A Wall Street State of Mind | The Nation


A Wall Street State of Mind

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The New York Stock Exchange on the eve of its completion in 1903
The New York Stock Exchange on the eve of its completion in 1903
Debris from the financial implosion was everywhere, still smoldering. Who knew what economic corpses would show up next, how far and wide the devastation extended? Still, early in the spring of 2009, The New York Times quoted a young Wall Street reveler from a large investment firm celebrating at a swanky city eatery: “If you’d asked me in October, I’d say it’d be a different situation, and I don’t think I’d be here. Then the government gave us $10 billion!”

Before the meltdown, the I-bank traders knew, as so many in the industry knew, that they were peddling junk securities—yet no fear, no reservations clouded their knowingness. This all became clear to the rest of us after a Senate hearing in April 2010, where a former Moody’s credit officer explained the traders’ hip, coded argot, “IBG-YBG.” When the dust cleared, the bankers told each other, “I’ll be gone, you’ll be gone.”

About the Author

Steve Fraser
Steve Fraser is a visiting professor at New York University, co-founder of the American Empire Project, and the author...

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The poetry of Wall Street! So much said in so few words. The reveler and the fraudsters condensed a state of mind that incubated on the Street and then metastasized throughout the tissues of the city. Compacted together inside those verbal IEDs are the combustible components of an aggressor worldview: the sense of entitlement and the amorality; the imperial arrogance alongside the hip insiderism; a psychic stew of irreverence and ironic distancing, cynicism but also the sneaky thrill of transgression, macho bullying and sociopathic cool. Or as Gordon Gekko once put it: “If you need a friend, get a dog.”

Before the “bonfire of the vanities” of the 1980s, the Street camouflaged its baser instincts with the discreet charm of the limousine liberal, his noblesse oblige and sang-froid. So too did New York, long ago, nurture a reputation for toughness, for being a hard place to make it, for impiety and iconoclasm and a rebellious perseverance. The toughness of New York—say in the Marx Brothers’ version—derived from a cosmopolitan city culture saturated in the emotional strivings and courage of middling upstarts, immigrant and working-class neighborhoods ready to challenge the pretensions of the power elites in every arena from opera houses to the White House. Its motivational DNA carried instincts for both self-advancement and social solidarity. For all of the city's imperial chest-thumping, New York’s fabled grittiness derived from a mix of middle-class entrepreneurial gumption and working-class fight-back.

Over the last generation, New York has become a caricature of that earlier everyman insouciance, thanks to Wall Street’s overweening presence. The caustic camaraderie of the Marxes mutated into the narcissism of domination. A city that once admired the feistiness of seamstresses and stevedores and the hustling shrewdness of the family businessman came instead to admire its “big swinging dicks.”

“Marxist” New York did not vanish; it receded from view. What happened was a shift in the center of cultural gravity. Wall Street washed over every aspect of city life. I’m reminded of what occurred in Boston in 1919. That was a year when everything that could happen did happen, from worldwide epidemic influenza to worldwide epidemic revolution. In Boston, a tank containing thousands of tons of molasses tipped over, and the city was inundated with a slow-moving tidal wave of the goo, killing people and horses, covering warehouses and factories, streets and homes. Wall Street’s irresistible cultural flooding of New York City was like that, its toxic sludge showing up everywhere.

* * *

Decade of Greed

The tide came rolling in beginning in the 1980s. Wall Street gave birth to a new vanguard of the bourgeoisie, upstarts often from the outer boroughs, middle-class suburbs and public colleges. Junk bond magicians, merger-and-acquisition athletes, leveraged buyout geniuses were fearlessly challenging and unhorsing what they mocked as the sclerotic, white-shoe old guard, sequestered in its fossilized, walnut-paneled castles of corporate and financial timidity. Cigar-chomping “Jacobins” squared off against those in pinstripe suits and rimless glasses; it was a war waged by improbable heroes of anti-capitalism on behalf of capitalism!

