THIS IS A BORZOI BOOK PUBLISHED BY ALFRED A KNOPF Copyright © 2011 by Jeff Madrick All rights reserved Published in the United States by Alfred A Knopf, a division of Random House, Inc., New York, and in Canada by Random House of Canada Limited, Toronto www.aaknopf.com Knopf, Borzoi Books, and the colophon are registered trademarks of Random House, Inc Library of Congress Cataloging-in-Publication Data Madrick, Jeffrey G Age of greed : the triumph of finance and the decline of America, 1970 to the present / Jeff Madrick p cm Includes index eISBN: 978-0-307-59671-0 Wealth—Moral and ethical aspects Financial crises—United States—History United States—Politics and government—20th century United States—Politics and government—21st century I Title HC79.W4M33 2011 330.9730092’2—dc22 2011003399 Jacket design by David J High, highdzn v3.1 For Kim Contents Cover Title Page Copyright Dedication Introduction One REVOLUTION 10 11 Prologue: Lewis Uhler Believer Walter Wriston Regulatory Revolt Milton Friedman Proselytizer Richard Nixon and Arthur Burns Political Expediency Joe Flom The Hostile Takeover and Its Consequences Ivan Boesky Wanting It All Walter Wriston II Bailing Out Citibank Ronald Reagan The Making of an Ideology Ted Turner, Sam Walton, and Steve Ross Size Becomes Strategy Jimmy Carter Capitulation Howard Jarvis and Jack Kemp Tapping the Anger Paul Volcker, Jimmy Carter, and Ronald Reagan Revolution Completed Two THE NEW GUARD 12 Tom Peters and Jack Welch Promises Broken 13 Michael Milken “The Magnificent” 14 Alan Greenspan Ideologue 15 George Soros and John Meriwether Fabulous Wealth and Controversial Power 16 Sandy Weill King of the World 17 Jack Grubman, Frank Quattrone, Ken Lay, and Sandy Weill Decade of Deceit 18 Angelo Mozilo The American Tragedy 19 Jimmy Cayne, Richard Fuld, Stan O’Neal, and Chuck Prince Collapse Epilogue Notes Acknowledgments Index Illustration Credits A Note About the Author Other Books by This Author Introduction This book starts with a relatively unknown man named Lewis Uhler, a Southern Californian, who, like his father before him, hated the New Deal He and others like him, who came of age in the 1950s, feared their personal liberty was in constant danger of being taken away by big government Many of them were sincere, and most were angry—especially because in the 1950s and 1960s they weren’t being heard But they laid the foundation for a new age In those years, most Americans believed the federal government was good for them Washington created far-reaching nancial, social, and economic reforms in the Depression and managed the massive war e ort in the 1940s In the 1950s it built highways, set out to send men into space, and subsidized housing In the 1960s, it created Medicare, expanded Social Security, adopted regulations to protect consumers and workers, passed long-awaited civil rights guarantees, and developed antipoverty programs Progressive taxation to pay the bills was widely accepted as just All the while, the American economy grew rapidly and wages doubled adjusted for in ation for workers at every income level Perhaps more than any other factor, punishingly high in ation in the 1970s changed all of this Americans panicked Well before incomes became highly unequal or the wealthy gained undue political power with outsize campaign contributions and wellnanced lobbying organizations and think tanks, Americans came to believe that government had gone too far The ideology of the