America asks, is Wall Street wicked?

As another world recession looms, philip delves broughton wonders if it’s Wall Street’s fault

America's latest bout of economic conniptions has revived a question which has dogged the country since its founding: do we really need the money men? What if, tomorrow, Wall Street disappeared, leaving nothing but a pile of Blackberry devices and tasselled loafers? Would we be any worse off?

In his intriguing new book, Steve Fraser describes the compelling and often contradictory hold of Wall Street on America's imagination. One moment it is a temple of hyper-rational sophistication, a source of great national pride, the next a casino enabling investors to gamble away their wealth in moments of national insanity, such as the dotcom boom. Wall Street has acted like sugar on the hyper-active American mind, inducing manic mood swings and lunatic behaviour.

The he-men of Wall Street have always

maintained they are vital to American success. They juice America's farmers, manufacturers and entrepreneurs with stocks, bonds and their many derivatives, so globe-spanning businesses can be built. They spread wealth through financial innovation. This is how they earn their outlandish rewards.

But we have now reached a moment when those rewards seem to be concentrated in ever fewer hands. Instead of democratising wealth through widespread share ownership, Wall Street appears to have worked like a strangler vine on the sappy trunk of the American worker, draining him of his rightful rewards, and his morale.

What else could explain the pointy headed hedge fund manager making a billion dollars a year while the incomes of the stout-willed middle classes stagnate? How come, in every financial crisis, Wall Street's titans grow ever richer, while the millions who bought their voodoo face foreclosure and empty pension funds?

In every economic downturn, people ask where real economic value is created. Is it