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.
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,” 1he 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.