Lewis Uhlers of America, long dormant, began to gain in uence Soon social programs were curtailed Regulations were eliminated and weakened Uhler among many others participated in a tax revolt that started slowly but then spread rapidly, well before Ronald Reagan was elected president The new persistent refrain was that big government held all Americans back The narrative came to dominate the public discourse Greed will always be with us, but it rises and falls with the times Some rebalancing between government and business may have been necessary by the 1970s, and some reworking of government programs was needed But the reforms went blindly ahead Vital purposes of government were rejected An age of greed did not begin in the 2000s It started decades earlier, and the crisis of 2008 was its culmination, and probably not its end This book is about how this shift came about, and how profound its in uence has been It contends that the rise of an age of greed since the 1970s was not the result of the inevitable forces of history or of a natural swing of a political pendulum The new age was made by people, and how they reacted to crisis and change Much damage was done along the way Part I tells the story of this revolution Presidents, policymakers, and economists are critical to the history But it is mostly a story of business pioneers who fought government regulation or, through innovation, escaped government oversight—all the while diminishing the power of government and reinforcing the changing national attitudes The 1970s set the stage for a different America Once government was no longer a counterweight and a new political ideology cleared their path, nanciers led the way Wall Street changed radically Part II tells these stories Debt more than innovation and technological progress became the economy’s driving force Financial businesses doubled in size compared to the economy and pro ts grew still faster Hundreds of billions of precious American savings were wasted The new age started with Walter Wriston, the most innovative, aggressive, and admired of the nation’s commercial bankers, head in the 1970s of First National City Bank, later Citicorp He was an adamant believer in laissez-faire economics—minimal government intervention He revolutionized banking by circumventing and often ignoring New Deal regulations Financial deregulation started with him, but three times in thirty years the bank he built nearly went out of business due to the hundreds of millions of dollars of bad loans it made, saved only by federal intervention The story of Citibank runs through this entire history Not all those who are the principal focus of a chapter were blatant practitioners of greed—some not at all Tom Peters, the famed management consultant, was much the opposite Paul Volcker, the stringent chairman of the Federal Reserve, was mostly oblivious to nancial gain George Soros, the hedge fund manager, gave much of his fortune to causes that were detrimental to his personal nancial interest The age’s philosopher, Milton Friedman, was not intent on getting rich They all contributed importantly to this history, however These separate stories are integral parts of a large picture Ultimately, they t together Most of the people in this book were not wholly destructive History is never so simple Some were not destructive at all But most of those discussed here took the economy along an unfortunate, tragic path for their own purposes from which