Why I left Goldman Sachs

Interesting look at the culture of Gokdman Sachs, by an insider.

5 moguls

T.J. Stiles says these mogul biographies offer rich rewards

1. Andrew Carnegie. Joseph Frazier Wall. Oxford, 1970

In the past few decades we have seen a sweeping reassessment of the so-called robber barons of the 19th and early 20th centuries. The trend began in 1970 with Joseph Frazier Wall's "Andrew Carnegie"—a groundbreaking work that remains a pleasure to read. By turns a thoughtful sifter of the evidence, a sharp and amusing portraitist, and a storyteller with real panache, Wall brings a gift for clarity to both historical context and the blow-by-blow of business battles. His tales of intrigue among Carnegie's partners are particularly vivid. Carnegie wore many guises—he got his start as an entrepreneur through sweetheart deals, proved a ruthlessly efficient steelmaker and aspired to influence world affairs—and this book artfully integrates them all.

2. The Life and Legend of Jay Gould. Maury Klein. Johns Hopkins, 1986

Jay Gould's "reputation for being cold and aloof," writes Maury Klein, "owed much to the fact that he was a shy, reserved man whose emotions registered on so small a scale, such as tearing bits of paper or tapping a pencil, that only initiates recognized them." Such insight and literary grace explain why Klein's "The Life and Legend of Jay Gould" remains the definitive work on this controversial tycoon. The author narrates with wry humor and verve such episodes as the corruption-riddled battle among financiers for control of the Erie Railroad in 1868 and Gould's attempt to corner the gold market in 1869. But Klein's greatest contribution may be in describing Gould's later years, when he proved a master corporate strategist, building an empire around the Missouri Pacific railroad.

3. Morgan  Jean Strouse. Random House, 1999

As America's leading banker, J.P. Morgan played a role unlike any other business titan of his age, influencing one industry after another. He reorganized the chaotic railroads and forged U.S. Steel and General Electric—in other words, he was the father of the trusts that others set out to bust. "When the federal government ran out of gold in 1895, Morgan raised $65 million and made sure it stayed in the Treasury's coffers," writes Jean Strouse in this elegant biography. "When a panic started in New York in 1907, he led teams of bankers to stop it." Strouse is masterly, whether addressing finance, family, art or the human condition. Her portrait of Morgan's first rare-book librarian, Belle da Costa Greene—the daughter of Harvard's first black graduate, she passed as Portuguese—is but one example of Strouse's literary gifts and appreciation for the importance of secondary characters in a good biography.

4. Fallen Founder. Nancy Isenberg. Viking, 2007

It is not easy to get a fair hearing when you have killed the man on the $10 bill. But Aaron Burr is treated with scholarly care and writerly sympathy by Nancy Isenberg in "Fallen Founder." A hero in the American Revolution and the country's third vice president, Burr founded the forerunner of J.P. Morgan Chase: the Manhattan Co., a water company and bank. He pioneered modern political methods by systematically identifying and organizing voters, contributors and activists. Isenberg offers evidence that Burr was no villain in the 1804 duel that killed Alexander Hamilton. Three years later, Burr was arrested for what his enemies called a conspiracy to set up an independent state in the west; he was tried for treason and exonerated, then went on to become an influential New York lawyer. An astonishing life.

5. Pulitzer. James McGrath Morris. Harper, 2010

Today's reporters and media tycoons would do well to study James McGrath Morris's life of Joseph Pulitzer, the journalist, editor and entrepreneur. A proverbial penniless immigrant (a German-speaking Hungarian Jew), Pulitzer fought for the Union in the Civil War, then moved to St. Louis. There he learned English and the news business. His rapid rise in journalism was interwoven with politics, a natural twist, since newspapers were overtly partisan. He briefly held elected office but found greatness as a newspaper owner. Morris is fascinating on Pulitzer as a working (make that hard-working) reporter and editor who understood how to grab his readers—and saw where his industry was going (or could go).

—Mr. Stiles is the author of "The First Tycoon: The Epic Life of Cornelius Vanderbilt," winner of the 2009 National Book Award and the 2010 Pulitzer Prize, now available in paperback from Vintage.Printed in The Wall Street Journal, page W8
22 May 2010

A Time to Remember

The Publisher. Alan Brinkley. Knopf, 531 pages, $35

Luce is one of the original 20th century right-wing blowhards who used his position in the media to push not objectivity but his own agenda. He did hire Margaret Bourke-White to shoot photogrpahs he included in Fortune magazine from its very beginning; her photogrpahs were also prominently published in Life magazine for many years.

