Book Review: Wall Street: America’s Dream Palace

Wall Street – America’s Dream Palace.  Steve Fraser.  Yale University Press, New Haven. 2008.

By Jim Miles

With the United States bailout package now through Congress, but still waiting for Monday morning’s financial signals from around the world, Steve Fraser’s extended essay Wall Street – America’s Dream Palace provided an interesting diversion from the many possible realities that may yet arise.  It is a diversion in that it is not a technical book, no need to worry about understanding economic jargon, or even the economy; nor is it a truly historical work although it recounts anecdotes and information that do cover the time span of the stock exchange in New York.  Instead it is somewhat of a sociological review (but again without the jargon normally associated with academic sociologists), a social commentary, an examination of the mythology of the market. It could also be considered an extended metaphor for the manner in which the United States has treated its own citizens and as well as citizens of other countries. 

It is a book, also, that is written out of time.  For all the descriptions provided, stories told, and questions posed for reader’s consideration, it was published before the current disaster unfolding on Wall Street at this moment. Steve Fraser does not put the later part of the story into its current context.   There is no recognition of the potential for near future catastrophe that could have been gleaned from being more aware of the huge debt crisis within the United States ranging from personal debt, through financial debt, to the large public or government debt. There is no sector of the economy that is not affected by this huge debt load, and for Fraser to have missed it – or to have ignored it – indicates that he either did not want to consider it, or that he was not aware of it, even though as early as two or three years ago the alternate media were indicating that the United States carried a huge debt load in all areas that made the country very insecure in its global as well as its domestic finances. 

Had this book been set to be published sometime this month, Fraser would have to significantly alter his last statement wondering “Whether Americans will continue …to find in Wall Street a welcoming place to indulge their romance with risk and dreams of universal abundance remains to be seen.”  There are two sides to this statement – one can be certain that for the average citizen of the United States it is no longer a welcoming place, but raised in a society that values consumerism and monetary greed above all else, the romance and risk will certainly return some day. Today however, the romance and idealistic mythology of the self-made man cleverly manipulating his way to millions has been tossed over by the almost complete anger of the public telling Congress not to bail out the risk takers by using their tax dollars. But Congress did anyway. That part of the mythology remains untarnished, exposing once again the “political corruption and crony capitalism” that extends back to the 1860s if not further.  

The book is divided into four shorter essays, each describing an aspect of the mythology, with the same names occurring in all four essays. The first essay deals with “The Aristocrat”, the noveau riche of the new country, where there was a “conflation of capitalist with aristocrat”, a recognition of the “inequalities and exploitation”, and “lack of social conscious” of the group (as compared to the ‘noblesse oblige’ of the landed hereditary aristocracy). This era lasted through the great railway building era and the era of industrialization that saw the corporate magnates using the army and hired private guards to put down strikes (some things really do not change).

“The Confidence Man” looks at the “orgy of speculation” and its accompanying “crisis of confidence” in the markets, with its “allure of wealth…and depravity and risk” that created “celebrity crooks.”  There was a “mordant fascination with an emerging commercial civilization that seemed fraudulent to the core.”  The era of the Robber Barons, the great railroad developments seemed “primordial…grandiloquent, folksy…cartoonish…with a touch of evil,” arising from “eminent men” with “tawdry schemes.” Here arises one of the author’s concepts of the “complicity of the victims” who accepted the “flim flam and airborne enthusiasm” of the promoters, giving them a “willing suspension of disbelief.” It is here that Fraser introduces the idea that after Enron there was no great shake-up but rather a “muted response…especially given the scale of the abuses.” 

Fraser’s section on “The Hero” focuses on J. P. Morgan whom he credits with essentially saving the country from financial disaster in the late 1800s by restructuring the railroads, arranging the first era of corporate conglomerates, and in 1907 rescuing a collapsed trust company that endangered the whole system.  Recognized within this essay is the shift from an economy that actually produced manufactured goods to one a hundred years later where “Wall Street is at the center of a decaying productive apparatus” that “concealed an underlying stagnation” and instead “relied on the heady vapours given off by the financial services sector.” So there is some recognition on the author’s part that somehow the current financial situation is not on a solid foundation, but he in no way expresses any insight into what that could lead to. Perhaps he had no intention to do so, but in consideration of current events, it becomes a weakness to his mythology.

This leads finally to “The Immoralist”, the recognition of “unearned wealth…leached” from the consumer. The street, “like a parasite it leeched away real wealth that originated elsewhere,” and accompanied by the recognition that “the stupendous wealth, which presumably embodied scientific, technical, and organizational progress, was also responsible for poverty, with its calamitous social chaos and moral decline.”

The author returns to the complicity of the victim, an idea that needs to be challenged by current events. There is no sector of the economy that is not affected by the various levels of debt in the United States. Much of this is consumer greed, stimulated by the advertising propaganda of the multinational corporations. Yet with the media firmly in the pockets of the corporations themselves, the citizen is daily bombarded with images and messages of consumerism, the most ludicrous one at the moment being the various financial advisor groups trying to convince everyone that things will turn around in a year or two – which for the corporations perhaps they will if they can get their hands on enough of the taxpayers dollars. 

Goaded by propaganda, with pension funds put into mutual funds, with trillions of dollars of mortgage debt put into such arcane debt funds that even the economists neither truly understand them nor are able to explain them to others, the citizen has little room to manoeuvre. Even local savings account, once the safe conservative method of accumulating financial backing for local manufacturing businesses and safe conventional mortgages, are now a forbidding terrain within the overall debt collapse. Fraser stopped his essays one item short of the reality of today.

But more, these are essays generally out of context, out of place, out of time. As a mythology of the market, of Wall Street, the essays serve as an entertaining read of the sociology and mythology surrounding the markets, but they do not advocate or propose ideas that extend ones thinking beyond that. At the end of it all, it is in its own way a “hurrah” for the United States entrepreneurial spirit which ranges from the imagined greatness of the risk taker and empire builder to the darker malignant side of the confidence man and con artist, perhaps evil but still secretly admired for bucking the system – at least until one has to go to the pawnshop in order to get money for the next meal on the table.

– Jim Miles is a Canadian educator and a regular contributor/columnist of opinion pieces and book reviews for The Palestine Chronicle.  Miles’ work is also presented globally through other alternative websites and news publications.

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