Wall Street today is lost and searching for its role, according to author Michael Lewis.
“Technology has created a world that’s very hostile to intermediaries in most industries. And Wall Street has fought to preserve its position as an intermediary where it’s really not necessary in a lot of cases,” he says. “It’s actually, probably, in decline.”
Lewis — perhaps best known for two books later adapted to film, “Moneyball” and “The Blind Side” — used to be a financial trader. He left after three years and wrote a tell-all, his first book, “Liar’s Poker.”
Twenty five years later, the book has been reissued. And while he’s continued his deep look at finance with his recent book “Flash Boys,” it’s strange how the world Lewis depicted in the late ’80s feels oddly familiar.
Listen to the full interview in the player above or read the transcript, which has been edited for clarity.
Kai Ryssdal: This book was not received the way you thought it would be… you thought it would be a cautionary tale.
Michael Lewis: It had the opposite effect of what I expected. I didn’t think of it as a moralistic tale about Wall Street … but I did think that for someone who had some other idea of what to do with their lives, it would demystify it, and maybe they could go on and do what they were supposed to do.
Instead, I swear after six months, I had a thousand letters from kids saying, “I’m a junior at Ohio State and I’ve read your how-to book about how to get ahead on Wall Street. Is there anything you left out? Because you made me even more interested in doing it.”
KR: And you know why, right? Because you talk about making money come out of a telephone.
ML: Not only do I make money come out of a telephone, but I clearly have no idea what I’m doing. The combination is like catnip for a male in college. He has no idea what he can do, he has no sense of himself in the marketplace, and then there’s this thing… they give you lots of money even though you don’t know what you’re doing? It created a stampede.
KR: And you say “male” intentionally because at the time this book was written, females in this business were few and very far between.
ML: True. I would say that even now, [women are] kept far from the risk taking. It’s still a very male-dominated business. At the time, yes, my training program at Salomon Brothers was 85 to 90 percent guys.
KR: And very fraternity house-like, I mean, the description of some of the guys sitting in the back row of that training class throwing spitballs.
It was considered normal and acceptable to order a stripper up on the trading floor.
KR: It seems like very little has changed. The essence of what happens on Wall Street, 25 years later, seems sort of to be the same.
ML: There’s a timelessness about it isn’t there? There are a couple of things that I think are a little different, but it’s by degree, not kind. I think that the street has gotten much, much better at disguising what it does because it’s gotten so much more complicated. All of a sudden, you’re looking at a truly opaque black box when you’re looking at something that used to be as simple as the stock market.
The other thing is this idea of “too big to fail.” That did not exist when I wrote the book. There was a sense that even my firm, Salomon Brothers, could fail. And now, if you’re in the equivalent of Salomen Brothers today, you’re in a place that, basically, you sense, won’t be allowed to fail.
KR: You say that these guys are working harder at establishing a public persona, but I wonder if that doesn’t lend itself to a real difference, actually, between Wall Street then and now. Wall Street then was sleazy, with strippers on the trading floor, as you said. Now, it just seems a little sinister, because we’re supposed to believe that they’re out for the common good.
ML: I think there has been much more attention paid to how things seem, rather than how things are, then there was then. There are phalanxes of corporate PR people. People inside these firms, no way are they going to talk to a journalist. You’ve got a much slicker corporate exterior now and a much more careful presentation of self.
One of the things that was kind of lovely about the world I described in Salomen Brothers in the ’80s was that the people kind of were how they seemed. There wasn’t a lot of hypocrisy. You might approve or disapprove of the gambling and the strippers on the trading floor. But there was a certain integrity to it [laughs].
KR: And what is it now? What is Wall Street now?
ML: Lost. It has a very unclear sense of its purpose in the world. Technology has created a world that’s very hostile to intermediaries in most industries. And Wall Street has fought to preserve its position as an intermediary where it’s really not necessary in a lot of cases. It’s sort of like clawing to preserve its revenues and its profits at a time when it’s actually, probably, in decline.
KR: Do you re-read your own writing at all?
ML: It’s funny you ask, I got on the plane coming to New York the other day, and I thought, I gotta re-read this thing. I’ve never re-read it.
I opened it and thought, “I’m so bored with myself. I can’t do this. I just can’t.”
The only other time I’d done this, I put it on my lap when the paperback came out in 1990, to re-read it before I went on my paperback tour. And the guy in the seat next to me saw it and said, “I read that. Cynical bastard.” I put it away and didn’t read it then.
So I have not actually re-read it, but I vaguely remember what happened to me [laughs].
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