Two Tastes That Taste Great Together

April 10, 2007 | 4 books mentioned 2 3 min read

Every so often in a reader’s life, he stumbles upon two books that complement each other like red meat and red wine. Such a happy accident befell me last month, when I happened to read Michael Lewis’ Liar’s Poker hard on the heels of Thomas Frank’s One Market Under God.

coverThe Frank book, an evisceration of the free-market discourse and management culture of the 90s, was a fine read on its own: funny, incisive, and angry. And yet, in its argumentation, it at first struck me as inferior to Frank’s more recent What’s the Matter With Kansas? Like Lewis Lapham, who published excerpts from both books in Harper’s, Frank has a tendency to preach to the choir. This often doesn’t bother me; I sit right in the middle of that choir. When Frank demonstrates the tension between a free market and economic democracy, I say “Amen.” When he decries the commodification of the counterculture, I shout “Hallelujah.”

When Frank gets down to naming names, however, I get uneasy. One Market Under God does not hesitate to lay the sorry state of the world at the feet of specific, individual evildoers, and I, raised to try to see the best in people, prefer to blame systemic ills. And so I’m not sure if Frank’s depiction of scheming, iniquitous fat cats is a workable belief or a bit of populist wishful thinking.

coverOr I wasn’t sure, until I picked up Liar’s Poker. Here Michael Lewis, himself a former stockbroker, takes us inside Salomon Brothers, the investment bank where he worked in the rip-roaring 80s. Lewis establishes his centrist credentials early and often, and generally eschews editorializing. It is especially appalling, then, (if weirdly engrossing) to discover that Salomon Brothers is full of…scheming, iniquitous fat cats!

Liar’s Poker is like a nonfiction version of Oliver Stone’s Wall Street (IMDb). The visionary salesmen and traders of Solomon Brothers screw the little guy at every turn, and we get to see every dirty detail. They rip off investors, lie to the public, devalue successful companies, inflate worthless ones, lay off employees, throw phones at underlings, grope secretaries, consume conspicuously, and generally turn themselves into caricatures of the worst kind of capitalist exploitation. The free-market they promote is, in fact, far from free.

In an ideal marketplace, knowledge is symmetrical. The vulgar version: buyer and seller are in possession of the same set of facts, and prices reach equilibrium according to the law of supply and demand. This is why there are laws against rolling back odometers, and against making false claims in advertisements. But investment banks, as Lewis portrays them, rely on the market’s inefficiency at distributing information – its tendency to allow those most heavily invested in a market to control the flow of knowledge within and about that market – to buy below fair-market value, and to sell well above it.

Of course, we are assured, such excesses have since been curbed by regulation. (This is part of the 90s market populism analyzed in One Market Under God, wherein Wall Street is brought to heel by Main Street.) Insider trading laws are now stringent, we are told; firewalls have arisen between the trading floors where commodities are sold and the equity departments where they are underwritten. But Wall Street is still raking it in, while Main Street drifts and eddies on stagnant wages.

Perhaps the current investment bank bonanza is merely the financial industry’s reward for its own newfound virtuousness. Still, the next time you hear an I-banker lamenting the regulatory climate, or claiming that Sarbanes-Oxley is driving all the moneymen to London, ask him what kind of bonus he got last year, and whether he’s still living in New York. Then tell him you’ve got a bridge you’re looking to sell…

See also: Max’s review of Liar’s Poker

is the author of City on Fire and A Field Guide to the North American Family. In 2017, he was named one of Granta's Best Young American Novelists.


  1. The securities markets are in some ways an ideal marketplace, but if information were perfectly symmetrical there would be no basis for buying and selling securities other than intrinsic value, which is nothing, so if they don’t act as a store of value or a chance to gain based on that asymmetry then no one would buy them, companies wouldn’t be able to raise money and the capitalist system would collapse.

    Interestingly, the characters in Liar’s Poker trade US Govt. bonds, one of the most efficient markets in the world where the difference between the buying and selling price of a bond (the measure of efficiency, thus information parity) can often be 1/64th of a percent (although in the 80s information flow was not what it is now). Most of the boon in financial dealing is in the world of hedge funds, which exist solely to exploit, with computational precision, inefficiencies, in turn creating even more efficiencies.

    Gross frauds aside, in my opinion it’s not Wall Street that is the culprit, it’s the ready availability of credit (related of course to Wall Street in that the credit wouldn’t be available if it weren’t for Wall Street) that is behavior modifying and ultimately stultifying in its vicious cycle of non-wealth creating consumerism and false prosperity. One big area in the markets is the aftermarket trading in auto leases, a huge shell game and massively profitable – and you want to see exploitation, see the spreads on loans for mobile homes and goods to low income people.

    Ah, but sorry, you were reviewing Liar’s Poker and I took your symmetry comment for a ride. Liar’s Poker (I read it I guess 15 years ago) is a great book and paints a far more accurate picture of the time than anything Oliver Stone ever did. But the real corruption can be found in the books Predator’s Ball, Den of Theives, and Barbarians at the Gate (the latter made into a mockery of a movie). Read those and you’ll be so disgusted (yet oddly entertained) that you’ll not want to read another one.

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