September 11, eight years later: Wall Street must rebuild again

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Eight years ago Friday, when two commercial airliners destroyed the World Trade Center, the message was clear. The U.S. had been attacked, yes -- but the heart of American capitalism, Wall Street, had been specifically targeted. The catastrophic destruction, the horrifying massacre, affected every major financial firm on Wall Street in the most personal and horrible way.

In the aftermath of the carnage, Wall Street bounced back with a mighty resilience, rising from the ashes to get back to work -- as if to prove that terrorists could wound us grievously but could never defeat our economy or our way of life. In the face of the attacks, Wall Street's determination to rebuild itself mirrored the nation's unity and defiance.
The most severe loss of life that day occurred at Cantor Fitzgerald, the brokerage house that suffered hundreds of casualties. But there were other wrenching losses: money-management firm Fred Alger Management lost 35 of 55 employees from its New York office -- everyone present in the building -- when the 93rd floor of the North Tower was destroyed.

Eight years later, Wall Street has been transformed again by financial crisis and the worst U.S. recession in decades. There's obviously no comparison between the terrorist attacks and the financial meltdown -- each was unique, one in agonizing death and destruction, the other in jobs, pensions, and livelihoods. But as it did before, the financial world and the nation must again unify to emerge from a new and different challenge: to beat the recession and build a new financial system that can prevent, or at least withstand, the economic shocks that ruined several august institutions last year.

On Thursday, John Mack, paragon of the old order, stepped down as the CEO of Morgan Stanley. Mack presided over Morgan Stanley during the shocks that rocked the markets for the past 18 month, bringing the nation to the brink of economic disaster. Since then, the locus of economic power has shifted from Wall Street to Washington, as the Obama administration seeks to crack down on executive pay, reckless leverage, and other excesses of the crisis.

What finance and the government needs to display today is common sense. We've seen enough of the industry's perverse incentives and outrageous gambling in recent years. Let's reward good performance and top talent, but as millions are suffering financially, Wall Street must abandon the idea that it's a class above everyone else.

After nearly two years of economic winter, green shoots are starting to appear. Major market indices are up more than 30 percent from their March lows. Corporate earnings have begun to show signs of life. And the dizzying growth of unemployment seems to be slowing. Even so, rebuilding a Wall Street to replace the old order won't be easy or fast. Eight years ago, our nation witnessed an amazing unity, unprecedented during most of our lifetimes, in a time of grief, anger, and hope. Now we're hurting again, and we need to unify again, to direct our strength toward rebuilding our crippled economy and laying the groundwork for a fiscally responsible future.

Follow Sam Gustin, a reporter at DailyFinance, at twitter.com/samgustin
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