Review of William Cohan’s Why Wall Street Matters

William Cohan is a magnificent author, perhaps one of my favorites, with his House of Cards on the fall of Bear Stearns being an utter masterpiece, and his frequent writing in Vanity Fair and such being compelling and mature.  Furthermore, the general thesis of his new book, Why Wall Street Matters, is an essentially undeniable ditty of wisdom – that very few Americans would like to even comprehend a society without Wall Street – without the capital markets that we now equate with the famed New York road.  So I actually hate to write a negative piece on an author I adore writing a book I agree with, but I do have to say that for this Cohan fan, I would have preferred to get a sort of 400-page epic from Cohan on the history of Wall Street, complete with the due indictments of greed and corruption and the apologetic for her basic existence.  This 150-page cheat sheet felt rushed, was highly redundant (to a point where I can’t believe an editor let it go), and lacked the gripping saga writing that Cohan has previously mastered.  He gives some teasers of Wall Street history, he appropriately whacks the Elizabeth Warrens of our day into oblivion, and he generally states a thesis that really lacks a good counter-argument, but there is little meat on the bone, and that just left me wanting more.

His basic conclusion is: Wall Street is vital, but incentives need improving.  Okay.  Fair enough.  No pushback from anywhere.  But his apparent connection with Nassim Taleb’s “skin in the game” concept lacks specificity.  Though he bemoans the death of private partnerships on Wall Street, he at least is wise enough to admit they could never, ever come back in this realm of modernity and sophistication and scale (and seems to actually miss that that is why they had to evolve in the first place). But his points are wise and heedable that the bonus structure ought to be improved, with significant risk attached to those making systemic decisions.  Besides one somewhat silly section about seemingly tearing apart modern limited liability laws, it is totally unclear to the reader if the civil magistrate ought to be imposing these fiery consequences on Wall Street compensation committees, or if he simply means that boards of directors ought to be better re-aligning their own internal guidelines and mandates.  It would be hard to flush this out in th few miniature pages he allotted, but there is a big topic here, and Cohan absolutely has the gravitas and intellect to lead the discussion.  He just didn’t do it in this book.

In a sense, this is an odd review, because I didn’t much care for this little ditty Cohan has put out, but I almost feel like I could write a very positive review now for a 400-page book that doesn’t exist.  These topics Cohan addresses are all worthwhile, and he is a capable pen to lead the effort.  This book just wasn’t it.