The 86 Biggest Lies on Wall Street
by John R Talbott
Constable, £8.99
In the opening lines of this fascinating book, John Talbott anticipates the smart Alecs: “I know what you’re thinking. How was I able to narrow it down to just 86?” It’s a sobering thought that even if there had been only 10 or 20, those who are supposed to regulate and protect economies, including key people in Wall Street companies, have screwed up in epic proportions. In this economic meltdown, we have witnessed politicians, bankers and financial gurus running for cover, attempting to wash their hands of blame and pointing the finger at anyone and anything other than themselves.
Losses in billions have boggled our eyes and still some of the fat cats carry off large amounts of wonga in salaries, bonuses and pensions while ordinary people lose their jobs. The open-jawed citizen knows something is wrong but, perhaps, cannot see through the fog of spin and claptrap to get at the truth. Talbott has done us a service by taking a calm and thorough look at this number-crunching recession and offers evidence that truth was not high on the priority list of the scoundrels in this global drama.
The lies on his list include the notion that going into the current crisis the US economy was the strongest and most resilient in the world; that this was a sub-prime mortgage problem no one could have foreseen; that, like the Great Crash of 1929, it was primarily a liquidity problem and injecting cash into the system would solve it; that senior executive remuneration is deserved because it is determined in a highly competitive market; that excessive regulation is not needed because there is enough protection already on the statute books; and that government regulation is bad for economic growth and prosperity.
To eliminate lying and cheating in the financial sector and to ensure greater stability in the future, Talbott proposes clearer restrictions on the influence of commercial banks; more measured control of risks; a clampdown on banks’ money to lobby politicians; closure of the hedge fund industry; wiping out rating agencies; discouraging global diversification of investors’ assets; simplifying financial products and giving shareholders the power to recruit and select corporate board members including the CEO.
This book takes a surgical knife to the financial world and offers remedies both to cure the current ills and to lay foundations for a better future. But for all of its intelligence and timeliness, it is, sadly, unlikely to eradicate the liars, cheats and villains completely. Because, like death and taxes, they will always be with us. And ain’t that the truth.
Joe Cushnan
About The Author
