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Barry Ritholtz

In Defense of Wall Street

Jack Bogle, the Vanguard founder, has it wrong: The financial-services industry does add value to the economy.

A nit to pick with Jack Bogle.

A nit to pick with Jack Bogle.

Photographer: Peter Foley/Bloomberg

I have railed against financial-service industry excesses, such as over-the-top fees, the manipulation of investor emotions, the pursuit of alpha at the expense of beta, and the failure to make clients’ interests the priority via a fiduciary rule. I even wrote a book detailing the evils of privatized profits and socialized losses.

So it is with some amusement that I occasionally find myself defending Wall Street from critics like Vanguard founder Jack Bogle. In his 2010 book, “Enough: True Measures of Money, Business, and Life,”  he noted that the “financial system subtracts value.” Usually, I am simpatico with Bogle’s philosophy, but enough has happened in the ensuing years for us to revisit this statement — and find it wanting.