Alan Brinkley's "The Publisher: Henry Luce and His American Century" marshals all the material for a devastating portrait of Luce as a bombastic, autocratic press lord who was full of idolatry for "Great Men" like Chiang Kai-shek and Gen. Douglas MacArthur and who made his magazines mouthpieces for his own ideology and obsessions. Instead, Mr. Brinkley has told Luce's saga with scrupulous fairness, compelling detail and more than a tinge of affection for his vast ambitions and vexing frailties. The author chronicles how Luce built the spindly Time into the world's greatest media empire of its era, with influence unmatched by any other American magazine. Still, Luce emerges as a man of manic energies and enthusiasms who, for all his fervent yearning to do good, bent the journalism of his magazines to propagandize for dubious crusades, most famously urging the "unleashing" of Chiang in the late 1940s to recapture a China lost to communism.

That was the sort of myth that the right wing of the Republican and Democratic parties used for years to bludgeon President Truman, FDR's memory and legacy, and subsequent Democrats: that they had lost China, as if it was for the US toi keep or lose.

at a "Turkish ball" at the Waldorf-Astoria in 1934, he met Clare Boothe, the bright, beautiful daughter of a kept woman, and Luce had a coup de foudre. For all his righteous scruples, he dumped his wife of more than a decade and mother of his children, embarking on a tempestuous marriage with Clare that lasted until his death in 1967. They competed with each other, cheated on each other, tormented each other and nearly divorced a dozen times.

[coup de foudre: a thunderbolt; a sudden, intense feeling of love.]

Perhaps it is from this man who ignored his own "righteous scruples" that Rudolf Guiliani learned the trick of dumping his wife and mother of his children for another woman. And after such effrontery to the morality they so busily lectured others on, and after violating its very basic tenets, they continued to appear in public without the least show of shame.


Mr. Brinkley, who teaches American history at Columbia University, neatly captures the tone of the couple's skyscraper-in-the-clouds idyll. Luce once bragged to Clare, the author of "The Women" and onetime U.S. ambassador to Italy, that he couldn't think of anyone who was his intellectual superior. Clare replied: What about Einstein? Well, countered Harry, Einstein was "a specialist."

Modet, too.

Clare had proposed a picture magazine called Life to Condé Nast—the man, not his company—when she worked as the managing editor of his Vanity Fair in the early 1930s. Luce had the same idea, and the triumph of Life gave him an unmatched pulpit where he could preach his increasingly right-wing vision for the U.S. and the world.

What a bully pulpit, too.

It was Luce's impatience with Franklin Roosevelt's tip-toeing into the war before Pearl Harbor that spurred him to take an active role in presidential politics. He fell hard for the Republican Wendell Willkie in 1940 and made his magazines such partisans of every successive GOP candidate for the White House that many of his editors despaired. Time Inc. magazines not only liked Ike, they slobbered over him. Luce did respect John F. Kennedy (although he backed Nixon) and succumbed to Lyndon Johnson's transparent flattery. An old-school anti-communist, Luce had "a strong distaste" for Joseph McCarthy, Mr. Brinkley writes, as a "crude and coarse man" whose "excesses threatened to discredit more legitimate anti-Communist activities," and the publisher never warmed up to Barry Goldwater's frontier conservatism.

Well, nt altogether a distasteful man, at any rate.


Mr. Brinkley has told the cautionary tale of the Luce Half-Century with the rigor, honesty and generosity that Luce's own magazines too often sacrificed to the proprietor's enormous ego and will to power.

Books on Finance During Trouble

1. The House of Morgan Ron Chernow. Atlantic Monthly, 1990. 332.12 C


Can a bank actually be heroic? Ron Chernow suggests as much in his exhaustive history of J.P. Morgan and its instrumental role in the development of the industrial Western economy from the late 19th century to the end of the 20th. But the clear-eyed Chernow does not ignore the less-than-heroic in this National Book Award-winning title, which is as much a social and political history as it is the story of the Morgan dynasty. Of the fallout from the Crash of 1873, Chernow writes: "Not for the last time, America turned against Wall Street with puritanical outrage and a sense of offended innocence." When World War I erupted: "Wall Street, which prided itself on its prescience, was once again caught napping by a historic event." Both tendencies remain in place today. What we do not have is a Wall Street king like John Pierpont Morgan, the man who built the banking dynasty and who had the power to intervene personally in the Panic of 1893 and save the U.S. Treasury by launching a syndicate to replenish the nation's gold supply.


