Our coronavirus coverage is free for the first 24 hours. Find the latest information at Please consider subscribing or donating.

  1. Archive

Wall Street worried books could create a backlash

The husky-voiced caller from Pittsburgh was almost pleading. "Tell me something that will restore my confidence in the free-enterprise system," he told the guest on Larry King Live, the Cable News Network talk show. Michael Lewis, the author of Liar's Poker, a book about Salomon Brothers, paused and then answered, "I don't think there is much going on on Wall Street now that would restore your faith in free enterprise." It was every investment banker's nightmare.

It is bad enough for those on Wall Street that jokes about their profession have become a national pastime. Now, several recent books paint a devastating portrait of the Street and some of its most senior executives.

Two of those books have risen to second and third positions on The New York Times list of best-selling non-fiction hardcover books. Barbarians at the Gate, a Harper & Row book by Bryan Burrough and John Helyar, is an account of the takeover struggle for RJR Nabisco Inc., which ended with the company being acquired by Kohlberg, Kravis, Roberts & Co. Liar's Poker, a hilarious first-person account of life on a trading floor, is published by W.W. Norton & Co.

The excesses of Wall Street have been popularized before in movies like Wall Street, and the off-Broadway play Other People's Money. Both those are works of fiction.

Many people on Wall Street are divided about the accuracy of the portrait of the Street painted in these new books, most of which are non-fiction.

But some executives said such harsh representations of Wall Street, whether accurate or not, could have serious repercussions. They come as the nation seems to be in transition to a new gestalt.

Old-fashioned values are coming into vogue again, spurred on by the model of an ostensibly kinder, gentler president, political analysts say. Conspicuous consumption is out; environmentally correct diapers are in.

In such an atmosphere, some analysts say, a populist backlash might develop against business in general and Wall Street in particular.

"Culturally, you're probably looking at the leading indicators of a move away from looking at finance and business through favorable glasses," said Kevin Phillips, a political analyst in Washington with close ties to the Republican Party.

Phillips thinks that conservatives of the "let's deregulate, anything goes" school are already on the run, thanks to widely publicized debacles involving the savings and loan industry, overly leveraged companies and high-yield, high-risk "junk bonds."

His views are shared by many on Wall Street, who worry that if the economy weakens and unemployment rises, public attitudes toward business could turn hostile.

"Some of these books are indictments of the business community as much as the Wall Street community," said John C. Whitehead, a former deputy secretary of state who was a senior partner at the Wall Street firm of Goldman, Sachs & Co. "It does run the risk of reregulation, the growth of anti-business sentiment and consumerism."

Although none were willing to discuss it openly, several prominent Wall Street executives said a new novel called Hanover Place, written by Michael Thomas and published by Warner Books, has aroused fears of a resurgence of anti-Semitism.

In its apocalyptic ending, the novel equates takeovers and insider-trading with a new money-grubbing culture. Many of the characters are Jewish and, in the novel, that produces a virulent anti-Semitic backlash.

The other books do not raise an issue of such gravity. But they do offer insights that many readers have found astonishing and disturbing.

In Lewis' Liar's Poker, Salomon Brothers executives are depicted as an unruly band of juvenile delinquents whose idea of a good time is to rig chairs to collapse when sat upon and replace a suitcase of their colleague's travel clothes with wet paper towels. Sort of an Animal House with suspenders.

The book also depicts Salomon underlings as selling undesirable securities to unsuspecting customers.

"Be very wary, suspicious, is the point," Lewis counseled Larry King's audience.

A spokesman for Salomon, Robert Baker, said the book was "an amusing caricature."

Barbarians at the Gate _ and a less successful book published by New American Library on the same subject, True Greed, by Hope Lampert _ depicts some of Wall Street's most prominent executives as even more treacherous.

Deal makers named in both of these non-fiction books are shown as conniving and manipulative, more consumed with their own agendas than the goals of their clients.

Readers are left with an overwhelming sense that the $25-billion acquisition of RJR Nabisco occurred not because it was worth that much, or because it made economic sense, but because it was the inevitable climax of a battle royal of egos.

Tom Brokaw, the NBC news anchor, in an interview with Burrough, a co-author of Barbarians, asked if he had ever heard any of the principals say something like, "Wait a minute, we do have an obligation to those people who live in places in North Carolina and Atlanta, Ga., and who depend on this company, really, for their daily paycheck and maybe for their financial future."

Burrough replied, "In fact, the evidence shows that the workers were the last thing anyone was concerned with."

While some of those who are depicted in the books say the accounts are largely correct, others insist the portraits are exaggerated.

"There are a lot of very thoughtful, conscientious people who are interested in their clients, who put their clients before themselves," said Martin Lipton, a top takeover lawyer at the New York law firm of Wachtell, Lipton Rosen & Katz. "You never see the other side of the picture because that would be called a "puff piece.' It's books like Liar's Poker and Barbarians that sell."

Henry R. Kravis, a partner at Kohlberg, Kravis, expressed concern that journalists were exaggerating Wall Street's faults.

"I'm afraid a lot has been blown out of proportion," he said. "We could kill the goose that laid the golden egg: the capital markets of this country."

The overriding issue may not be how accurate or representative these books are, but the extent to which they are perceived to be.