THE HELLHOUND OF WALL STREET

In The Hellhound of Wall Street, Michael Perino has just published an excellent account of the Pecora Hearings, the shorthand name given to the hearings of the Senate Banking Committe in February 1933, during the waning moments of the Hoover administration. The hearings were named not for the committee chairman, the well-motivated but less-than-charismatic chairman of the committee, the Republican Senator from South Dakota Peter Norbeck (one of the Progressive prairie Republicans that are now extinct), but for the committee’s chief counsel, Ferdinand Pecora, the colorful former Deputy District Attorney of Manhattan. Not surprising: he was the star of the show. With his dark good lucks, quick mind, and swaggering confidence, Pecora countered ethnic stereotypes in taking on the WASP aristocracy of Wall Street, and beating them. In just a handful of sessions, Pecora exposed double-dealing by Charles Mitchell of National City Bank, who had been the paragon of rectitude, showing that the bank inflated its own stock and peddled issues it knew to be worthless . The findings of the committee laid the groundwork for the passage of the Glass-Steagall Act under the Roosevelt Administration. These were the regulations that provided the framework for 75 years of stable growth, and it was their repeal that ushered in the casino mentality that has driven us into our present circumstances. Among the pleasures of this dramatic tale is reading what contemporary observers had to say. To a striking degree, they could be talking about our present circumstances. They are uncomfortably, maddeningly germane.

“It seems to me that the only thing some of our great financial institutions overlooked during the years of the boom was the installation of a roulette wheel for the convenience of the depositors. And of course, it would have been a wheel with four zeroes.” — Newspaperman Heywood Broun

“The corporations have paid their entrenched officials unconscionable salaries, they have speculated and gambled with private financial resources that they have been entrusted with, and have carried on their functions in disregard of the public interest and without an effort to do justice to their employees or even their stockholders.” — Senator David Walsh of Massachusetts

“If only part of the things brought out prove to be true, these men have done the American people more damage than all the incidental operations of Al Capone. Capone had the merit of confining his robbery and the infliction of physical violence to the wicked. If these stories are true, these men are not bankers but banksters who rob the poor, drive the innocent to poverty and suicide, and do infinite injury to those who honestly work and strive. Worse than that, they are traitors to our institutions and national ideas.”–President Herbert Hoover

“I do not believe that vice inheres in the rich and virtue in the poor. But for too long we have been largely operating on the assumption that the converse is the truth, and more particularly that the rich are guardians of wisdom and should control affairs. The crux of the business is not the wickedness of the Mitchells but the power which is wielded by concentration of financial power which they are wholly unworthy–no matter who they are–to wield because of the obfuscations and the arrogances which power almost invariably generates.”–Felix Frankfurter

“My gosh, I felt Charlie took my money.”–Franklin Delano Roosevelt

This final quote is amazingly instructive; it shows the personal connection to the issue that FDR had, the kind of connection which, as Eliot Spitzer pointed out, President Obama failed to make.