it may not be possible to turn back One REVOLUTION PROLOGUE Lewis Uhler BELIEVER E ver since the Gold Rush of the mid-1800s, California seemed a promised land to Americans The economy grew at prodigious rates, bene ting from the national expansion of the railroads, the discovery of oil, the birth of the movies, cheap plentiful farmland, and the appealing climate New Deal policies helped during the Great Depression After World War II, the underpinnings of the economy were agriculture and the defense industry, government the too easily forgotten partner to the region’s prosperity Businessmen created defense and aerospace giants with federal contracts to support the war in the Paci c theater State and local governments nanced critical public projects to bring invaluable water to the fertile farmlands of the south from the great rivers of the north and west The post–World War II American economy grew rapidly almost everywhere, but Southern California and, in particular, Orange County, grew faster still The ood of migrants from the Midwest needed new subdivisions of a ordable housing as well as new cars, appliances, supermarkets, and banks—and new roads, water systems, and sanitation To many citizens of the region, life was good and hard work and talent paid o beyond expectations Soon, to many of those who did well, prosperity was seen as the just reward of a determined and diligent populace Government programs—defense contracts, highways, water works, sanitation projects, primary schools, and high schools —were accepted as a right, social programs and high taxes an intrusion on the marketplace and personal freedom The seeds of America’s future took root in the soil of these counties Lewis Uhler was born in the Los Angeles area in 1933 and raised as a teenager in one of its up-and-coming suburbs His father, James, was a successful executive at Sunkist, whose principal suppliers were the politically conservative growers in California and Arizona Rousselot, John, prl.1 Rubin, Howie, 18.1, 18.2, 19.1, 19.2 Rubin, Robert, 4.1, 4.2, 5.1, 5.2, 14.1, 14.2, 14.3, 14.4, 14.5, 14.6, 14.7, 16.1, 16.2, 16.3, 16.4, 17.1, 17.2, 17.3, 19.1, 19.2, 19.3 Russia, 14.1, 14.2, 15.1, 15.2, 15.3, 15.4, 16.1, 19.1 Russian debt default (1998), 14.1, 14.2, 15.1, 15.2, 16.1, 19.1 Safra, Edmond St Germain, Fernand sales volume, 1.1, 12.1, 12.2, 16.1, 16.2, 16.3 Salomon, William Salomon Brothers, 1.1, 1.2, 3.1, 5.1, 6.1, 15.1, 15.2, 15.3, 16.1, 16.2, 17.1, 17.2, 17.3, 18.1, 18.2, 18.3, 18.4, 18.5, 18.6, 19.1, 19.2, 19.3 Salomon Smith Barney, 16.1, 17.1, 17.2, 17.3, 17.4, 17.5, 17.6, 17.7, 17.8 Sambol, David, 18.1, 18.2, 18.3 Samuelson, Paul, 2.1, 2.2, 19.1 Samuelson, Robert Sanford, Charles Sarbanes, Paul Sarbanes-Oxley bill, 17.1, 17.2 Saunders, Walter savings and loans (S&Ls), 6.1, 6.2, 11.1, 11.2, 12.1, 13.1, 13.2, 13.3, 14.1, 14.2, 17.1 18.1, 18.2, 18.3, 18.4, 19.1, 19.2, 19.3, 19.4, 19.5 Schlesinger, Arthur, Jr Schlesinger, James Schmidt, Helmut Scholes, Myron, 15.1, 15.2, 15.3 Schonfeld, Reese Schultze, Charles, 9.1, 9.2, 9.3, 9.4, 11.1 Schwartz, Alan Schwartz, Anna, 2.1, 2.2, 2.3, 2.4 Schwartz, Peter Schwarzman, Stephen, 4.1, 18.1 Screen Actors Guild (SAG), 7.1, 7.2 Sears, 5.1, 6.1, 8.1, 14.1 Secondary Mortgage Market Enhancement Act (1984) Securities and Exchange Commission (SEC), 1.1, 4.1, 5.1, 6.1, 8.1, 12.1, 13.1, 13.2, 13.3, 14.1, 15.1, 15.2, 15.3, 15.4, 15.5, 15.6, 16.1, 16.2, 17.1, 17.2, 17.3, 17.4, 17.5, 17.6, 17.7, 17.8, 17.9, 