Two articles came out in the past week comparing Wall Street to a casino, pointing out that much of the activities of the big investment banks – like the synthetic CDO at the heart of the Goldman fraud case – provide no real value to society and are simply ways to bet on the direction of an event. In this case, the event was housing prices, but the articles ask how that bet is really any different than betting on the outcome of a baseball game or a roulette wheel.
What is particularly interesting is the source of these articles. One was an op-ed in the hyper-conservative Wall Street Journal, co-written by Niall Ferguson, a Harvard professor who is generally quite conservative, and Ted Forstmann, an equally conservative private equity financier. The other article was written by Andrew Ross Sorkin in his NY Times Dealbook. The Times is, of course, quite liberal, but Sorkin makes his living (quite lucrative, according to reports) by having great sources on Wall Street, and generally speaking you don’t keep those sources by insulting them in print.
For conservatives to publish against their leanings, and for ambitious journalists to publish against their career prospects, is a pretty big deal. They must have felt very strongly about the casino aspect of Wall Street to write those articles.
Just in! Here is Eliot Spitzer’s take on Wall Street as casino. You may discount him due to his hooker addiction, but he hits the nail on the head (so to speak) here.