I review William D. Cohan's House of Cards: How Wall Street's Gamblers Broke Capitalism over on The Book Depository:
In normal economic times the fall of Bear Stearns, founded as an equity trading house in 1923 and one of the largest global investment banks prior to its sudden collapse in March 2008, would be a major story. But, then, Lehman Brothers disintegrated, Merrill Lynch was sold for a pittance, and the world's banking system suddenly realised that virtual assets were worth virtually nothing and all but came to a standstill. After all that Bear Stearns's story didn't seem quite so exceptional or noteworthy. However, the story of this 85-year-old bank, securities trader and brokerage firm is worth hearing and is grippingly told by William D. Cohan who concentrates his attention on three wild and whacky bank bosses: Cy Lewis, Ace Greenberg and Jimmy Cayne. The latter, Cayne, is described as having "world-champion-level bridge skills". His machismo and his gambling are emblematic of a system that from the outside seems impenetrably complicated but is, in truth, run by men of limited intelligence and unlimited avarice.
Cohan's book is subtitled How Wall Street's Gamblers Broke Capitalism, but it is precisely that global, historically-situated, man-made, overturnable social system -- capitalism -- that he never defines or critiques. This is a thrilling narrative in parts but, like so many books about the credit crunch it is curiously incurious about the system that requires bankers to get up to their creative accounting in the first place. Certainly, the world financial meltdown came about because of perverse and ridiculous derivatives, collateralized debt, unrestrained mortgages and also because -- as Cohan shows clearly -- of the negligence, greed and criminality of individual bankers, but behind all of that is a social system that has always been blind to human need and based on the extraction and circulation of value. Wall Street's gamblers haven't broken that system, but they have broken the real economy where real people live and work. And when real people realise that Wall Street gamblers are merely an epiphenomenon of a system that is intrinsically inimical to their needs then it might be them and not a bunch of greedy, overpaid, blue-eyed white men who really break capitalism. For good.