17.10, 18.1, 18.2, 18.3, 19.1, 19.2, 19.3 Securities Investor Protection Corp securitization, see mortgage-backed securities self-interest, 2.1, 5.1, 7.1, 7.2, 12.1, 13.1, 14.1, 14.2, 15.1 Senate, U.S., 10.1, 11.1, 11.2, 14.1, 14.2, 16.1 September 11th attacks (2001) Servan-Schreiber, Jean-Jacques service sector, 3.1, 12.1 Setting Limits (Uhler), prl.1 Shah of Iran, Mohammad Reza Pahlavi, 6.1, 6.2, 9.1 Shakespeare, William, 2.1, 2.2 Shapiro, Irving shareholders, 4.1, 4.2, 4.3, 4.4, 4.5, 5.1, 5.2, 5.3, 8.1, 11.1, 12.1, 12.2, 12.3, 12.4, 12.5, 12.6, 13.1, 15.1, 16.1, 17.1, 17.2, 17.3, 17.4, 18.1, 19.1 Shearson Hayden Stone, 16.1, 17.1 Shearson Loeb Rhoades, 6.1, 16.1, 16.2, 19.1 Sherman, Steve Shiller, Robert, 14.1, 14.2, 17.1, 17.2 Shorenstein, Walter short selling, 5.1, 15.1, 15.2, 15.3, 15.4, 15.5, 19.1, 19.2, 19.3, 19.4, 19.5 Showtime, 8.1, 8.2 Shultz, George, 3.1, 3.2, 3.3, 3.4, 6.1, 6.2, 9.1 Siegel, Herb Siegel, Martin, 4.1, 4.2, 5.1, 5.2, 12.1, 13.1, 13.2 Silberstein, Ben Silberstein, Muriel Silicon Valley, 12.1, 17.1 silver, 1.1, 6.1, 15.1, 15.2 Simon, William, 3.1, 3.2, 3.3, 6.1, 6.2, 18.1 Simons, Henry, 2.1, 2.2, 2.3, 2.4, 2.5, 2.6 Simons, James Sinatra, Frank Sirower, Mark Siva-Jothy, Christian Six Crises (Nixon), 3.1 Skilling, Jeffrey, 17.1, 17.2, 17.3, 17.4, 17.5 Slater, Robert Smith, Adam, 1.1, 2.1, 5.1, 7.1 Smith, Howard K Smith, Roger Smith Barney Social Security, itr.1, prl.1, 2.1, 2.2, 3.1, 3.2, 3.3, 7.1, 7.2, 7.3, 11.1, 11.2, 14.1, 14.2, 14.3 Sony, 8.1, 12.1, 12.2 Soros, George, 15.1, 15.2; British pounds traded by, 15.3, 15.4, 15.5, 15.6, 15.7; financial strategy of, 15.8, 15.9, 15.10, 15.11, 15.12, 19.1; hedge funds managed by, 15.13, 15.14, 15.15, 15.16, 15.17, 15.18, 15.19, 15.20, 17.1, 18.1; Hungarian background of, 15.21, 15.22, 15.23; inside information and, 15.24, 15.25, 15.26, 15.27; legal problems of, 15.28, 15.29, 15.30; in London, 15.31, 15.32; philanthropy of, x–xi, 15.33, 15.34; political views of, 15.35, 15.36; profits of, 15.37, 15.38, 15.39; reputation of, x–xi, 15.40, 15.41, 15.42, 15.43; risk assumed by, 15.44, 15.45, 15.46; SEC investigation of, 15.47; in stock arbitrage, 15.48, 15.49, 15.50, 15.51, 15.52; wealth of, x–xi, 15.53, 15.54, 15.55, 15.56, 15.57 Soros, Tivadar, 15.1, 15.2, 15.3 Soros Fund South America, 3.1, 6.1, 6.2, 6.3, 6.4, 8.1, 11.1, 16.1, 19.1 Southern Democrats, 3.1, 10.1, 11.1 Soviet Union, prl.1, prl.2, prl.3, 3.1, 3.2, 7.1, 7.2, 7.3, 11.1, 15.1, 19.1 Spector, Warren speculation, 1.1, 1.2, 2.1, 2.2, 4.1, 6.1, 11.1, 12.1, 14.1, 14.2, 14.3, 14.4, 15.1, 15.2, 15.3, 15.4, 16.1, 17.1, 17.2, 17.3, 18.1, 18.2, 18.3, 19.1, 19.2, 19.3, 19.4, 19.5, 19.6, 19.7 Spencer, Herbert Sperling, Gene Spiegel, Thomas, 13.1, 13.2, 13.3 Spielberg, Steven Spitzer, Eliot, 15.1, 16.1, 17.1, 17.2, 19.1 spreads, 1.1, 13.1, 19.1, 19.2, 19.3 Sprinkel, Beryl stagflation, 2.1, 2.2, 3.1, 3.2, 15.1 Standard & Poor’s 500, 1.1, 3.1, 4.1, 6.1, 6.2, 12.1, 15.1, 15.2, 15.3, 16.1, 17.1, 17.2, 19.1, 19.2 Standard Oil of California (Socal), 13.1, 13.2 Steagall, Henry Bascom Stein, Herbert, 2.1, 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 10.1, 14.1, 19.1 Stein, Jules, 7.1, 7.2 Steinberg, Saul, 13.1, 16.1 Steinhardt, Michael, 15.1, 15.2, 15.3, 15.4 Stevenson, Adlai Stewart, James Stigler, George, 2.1, 2.2, 7.1 Stockman, David stock market, 1.1, 1.2, 1.3, 1.4, 1.5, 1.6, 1.7, 2.1, 2.2, 3.1, 3.2, 3.3, 3.4, 4.1, 6.1, 9.1, 11.1, 12.1, 12.2, 13.1, 14.1, 14.2, 14.3, 14.4, 14.5, 14.6, 14.7, 15.1, 