[Emphasis added. Seems some things never change.]



2. The Go-Go Years.  John Brooks. Weybright & Talley, 1973. 332.645 B

Just as the stock market moves in cycles, even though each new generation seems to think each new high and low is happening for the first time, so, too, do market players often imagine that they're breaking new ground when most are not. Today's high-flyers are pretty much the same as those depicted by John Brooks in "The Go-Go Years," his account of how the stock market changed during the 1960s. At the very moment when stocks were truly going mainstream in America, Brooks produced one of the most enjoyable and insightful books ever written about the tribes and tactics of the stock market. Chronicling the escapades of almost-forgotten swashbucklers such as Gerald Tsai and Saul Steinberg, he produced incomparable observations about Wall Street's merry-go-round of triumph and tragedy. He describes 1968 as the year "Wall Street had become a mindless glutton methodically eating itself to paralysis and death," something that happened again in the period 2004-07. And what of our capacity to learn from our mistakes? "Reform is a frail flower that languishes in the hot glare of prosperity," he observes. Given that prosperity still looks a while off at this point in 2010, maybe reform will actually bloom.

3. The Bubble Economy. Christopher Wood. Atlantic Monthly, 1992. 332.6322 W

"What everybody knows is seldom worth knowing," begins "The Bubble Economy," an incisive, readable assessment of the Japanese real-estate boom and bust of the 1980s. Christopher Wood, the former Tokyo bureau chief for the Economist, writes with such flair that it's a shame he gave up journalism, becoming a financial analyst and the publisher of the newsletter Greed & Fear. His book has aged well; swap out names and institutions and it might have been written last year. "Isaac Newton actually arrived in Japan in 1990," Wood writes. "His presence did not prove a pretty sight in a country where too many people had concluded that the laws of gravity, when applied to their own financial markets, had somehow been suspended." Like a faded rock star, the 367-year-old Newton is back for another world tour.

4. When Genius Failed. Roger Lowenstein.  Random House, 2000. 332.6 L


A raft of books have been written—and are still being written—trying to explain the complex financial products, such as collateralized debt obligations and credit default swaps, behind the near collapse of Wall Street about 16 months ago. The last time something this complicated took the system to the brink, it was the crash in 1998 of the gigantic hedge fund Long-Term Capital Management, when its "relative value" trades went bad. Luckily Roger Lowenstein was on the case—there is no better writer for explaining the intricacies of finance in eminently understandable terms. His description of how Wall Street reached its precarious state in 1998, necessitating a rush to bail out LTCM, captures the birth of the "too big to fail" doctrine: "Almost imperceptibly, the Street had bought into a massive faith game, in which each bank had become knitted to its neighbor through a web of contractual obligations requiring little or no down payment." A decade later, we'd done it again. If more people had read "When Genius Failed," today's miseries might have been avoided.

5. Point of No Return. John P. Marquand. Little, Brown, 1949.  FIC Marquand

While Wall Street hardly has trouble generating stories that seem straight out of a novel, there are a handful of sublime works of fiction that capture the spirit of its strivers in ways that nonfiction cannot. These novels, like Tom Wolfe's excellent "Bonfire of the Vanities," show us what the traders were thinking as well as what they were doing. Nearly four decades before "Bonfire," John P. Marquand wrote "Point of No Return," a lost masterpiece that shines a bright light on the mind-set of that species of Banker Americanus that helped to build the modern financial-services edifice and that colonized suburbia. Marquand's protagonist, Charles Gray, managed not just to survive but to thrive in the 1929 stock market crash, the Depression and its aftermath, and he has collected an enviable set of trophies: the new house in Westchester County, the wife, the two kids and the country-club membership. But "Point of No Return" is hardly a cheerful success story. Instead, it's a gripping portrayal of a man obsessed with roads not taken and of the insecurities that lie just beneath a veneer of seeming achievement. "The more you get, the more afraid you get," says Gray. "Maybe fear is what makes the world go round."

— Mr. Duff McDonald is the author of "Last Man Standing: The Ascent of Jamie Dimon and JPMorgan Chase" (Simon & Schuster, 2009). He is a contributing editor at New York magazine.