I was shocked to learn that when the big Wall Street firms all became public companies, which is arguably the most important precursor event to the current unpleasantness, many people knew this was a terrible idea!
There are at least two parts to the failure message: think carefully about the public company structure and how it changes your institutions’ incentives; and listen to the wise.
The rest of the piece is entertaining but not on point to the current discussion and not a must-read.
I’m concerned about hindsight. Lewis only says that the old guard objected, but he doesn’t make it entirely clear why; “moral disapproval” doesn’t suggest consequentialism.
Lewis certainly does suffer from hindsight. The article claims that he was “waiting for the end of Wall Street,” while his book says “I didn’t think Wall Street would collapse.”
Not to focus exclusively on markets, and it’s not a book, but this page of a Michael Lewis piece from Portfolio.com is a crucial read (and short!):
http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom?page=9#page=9
I was shocked to learn that when the big Wall Street firms all became public companies, which is arguably the most important precursor event to the current unpleasantness, many people knew this was a terrible idea!
There are at least two parts to the failure message: think carefully about the public company structure and how it changes your institutions’ incentives; and listen to the wise.
The rest of the piece is entertaining but not on point to the current discussion and not a must-read.
I’m concerned about hindsight. Lewis only says that the old guard objected, but he doesn’t make it entirely clear why; “moral disapproval” doesn’t suggest consequentialism.
Lewis certainly does suffer from hindsight. The article claims that he was “waiting for the end of Wall Street,” while his book says “I didn’t think Wall Street would collapse.”