16.1, 19.1 stock market crash (1929) stock market crash (1987), 11.1, 14.1, 14.2, 15.1, 16.1, 16.2, 16.3, 18.1, 19.1 stock market crash (2000), 14.1, 17.1, 18.1, 19.1 stock options, 1.1, 5.1, 12.1, 12.2, 13.1, 15.1, 16.1, 17.1, 18.1, 18.2, 19.1 stock parking stock portfolios, 4.1, 6.1, 15.1, 15.2, 16.1, 19.1, 19.2, 19.3 stock prices, 4.1, 4.2, 4.3, 4.4, 5.1, 5.2, 6.1, 6.2, 6.3, 8.1, 8.2, 11.1, 12.1, 12.2, 12.3, 12.4, 12.5, 12.6, 12.7, 12.8, 12.9, 13.1, 13.2, 13.3, 13.4, 13.5, 14.1, 15.1, 15.2, 15.3, 15.4, 15.5, 15.6, 15.7, 15.8, 15.9, 16.1, 16.2, 16.3, 16.4, 17.1, 17.2, 17.3, 17.4, 17.5, 17.6, 17.7, 17.8, 17.9, 17.10, 18.1, 18.2, 18.3, 19.1, 19.2, 19.3, 19.4, 19.5 Stone, Amey Storer Communications, 13.1, 13.2 Strauss, Robert structured investment vehicles (SIVs) subprime mortgages, 12.1, 14.1, 16.1, 18.1, 19.1, 19.2, 19.3, 19.4 Sullivan, Scott Summers, Lawrence, 14.1, 14.2, 14.3, 16.1 supply and demand, 2.1, 2.2, 2.3, 3.1 supply-side economics, 6.1, 10.1, 11.1 Supreme Court, U.S., prl.1, prl.2, 3.1, 7.1, 10.1, 17.1 swaps, 16.1, 17.1, 17.2, 19.1 Sword, William, 4.1, 4.2 Taft, Robert takeovers, corporate, 4.1, 4.2, 8.1, 11.1, 12.1, 12.2, 12.3, 12.4, 13.1, 13.2, 13.3, 13.4, 14.1, 14.2, 15.1, 16.1, 16.2, 16.3, 17.1, 19.1 Tannin, Matthew, 19.1, 19.2, 19.3, 19.4 taxation: brackets for, 3.1, 9.1, 10.1, 10.2, 11.1, 11.2; capital gains, 14.1; corporate, 9.2, 9.3, 14.2, 15.1, 15.2, 17.1, 17.2, 18.1, 18.2; credits for, 2.1, 3.2, 9.4, 9.5; cuts in, prl.1, 2.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 6.1, 7.1, 7.2, 9.6, 9.7, 9.8, 10.3, 11.3, 11.4, 11.5, 11.6, 11.7, 14.3, 14.4, 19.1; deductions for, 9.9, 9.10, 14.5, 17.3, 18.3, 18.4; increases in, 3.9, 14.6, 14.7, 14.8; interest equalization, 11.8, 15.3; “negative income,” 42, 2.3; payroll, 3.10, 11.9, 14.9; personal income, ix–x, prl.1, prl.2, prl.1, 2.4, 2.5, 2.6, 3.11, 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 10.4, 10.5, 10.6, 11.10, 11.11, 11.12, 11.13, 14.10, 14.11, 14.12, 19.2; populist revolt against, ix–x, prl.1, 7.10, 10.7; progressive, itr.1, prl.1, prl.2, prl.3, 2.7, 2.8, 2.9, 19.3; property, prl.1, 7.11, 10.8; regressive, 11.14, 14.13; revenues from, 3.12, 6.2, 10.9, 11.15, 14.14, 14.15, 19.4; shelters from, 15.4, 15.5 Tax Reduction Task Force Tax Reform Act (1986) Taylor, Frederick Winslow Taylor, Robert technology, x, 1.1, 2.1, 2.2, 4.1, 8.1, 8.2, 8.3, 12.1, 14.1, 14.2, 14.3, 15.1, 15.2, 15.3, 15.4, 16.1, 17.1, 17.2, 17.3, 17.4, 17.5, 17.6, 17.7, 17.8, 17.9, 17.10, 18.1, 18.2, 19.1, 19.2, 19.3, 19.4; see also computers TED spreads, 19.1, 19.2, 19.3 Tele-Communications, 8.1, 8.2, 12.1 Telecommunications Act (1996) telecommunications industry, 4.1, 8.1, 8.2, 17.1, 17.2, 17.3, 17.4, 19.1, 19.2 television, 2.1, 2.2, 3.1, 7.1, 7.2, 8.1, 8.2, 10.1, 12.1, 12.2, 12.3, 12.4, 12.5, 13.1, 13.2, 17.1, 17.2, 17.3 Tenenbaum, L Jay Tennessee Valley Authority (TVA) term trusts Thailand, 14.1, 15.1 Thatcher, Margaret Theory X Theory Y Tiger Fund, 15.1, 15.2 Time Inc, 8.1, 8.2 Time Warner, 8.1, 8.2, 12.1 Time Warner Cable Tisch, Laurence, 8.1, 15.1 Tobin, James, 2.1, 19.1 Townsend-Greenspan, 14.1, 14.2 Toyota, 12.1, 12.2 tranches, mortgage, 18.1, 19.1, 19.2, 19.3, 19.4 transportation infrastructure, prl.1, prl.2, 1.1, 2.1, 9.1, 9.2, 14.1, 14.2, 19.1, 19.2 Travelers Insurance, 15.1, 15.2, 16.1 Treasury, British, 2.1, 15.1, 15.2 Treasury bills, 1.1, 1.2, 2.1, 6.1, 6.2, 6.3, 9.1, 9.2, 9.3, 9.4, 9.5, 11.1, 14.1, 14.2, 15.1, 15.2, 15.3, 18.1, 18.2, 18.3, 19.1, 19.2, 