Americans' investment in Wall Street

Wall Street inspires fawning awe - except when it inspires outraged disgust

Of all the Democratic Party's laments following last year's presidential election, perhaps the most intriguing came from Bruce Reed, president of the Democratic Leadership Council: "Millions of Americans voted against their own interest," Reed argued a few days after George W. Bush won a second term. "An administration whose overriding motive has been to protect the rich was just given a second term by the very people who will suffer the most for it."

Sour grapes, perhaps. But might Reed be onto something? Were middle- and lower-income Americans somehow duped into favoring corporate and Wall Street interests by a president who appealed to their conservative values? By fulfilling their social and religious values, were these voters sacrificing their pocketbooks?

Steven Fraser offers a persuasive alternative in his thoroughly researched and compelling new book "Every Man a Speculator." Fraser has not penned an overtly political work. His aim is far more ambitious: to show how Wall Street has influenced American culture and values over the past two centuries. Yet, Fraser's work offers a simple and useful political insight: In contemporary America, citizens do not necessarily perceive a political trade-off between their cultural values and their economic values, as Reed seems to believe. In fact, the two can go hand in hand.

It hasn't always been that way. A historian of the labor movement, Fraser notes that Wall Street's cultural impact on the United States reflects "deep ambivalence and cultural warfare." Historically, the key conflicts have surrounded the proper relationship between high finance and the government. After all, trading in US national debt first gave life to Wall Street in the late 1700s, and that organic relationship would endure to the present.

Early on, Thomas Jefferson feared that a "moneyed aristocracy" would corrupt the state and undermine the nation's revolutionary principles. Over time, these elites would evolve into the brash robber barons of the late 1800s, the stoic "money trusts" of the pre-Depression years, the discreet Establishment of the post-World War II era, and the market tycoons of the 1980s. And from Cornelius Vanderbilt to J.P. Morgan to Michael Milken, Wall Street's heroes have elicited a nearly fawning awe from the American public - except when they have prompted popular disgust or antimarket backlashes.

Fraser guides readers through these shifts, not just in politics but also in America's cultural battlegrounds: newspapers, novels, poetry, film, radio, and television. Particularly enjoyable are the author's minireviews of books such as Mark Twain's "The Gilded Age" and Tom Wolfe's "The Bonfire of the Vanities," as well as of less famous works that mark the public's intermittent mistrust and adoration of Wall Street.

In entertaining asides, Fraser also answers innumerable pieces of financial-history trivia. Where do the expressions "bull" and "bear" come from? When was the first initial public offering? Where is the "wall" in Wall Street? Fraser even examines popular board games throughout US history to chronicle Wall Street's changing cultural appeal. Recall, for instance, how the objective in Monopoly is not necessarily to get rich but to drive one's opponents into bankruptcy - a fitting purpose for a game developed during the Great Depression.

In most cases, Fraser contends, Wall Street lost the battle for the hearts and minds of America. Initially held up as heroes and saviors, the robber barons later suffered ridicule and disdain. The excesses linked to the Great Depression led to New Deal legislation that sought to curb the Street's power.

But today, we live in the Shareholder Nation, where half the country's households are invested in the market. "Even those multitudes for whom market society has brought worrying insecurity and even grievous loss remain tempted by the dream," concludes the author. In this light, a poor citizen's vote for big business is not a vote against self-interest but a vote of confidence, warranted or not, in the nation's future - and one's own.

In perhaps the ultimate proof (or irony) of this transformation, President Bush's inaugural address in January echoed Roosevelt's "four freedoms" language to promote the partial privatization of one of FDR's signature New Deal programs, Social Security. "By making every citizen an agent of his or her own destiny," the president explained, "we will give our fellow Americans greater freedom from want and fear, and make our society more prosperous and just and equal."

By seeking to reform the welfare state and institutionalize the "ownership society," the Bush administration has not just skillfully cracked America's new cultural code. It may be permanently rewriting it as well.

Carlos Lozada is a Knight-Bagehot fellow in economics and business journalism at Columbia University.

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