quiet days on wall street -- 1/3/22
Today's selection -- from Inside Money by Zachary Karabell. In the 1940s and 1950s, Wall Street was not the dominating industry it has since become:
"After the Depression and the reforms of the New Deal, the financial industry entered a long period of relative quiet. Not until 1954 did the Dow Jones Index, then the leading stock market indicator composed of the top thirty industrial companies, match the high it achieved in 1929. Traders made money, for sure, as did assorted brokerage firms and banks. But they did not make crazy money. In fact, in 1955, there were, according to Fortune, only thirty thousand executives in the entire country who made more than $50,000 a year (equivalent to about half a million dollars a year in today's coin). Wall Street pay scales were akin to what top executives made at companies such as Ford Motors and General Electric. It was a very good living, but it was not notably out of sync with the rest of the country. And pay in general even for the richest was a comprehensible multiple of the average, and not as it was before the Depression and again in the twenty-first century, hundreds of times the average.
"The postwar decades were times of immense change--the birth of television, the proliferation of air travel, the explosive growth of American suburbs, years of substantial economic expansion and population baby boom, the adoption of mainframe computers in multiple industries. But for Wall Street, it was a sleepy time. In the country as a whole, the economic engine hummed, making possible not only generous domestic spending but defense budgets greater than at any period in American history outside of full mobilization, as well as hefty foreign aid and development budgets. As the middle class grew in affluence and numbers, American corporations thrived, and manufacturing was in the enviable position of acting as the factory for a world that was rapidly rebuilding but still lagged behind the United States by a considerable margin. Wall Street, meanwhile, was but one industry among many, profitable, lucrative even, but by no means a standout."