19.3, 19.4, 19.5, 19.6, 19.7 Treasury Department, U.S., 2.1, 2.2, 3.1, 3.2, 6.1, 6.2, 6.3, 9.1, 11.1, 11.2, 14.1, 14.2, 14.3, 15.1, 15.2, 16.1, 16.2, 19.1, 19.2, 19.3, 19.4, 19.5 Troubled Asset Relief Program (TARP), 19.1, 19.2, 19.3, 19.4 Truman, Harry S., prl.1, prl.2, 7.1 Trump, Donald Tsai, Gerald Tudor Investment Tunney, John, 7.1, 7.2 Turner, Ed Turner, Ted, 8.1, 8.2, 8.3, 8.4, 8.5, 13.1 Turner Broadcasting Network (TNT), 8.1, 8.2, 8.3 Tuttle, Holmes Twentieth Century Fox, 7.1, 8.1, 8.2 Two Lucky People (Friedman and Friedman), 2.1 Tyco, 17.1, 17.2 Tynan, Kenneth UBS, 19.1, 19.2, 19.3, 19.4 Uhler, James Carvel, prl.1, prl.2 Uhler, Lewis, ix–x, prl.1, prl.2, 2.1, 7.1, 7.2 underwriters, 1.1, 6.1, 13.1, 13.2, 16.1, 16.2, 16.3, 17.1, 17.2, 17.3, 17.4, 17.5, 17.6, 17.7, 18.1, 19.1 unemployment insurance, 2.1, 2.2, 7.1 unemployment rate, prl.1, 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 3.1, 3.2, 4.1, 6.1, 8.1, 8.2, 9.1, 9.2, 9.3, 9.4, 9.5, 10.1, 11.1, 11.2, 11.3, 11.4, 12.1, 12.2, 12.3, 14.1, 14.2, 14.3, 14.4, 14.5, 17.1, 19.1, 19.2, 19.3, 19.4, 19.5, 19.6 United Technologies, 4.1, 5.1 Unruh, Jesse Updike, John uranium, 4.1, 5.1, 14.1 Utah International, 4.1, 5.1, 5.2, 12.1, 12.2 Value at Risk (VAR), 15.1, 15.2, 15.3, 15.4, 15.5, 17.1, 17.2 Vanguard Funds Van Horn, Rob Versailles, Treaty of (1919) Veterans Administration (VA), 18.1, 18.2 Viacom, 8.1, 16.1 Vietnam War, prl.1, 1.1, 2.1, 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 7.1, 10.1, 12.1, 19.1 Vilar, Alberto Viner, Jacob, 2.1, 2.2 Vinson & Elkins Volcker, Paul, 11.1, 11.2; background of, 3.1, 6.1, 11.3; in Carter administration, 11.4, 11.5, 11.6; as Federal Reserve chairman, itr.1, 6.2, 6.3, 6.4, 9.1, 9.2, 11.7, 13.1, 13.2, 13.3, 14.1, 15.1, 18.1, 19.1, 19.2; Greenspan compared with, 14.2, 14.3, 14.4, 14.5, 14.6; inflation policy of, 6.5, 6.6, 6.7, 6.8, 9.3, 11.8, 11.9, 11.10, 11.11, 11.12, 11.13, 11.14, 11.15, 11.16, 11.17, 14.7, 14.8; interest rates policy of, 6.9, 6.10, 9.4, 11.18, 11.19, 11.20, 11.21, 11.22, 15.2, 18.2, 18.3; in Reagan administration, 11.23, 11.24, 11.25; tax policy of, 11.26, 11.27, 11.28; as Treasury undersecretary, 3.2, 3.3, 6.11, 6.12, 6.13, 9.5, 9.6; unemployment rate and, 11.29, 11.30 Voorhis, Jerry Vranos, Michael, 12.1, 18.1 Wachtel, Paul wage controls, 2.1, 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 14.1 wage levels, itr.1, prl.1, prl.2, prl.3, 1.1, 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 4.1, 4.2, 8.1, 8.2, 9.1, 9.2, 9.3, 10.1, 10.2, 11.1, 11.2, 11.3, 11.4, 11.5, 12.1, 12.2, 13.1, 14.1, 14.2, 14.3, 16.1, 17.1, 17.2, 19.1, 19.2 Walker, Charls Wall, Danny Wallace, George Wallich, Henry Wall Street, x, 1.1, 1.2, 1.3, 1.4, 3.1, 4.1, 6.1, 8.1, 8.2, 8.3, 9.1, 9.2, 9.3, 11.1, 12.1, 12.2, 12.3, 12.4, 13.1, 13.2, 13.3, 13.4, 13.5, 14.1, 14.2, 14.3, 14.4, 14.5, 15.1, 15.2, 15.3, 15.4, 15.5, 15.6, 16.1, 16.2, 16.3, 16.4, 16.5, 16.6, 17.1, 17.2, 18.1, 19.1, 19.2, 19.3, 19.4, 19.5, 19.6, 19.7, 19.8, 19.9, 19.10, 19.11, 19.12, 19.13, 19.14 Wall Street Journal, 2.1, 6.1, 16.1, 16.2, 17.1, 17.2 Wal-Mart, 8.1, 8.2 Walras, Léon Walters, Barbara Walton, Bud Walton, Sam, 8.1, 8.2, 12.1 Warner, Douglas, III Warner-Amex Cable, 8.1, 8.2 Warner Bros., 7.1, 8.1, 8.2 Warner Bros.