Newspaper editors, magazine entrepreneurs, novelists, playwrights, filmmakers and television producers, book publishers, historians, gossip columnists, architects and even choreographers looked on with a kind of bug-eyed fascination. They couldn’t take their eyes off what Michael Thomas, a columnist for Manhattan Inc. (one of a host of slick new city publications born under the Street’s aura, and with a name to die for) waspishly dubbed the “New Tycoonery.”

Gushing, bemused or both, other magazines like Success, Venture, Millionaire and a reborn Vanity Fair (as well as established ones like Esquire and The New Yorker) became the documentarians of the era’s power-suit costuming, its manly horseplay, its philanthropic social climbing, its OK Corral financial stare-‘em-downs and shoot-‘em-ups. A “letter from the editor” in Manhattan Inc.’s maiden issue proclaimed that “the business of New York is, in a word, power—economic, political, social, and cultural.” The editor envisioned that the audience for the magazine would consist of “Manhattan-based men and women who operate on a grand scale.”

Ad pages filled up with solicitations from high-end real estate brokerages offering “historic mansions” all around the metropolitan gold coast. This comprised a geography running from the onetime warehouse, workshop and shabby residential neighborhoods now dubbed SoHo and TriBeCa to those “sophisticated living” and “blue-chip investments” in Old Lyme, Connecticut, or Westchester or Bucks County.

Collateral damage in the form of rising rents and home prices and expensive cups of coffee made Manhattan unlivable for the huddled masses of yesteryear. In the decades that followed, the borough underwent a class cleansing, as if its former residents were placed under orders of evacuation. Once the center of the city’s cotton and textile trade, SoHo morphed into the sixth-most-expensive ZIP code in the United States. Manufacturers and wholesalers fled the city as rents soared. So too were artists’ ateliers replaced by exotic eateries and boutiques. As it had a century earlier, New York became the showcase city for gilded extravagance.

* * *

Splendor in the City

During the heady days running from Reagan’s “morning in America” through the Clinton dot-com debacle, the after-hours social life of Wall Street’s newest moguls had a narcotic effect on the city’s journalists. They filled page after page with who wore what and who sat next to whom and what edible artwork was served at the latest fete for the Metropolitan Opera. Philanthropy as a form of social climbing became an indoor sport with an avid following. The city’s hostesses threw shindigs at “Club Met,” otherwise known as the Metropolitan Museum of Art. Saul Steinberg, the era’s most notorious “greenmailer” and original corporate raider, the Brooklyn-born son of a midsize plastics manufacturer, was ushered into society at a gala affair covered like a coronation, where live models posed as Old Master paintings.

Back in the nineteenth century, New Yorkers made fun of what they called the “shoddy” or “shaver” or “chop-chop” aristocracy. Their fakery seemed laughable if not obnoxious. A century later, not many were laughing. What Henry James had once characterized as the “bottomless superficiality” of the upper-class world now mirrored the glossy, image-obsessed state of daily life in “Capital City.” Nouveau robber barons competed with rock stars for off-the-business-page coverage in style-conscious publications like New York, which meticulously traced their footsteps across the art market, the city’s nightlife and the white sands of the Hamptons. Male sartorial splendor became an item of editorial comment as well as commercial advertisement. Wall Street modeled a return to a kind of rococo extravagance: red suspenders, assertive midriffs encased in vests, custom suits from the Old World that gave off a lambent shimmer. Manhattan Inc. invented a column called “Power Tools” offering advice on power fashions, including a pair of “Aggressive” wing-tipped patent leather shoes ($355, about $1,000 today) and a silk scarf embellished with a “Napoleonic bee design” ($135, about $380 today). Aston Martin slyly promised prospective customers that the car would “Demoralize thy neighbor.”

Until the Crash of ‘08, this showiness mesmerized the city. Like many a public spectacle, it was more than just entertainment; it was a display of power, the cultural arsenal of an elite with few if any other creditable credentials.

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