Con Games and Gamblers on Wall Street

Two vast worlds co-exist in the capitalist universe we now know: one, the world of finance (banking, insurance, and securities markets), and two, the corporate “real economy” that produces nonfinancial goods and services and provides the underlying “fundamentals” of the securities markets. Although both the whole and the separate parts deserve more scrutiny than they get—especially from a left whose view of society centers on economic concerns—the part that screams most shrilly for attention these days is the stock market, the main branch of the securities markets and a place whose identity grows even fuzzier as its jurisdiction moves further into banking. Of course, banking also needs probing by outsiders; but one thing at a time.

We are aware of the plus side of Wall Street as a place for some people to make a lot of money. But in our euphoria about riches, we have neglected a critical appraisal of the market’s more negative functions as an enveloping social institution and as a shaky custodian of much of our nation’s wealth. Having witnessed some ominous gyrations and plunges in the market recently, however, we may be eager to take a closer look. To this end I pass along these brief notes about its flaws and frailties. The flaws are many, and they affect the real economy, the global economy, and both investors and the general public.

As for the real economy, an astonishing number of people assume that the market’s chief, and very laudable...