Spitzer’s Legacy on Wall Street

Andrew Leonard mourns a (former) hero:

I cheered him on. He was the unexpected underdog who comes out of nowhere and starts landing one uppercut after another into the chins of a murderer’s row of 800-pound gorillas. We called him, here at Salon, "the most feared man on Wall Street," and we said it with respect. If only we could get someone like him in the White House — maybe then, we’d take care of some real business.

Oh well.

If I needed yet another lesson in why hero worship is always, invariably, a bad and stupid idea, I could not ask for one delivered to me on a bigger silver platter. The stupidity and arrogance implicit in Spitzer’s alleged involvement in a prostitution ring — which he hasn’t yet explicitly admitted to, but most certainly did not deny — betrays not just the trust of his family, but also of those who supported him for fighting the good fight. He’s not the man we thought he was — and in a profoundly depressing way, it somehow makes us a little less than we thought we were, for having bought into his chivalry.

And then, of course, there’s the other side of the coin: Wall Street hated Spitzer, with a vehemence rarely seen in an industry famed for its clubbable bankers.

The truth, as ever, is in the middle. Spitzer went after Wall Street’s bigshots not because he was a saint on a moral mission, but because he was a power-hungry alpha male with (as we now know) the kind of weaknesses which usually bedevil such men. On the other hand, someone needed to remind Wall Street that it did could not shaft its clients with impunity while raking in billion-dollar profits.

Spitzer’s discovery and use of the Martin Act changed the balance of power between the banks and the regulator-politicians for the foreseeable future, and changed it in the right direction. The bully has been brought to his knees, but the banks he bullied are still at least a little bit cowed, and on balance that’s probably no bad thing.

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