Auletta and William Cohan Discuss Greed and Geithner
In 1985, Ken Auletta wrote a financial classic, Greed and Glory on Wall Street. Now, William Cohan has written another, House of Cards. In a freewheeling discussion on the economic crisis, for the Daily Beast, the authors pin blame, reveal lessons and pull back the curtains on some of Wall Street's most important characters.
Auletta: When I ask what's the lesson you will tell your sons, and you said it was greed. Overwhelming greed. That would suggest if I posed the question to you, "How do we prevent this from happening again?" Greed is eternal.
Cohan: It's human nature. I don't know whether the first recorded bubble was the tulips in Amsterdam. I'm sure there were others before that. We have a very global economy, human nature—it's a capitalistic economy. It's a very efficient way of allocating resources and capital. Unfortunately, it gets out of control. Every 20 years or so—25 years, it just—history repeats itself. The problem is that most Wall Street firms kill off their institutional memory.
As people get to be 40, 50, they get rid of them. So, anybody who's lived through these before is gone because they're too expensive. They're potential rivals to the top. So, they get rid of 'em. They all do it. You have people who are running the firms 20 years later who don’t know what happened 20 years before.