pages

Wall Street: America’s Dream Palace (Icons of America Series). By Steve Fraser. Series editor: Mark Crispin Miller. Yale University Press, 200 pp., $22.

By Janice Harayda

A few years ago, Yale University Press launched a series of brief histories of what its editors call American “icons” — Fred Astaire, the hamburger, the Marlboro Man. Don’t let the clichéd use of icon put you off: On the evidence of Wall Street, this series has as much to offer as the fine “Penguin Lives” biographical line that it resembles.

In this book Steven Fraser condenses the roller-coaster history of Wall Street into 200 brisk pages that begin with the panic of 1792 and end shortly before the current financial crisis. Each chapter focuses on one of four archetypes in life or art whom Fraser believes have shaped the financial markets and their image — “the aristocrat,” “the confidence man,” “the hero” and “the immoralist.”

This organizing principle isn’t perfect. Some of the archetypes overlap and, because all have existed in every era, Wall Street shuttles back and forth in time. But Fraser’s approach humanizes a story that could have been as dry as the fine print on a prospectus. His chapter on “immoralists” is broad enough to sweep in the railroad magnate Jay Gould, “a living insult to all the Victorian pieties and sentimental illusions that polite society found so necessary to veil its own mercenary ardor,” and Gordon Gekko, the cinematic hero believed to have been inspired partly by the arbitrageur Ivan Boesky.

Wall Street is a chiefly about men. But Fraser nods to the influence of women on the markets by mentioning Edith Wharton and media stars like Abby Joseph Cohen of Goldman Sachs, who has preached against what she calls “FUDD – fear, uncertainty, doubt, despair.” He also shows how socialites helped set the tone for the Gilded Age: “Mrs. Hamilton Fish hosted a party for her friends’ dogs in which the ‘guests’ were presented with diamond necklace party favors and a place of honor at the table was reserved for an ape.” And you thought the swag bags at the Oscars went over the top.

Best line: One describes the aftermath of the Crash of 1929: “Psychic recovery took longer than economic rebirth. A national preoccupation with security and an aversion to risk lasted for a long generation.”

Worst line: The structure of Wall Street fosters narrative discontinuities. Fraser writes of World War I: ”In four years the United States went from being a leading debtor nation to the world’s chief creditor.” He doesn’t follow through and note that the balance shifted back during the Reagan administration, when the U.S. went from being the world’s largest creditor to the world’s largest debtor, although much of Wall Street involves those years. Fraser also says that Richard Whitney, a president of the New York Stock Exchange in the 1930s, belonged to the Harvard’s “Porceleian Club.” He means the Porcellian Club.

Recommendation? A good gift for a serious reader who works in the financial services industry or has a strong interest in the markets.

Caveat lector: On pages 92–93 Fraser deals with “the inherent conflict of interest between commercial and investment banking operations housed with the same enterprise.” Written before the current financial crisis, this section has become outdated by decision by the last two major investing banking firms, Goldman Sachs and Morgan Stanley, to submit to more regulation www.nytimes.com/2008/09/22/business/22bank.html.

Published: April 2008 yalepress.yale.edu/yupbooks/book.asp?isbn=9780300117554

Furthermore: Fraser is a senior lecturer at the University of Pennsylvania who also wrote Every Man a Speculator: A History of Wall Street in American Life.

One-Minute Book Reviews does not accept free books from editors, publishers, authors, agents or others. It is an independent site created by Janice Harayda, an award-winning critic who has been the book columnist for Glamour and the book editor of the Plain Dealer.

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