-Seven Arts, 8.1, 8.2 Warner Communications, 8.1, 8.2, 8.3, 8.4, 8.5, 12.1 Warren, Earl, prl.1, 10.1 Washington Consensus Wasserman, Lew, 7.1, 7.2, 8.1 Wasserstein, Bruce, 4.1, 16.1 Watergate scandal, 3.1, 3.2, 3.3, 3.4, 3.5, 9.1, 10.1, 14.1 Waterman, Robert, 12.1, 12.2, 12.3 Watkins, Sherron Waxman, Henry Weaver, Karen Weidenbaum, Murray, 3.1, 9.1, 11.1 Weill, Jessica Weill, Joan, 16.1, 16.2, 16.3, 16.4 Weill, Marc Weill, Max Weill, Sanford I “Sandy,” 286–317, 16.1, 19.1; acquisitions strategy of, 16.2, 16.3, 16.4, 16.5, 17.1; on American Express board, 16.6, 17.2; background of, 16.7; back office expertise of, 16.8, 16.9, 16.10, 16.11, 16.12, 16.13, 16.14, 16.15; as brokerage trader, 16.16; on Citicorp and Citigroup boards, 16.17, 16.18, 16.19, 16.20, 17.3, 17.4, 19.2, 19.3, 19.4, 19.5, 19.6; costs cut by, 16.21, 16.22, 16.23, 16.24, 16.25, 16.26, 16.27, 16.28; deregulation supported by, 16.29, 16.30, 16.31, 17.5, 17.6, 17.7; as Hayden Stone partner, 16.32; investment strategy of, 16.33, 16.34, 16.35, 16.36, 16.37, 16.38; Jewish ancestry of, 16.39, 16.40, 16.41, 16.42, 16.43, 16.44; layoffs by, 16.45, 16.46, 16.47, 16.48, 16.49; legal problems of, 16.50, 16.51, 16.52, 16.53, 17.8, 17.9, 17.10, 17.11; managerial style of, 16.54, 16.55, 16.56, 16.57, 16.58, 16.59, 16.60; personality of, 16.61, 16.62, 16.63, 16.64, 16.65, 16.66, 16.67, 16.68, 16.69, 16.70; philanthropies of, 16.71, 16.72, 17.12, 17.13; on Primerica board, 16.73, 16.74, 16.75; profits of, 16.76, 16.77, 16.78, 16.79, 16.80, 16.81, 16.82, 16.83, 16.84; reputation of, 16.85, 16.86, 16.87, 16.88, 16.89, 16.90, 16.91, 16.92, 17.14, 17.15; at Salomon Brothers, 15.1; SEC investigations of, 16.93, 16.94, 17.16; at Shearson Hayden Stone, 16.95, 17.17; Shearson Loeb Rhoades directed by, 16.96, 16.97, 19.7; stock market trends and, 16.98, 16.99, 16.100, 16.101, 16.102, 16.103, 16.104, 16.105, 16.106, 16.107, 16.108; as Travelers Insurance CEO, 15.2, 15.3, 16.109; wealth of, 16.110, 16.111, 16.112, 16.113, 16.114, 16.115, 16.116, 16.117, 16.118, 16.119, 16.120, 17.18, 19.8; Wriston compared with, 16.121 Welch, Jack, 12.1, 12.2; acquisitions strategy of, 12.3, 12.4, 12.5, 12.6, 16.1; background of, 12.7; competitiveness of, 12.8; employee relations of, 12.9, 12.10, 12.11, 12.12, 12.13; financial services developed by, 12.14, 12.15, 12.16, 12.17; as General Electric CEO, 12.18, 12.19, 12.20, 12.21, 16.2, 16.3, 17.1; Hudson River cleanup opposed by, 12.22; management style of, 12.23, 13.1; profits of, 12.24, 12.25, 12.26, 12.27, 12.28; reputation of, 12.29, 12.30, 12.31, 12.32, 12.33; stock price increased by, 12.34, 12.35, 12.36, 12.37, 12.38, 12.39, 12.40, 12.41; wealth of, 12.42, 12.43, 12.44, 12.45 Welch, Robert, prl.1 welfare programs, itr.1, prl.1, prl.2, prl.3, 2.1, 3.1, 7.1, 7.2, 7.3, 7.4, 7.5, 10.1, 11.1 Wells Fargo, 18.1, 19.1 Werblin, Sonny Where’s the Rest of Me? (Reagan), 7.1, 7.2, 7.3 Whyte, William Wigmore, Barrie Williams, Harrison Williams Act (1968), 4.1, 13.1 William Volker Charitable Fund, 2.1, 2.2 Wills, Garry, 3.1, 7.1, 7.2, 7.3 Winnick, Gary, 17.1, 17.2 Witness (Chambers), 7.1 Wojnilower, Albert, 1.1, 1.2, 1.3, 9.1, 11.1 working class, 7.1, 7.2, 7.3, 7.4, 7.5, 9.1, 10.1, 16.1 working conditions, itr.1, prl.1, 12.1, 12.2, 12.3, 12.4 World Bank, 6.1, 6.2 WorldCom, 16.1, 17.1, 17.2, 17.3, 17.4, 17.5, 17.6, 17.7, 17.8, 19.1, 19.2 World War I, 2.1, 11.1 World War II, itr.1, prl.1, prl.2, 1.1, 2.1, 2.2, 2.3, 2.4, 3.1, 3.2, 3.3, 7.1, 7.2, 8.1, 15.1 Wright, Robert, 12.1, 12.2 Wriston, Henry, 1.1, 1.2 Wriston, Walter, 1.1, 1.2, 6.1, 6.2; background of, 1.3, 1.4; as banker, 1.5, 4.1, 5.1, 6.3, 6.4, 11.1, 12.1, 12.2, 12.3, 16.1, 16.2, 16.3; as Citibank and Citicorp CEO, itr.1, 