Why Wall Street Matters

I like to fancy myself someone who reads across the political spectrum. So a book called “Why Wall Street Matters” drew my interest when I saw it featured on a list of short books that pack big ideas. Although the review was tepid (or worse), I wanted to read an argument defending the much pilloried heart of finance in America.

In its pages, I found some interesting history but mostly a dearth of evidence or reporting on its central question. Wall Street democratizes capital, creates liquidity in markets, and is the engine of economic growth. Cohan also concedes that it isn’t perfect. But instead of diving into the nuances of the debate on regulation versus freedom, Cohan mostly repeats his attacks on people like Senator Elizabeth Warren and his accolades of Wall Street insiders. This sort of thing, which reminded me of Cable News, is not very compelling to me. I don’t think any serious person contends that Wall Street is unnecessary. But no serious person also contends that it works perfectly. His final claim that the small but impactful change in incentive structures for Wall Street employees feels incomplete.

Because it was a quick read, I didn’t mind much finishing this book. But I was left unimpressed with his take on the topic. This is a massively interesting question. This industry has an outsized impact on our politics. It is given an unsatisfying treatment in this book.