Excerpt from A Capitalist’s Lament: How Wall Street Is Fleecing You and Ruining America by Leland Faust
Wall Street is fleecing you and ruining America. You may think Wall Street’s perpetual activity and financial innovations help the free-enterprise system, but in fact they cause irreparable harm to the country. This story of how Wall Street completely fools you as it skillfully makes a killing for itself, turning your money into theirs, is too vastly important to ignore. We will all continue to be at great risk and suffer if we do not force changes to this toxic system.
A Capitalist’s Lament: How Wall Street Is Fleecing You and Ruining America by Leland Faust
Investors, big and small, are continually being fleeced and have very few people on their side. Whether you have nothing to invest and are interested only in good public policy and consumer protection, or you have a nest egg of $10,000 or $10,000,000,000 (yes, many of the most wealthy are taken in, too), you need to know how the Wall Street system really works, how the benefits are distributed, how much risk is routinely taken, how Wall Street uses the media to promote its charade, and how it shamelessly misleads investors and the public.
If after reading this book you think the title is hyperbole, then I have failed in my mission. Wall Street has ingeniously convinced a large segment of the public that to oppose Wall Street is to be against the great American free enterprise system. Not so! I am a hard-core capitalist, but I am not an apologist for Wall Street’s horrendous behavior. I am not a populist trying to change our core beliefs. As an independent investment advisor, I’ve been both a West Coast outsider and a clear-eyed insider in the financial world. Unlike Ralph Nader and Michael Moore, who berate the system itself, I’m outraged precisely because I support our regulated but essentially free market economy. I’m not someone who failed and then rails. I’ve worked very successfully in the industry and observed it over my entire professional career. I know it inside and out. I have represented real people with their real money and financial lives on the line. I have had to make the tough decisions on the spot. I am not a journalist or an academic looking at events or the system with the luxury of hindsight.
This book is not about bashing the American economic system; it is about bashing business as usual on Wall Street. Too many people think that free enterprise, or capitalism, has failed. I completely disagree. The free enterprise system has produced the greatest amount of economic prosperity for the greatest number of people in history. If you don’t support free enterprise, please turn in your iPad and your smartphone, stop watching cable television, and never go to Google. Self-interest serves us all well. But selfish interest—taking advantage of the system by illegal or immoral actions—harms us all.
I am outraged that Wall Street constantly puts its own interests ahead of those of its customers and society. Smooth-talking yet well credentialed hucksters selling the false promise of easy gains have hijacked our system in order to earn higher fees for themselves. Wall Street continually makes outrageous predictions designed to impress you and entice you to buy. But it is mostly a giant casino where games of chance masquerade as investments. This culture of gambling exposes us all to risks that no one should take.
Let’s be clear. We are not talking about boiler-room operations and swampland shysters. We are talking about the largest, most prominent and renowned Wall Street players: brokerage firms, financial advisors, mutual fund complexes, financial center banks, insurance companies, analysts, consultants, rating agencies, government agencies, government-sponsored enterprises, the financial press and broadcast media, and many financial economists. When Wall Street firms and their employees forget whose interest they are supposed to protect and instead act only in their own selfish interest, the problem is not just unscrupulous or unethical behavior but the criminal practices that go with it.
Today Wall Street does not create wealth; it takes it from others. Wall Street’s unsavory tactics assume many guises—alluring comeons, airbrushed risks, high stakes gambling, distortions, half-truths, false promises, misleading statements, falsified research, outlandish predictions, white lies, bold lies, tricks to overcharge customers, bad deals, and outright fraud. The financial- services industry seduces Main Street investors—and surprisingly even the big players, including major corporations and other institutional investors— getting them to take chances that no one should ever consider.
Excerpted from A Capitalist’s Lament: How Wall Street is Fleecing You and Ruining America by Leland Faust. Copyright © 2016 Reprinted by permission of Skyhorse Publishing, Inc.
Leland Faust, author of A Capitalist’s Lament, has been in financial investment for nearly four decades, managing money for business executives, entertainers, and athletes. He founded CSI Capital Management in 1978 and managed a mutual fund which outperformed almost all of Wall Street. He has been profiled in the New York Times, Barron’s, Sporting News, San Francisco Chronicle, San Francisco Examiner, Sports Illustrated, The Wall Street Journal, and others. He has frequently appeared on the major network affiliates and on the financial cable networks. Faust lives in San Francisco, California.