1.6, 6.5, 11.2, 16.4, 19.1; economic views of, itr.1, 1.7, 1.8, 6.6, 6.7, 6.8; as First National City CEO, 1.9, 1.10, 15.1, 16.5; Friedman’s influence on, 1.11, 1.12, 6.9; government regulation opposed by, itr.1, 1.13, 6.10, 6.11, 6.12, 6.13, 9.1; LCD debts approved by, 6.14; New Deal as viewed by, itr.1, 1.14; Regulation Q opposed by, 6.15, 6.16, 9.2; reputation of, 1.15, 6.17, 6.18; Weill compared with, 16.6 Wyman, Jane, 7.1, 7.2 Wynn, Steve, 13.1, 13.2 Xerox Corp., 1.1, 14.1, 19.1, 19.2 Yellen, Janet, 14.1, 14.2, 14.3 Yom Kippur War, 3.1, 19.1 Young Americans for Freedom, prl.1 Zandi, Mark, 14.1, 19.1, 19.2 Zarb, Frank, 16.1, 16.2 Zweig, Phillip ILLUSTRATION CREDITS prl.1 LEWIS UHLER: Terry Ashe / TIME LIFE Pictures / Getty Images 1.1 WALTER WRISTON: Ralph Morse / TIME LIFE Pictures / Getty Images 2.1 MILTON FRIEDMAN: AP Photo 3.1 RICHARD NIXON: Bettmann / CORBIS 4.1 JOE FLOM: Rob Rich / Getty Images 5.1 IVAN BOESKY: Misha Erwitt / NY Daily News Archive via Getty Images 6.1 WALTER WRISTON: Bettmann / CORBIS 7.1 RONALD REAGAN: Courtesy Ronald Reagan Library 8.1 TED TURNER: Cynthia Johnson / Liaison / Getty Images 8.2 SAM WALTON: Eli Reichman / TIME LIFE Pictures / Getty Images 8.3 STEVE ROSS: Richard Corkery / NY Daily News Archive via Getty Images 9.1 JIMMY CARTER: AP Photo / Harvey Georges 10.1 HOWARD JARVIS: AP Photo / Lennox McLendon 11.1 PAUL VOLCKER: AP Photo / Stf 12.1 TOM PETERS: Roger Ressmeyer / CORBIS 12.2 JACK WELCH: Reuters / Landov 13.1 MICHAEL MILKEN: Ed Molinari / NY Daily News Archive via Getty Images 14.1 ALAN GREENSPAN: Paul J Richards / AFP / Getty Images 15.1 GEORGE SOROS: AP Photo / Wilfredo Lee 15.2 JOHN MERIWETHER: James Leynse / CORBIS 16.1 SANDY WEILL: Susan Steinkamp / CORBIS 17.1 JACK GRUBMAN: Shawn Thew / AFP / Getty Images 17.2 FRANK QUATTRONE: AP Photo / Louis Lanzano 17.3 KEN LAY: AP Photo / Kenneth Lambert 18.1 ANGELO MOZILO: AP Photo / Susan Walsh 19.1 JIMMY CAYNE: Sarah A Friedman / Contour by Getty Images 19.2 RICHARD FULD: Karen Bleier / AFP / Getty Images 19.3 STAN O’NEAL: AP Photo / Kathy Willens 19.4 CHUCK PRINCE: Chip Somodevilla / Getty Images A NOTE ABOUT THE AUTHOR Je Madrick is editor of Challenge magazine, former contributing economics columnist at The New York Times, and a regular contributor to The New York Review of Books He is a senior fellow at the Roosevelt Institute and at the Schwartz Center for Economic Policy Analysis, The New School He teaches at The Cooper Union ALSO BY JEFF MADRICK The Case for Big Government Why Economies Grow: The Forces That Shape Prosperity and How to Get Them Working Again The End of Affluence: The Causes and Consequences of America’s Economic Decline Taking America: How We Got from the First Hostile Takeover to Megamergers, Corporate Raiding and Scandal EDITED BY JEFF MADRICK Unconventional Wisdom: Alternative Perspectives on the New Economy ... Books, and the colophon are registered trademarks of Random House, Inc Library of Congress Cataloging-in-Publication Data Madrick, Jeffrey G Age of greed : the triumph of finance and the decline of. .. greed since the 1970s was not the result of the inevitable forces of history or of a natural swing of a political pendulum The new age was made by people, and how they reacted to crisis and change... in the Paci c theater State and local governments nanced critical public projects to bring invaluable water to the fertile farmlands of the south from the great rivers of the north and west The