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Joseph Nocera, A Piece of the Action: How the Middle Class Joined the Money Class (Simon & Schuster, 1994) Reissued by Touchstone Books in paperback in 1995. In 19 chronological chapters, Nocera tells the story of America's "money revolution" from the 1960s to the 1990s. The current editorial director of Fortune magazine even pins down the exact starting date: September 1958 in Fresno, California, when Bank of America sent out its first 60,000 credit cards to unsuspecting clients. The little plastic cards changed the way Americans did business, argues Nocera – and it changed the focus of the finance industry. The middle class suddenly became the industry's darling, after years of being sidelined in favor of the wealthier business clients. Over the next decades, banks provided mainstream America with a flurry of financial instruments formerly reserved for the wealthy. Credit cards democratized debt, as they provided the average American with an instant consumer credit for the first time. The rise of mutual funds gave the public a wider spectrum of investment. And discount brokers altered the way the middle class could make use of an investment strategy. Nocera describes how these financial instruments evolved. All these developments had a driving force: The inflation of the 1970s and early 1980s, which let bank savings shrink in value. This practically erased one lesson of the Great Depression. Saving now and spending later was no longer a sound strategy. Buying now and paying back later became the mantra that is still valid today. "There isn't another Western country that has relied so heavily on consumer credit," writes Nocera. Between 1958 and 1990, consumer debt has risen in every single year. In fact, debt has built the country. Sound like a dry lesson in financial history? In Nocera's narrative, it isn't. He tells his story with extensive profiles of the key people involved. The vivid portraits range from Charles Merrill, whose bank eased the middle class' evolution from savers to investors, to Charles Schwab, who established discount brokerage for the masses. Nocera's account has one drawback, however: It's a bit short on analysis. Nocera states in his introduction that this revolution "has been, in general, a force for good." But apart from his powerful argument of greater choice to the consumer, he offers little insight in how the increasing indebtedness of America might affect its future. What he does, however, is to deliver on his subtitle, "How the Middle Class Joined the Money Class." When the book was published in 1994, at the relative beginning of the stock market boom, reviewers marveled on his narrative. But many criticized that Nocera did not take his story one step further into analysis. Nocera told his story "admirably, with rare insight and considerable flair," wrote The New York Times. The Boston Globe called it a "lively and insightful history of the personal finance business." Kirkus called it a "wonderful pudding of a book," yet criticized the fact that Nocera never really defines the term "middle class" or offers a systematic account of U.S. financial history since 1958. MORE: Official Biography of Nocera from Fortune magazine, his current employer |
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