Book review: Eliot Spitzer's capitalist manifesto

You can't make it in mainstream politics in the United States without trumpeting your capitalist credentials. But behind the apparent consensus are two almost irreconcilable visions that are paralyzing politics in Washington.

Does your capitalism espouse strong government, tough regulations and a tax system that seeks to improve the lot of society's poorest? Or do you believe in small government, self-regulation and taxation that doesn't "penalize" hard work?

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This is the debate that Eliot Spitzer, New York's former governor, attorney general, and Democratic hopeful for New York City comptroller, jumps into in his new book, "Protecting Capitalism - Case by Case." (Rosetta Books, USD 17.95)

It's no surprise which side Spitzer is backing. As attorney general from 1999 to 2006, he earned the moniker the "Sheriff of Wall Street" for going after dubious practices at mortgage lenders and big banks.

"Protecting Capitalism" traces Spitzer's career in a series of anecdotes - from his time as a newly minted prosecutor taking down the Gambino family, who controlled New York's garment and trucking industries - to battles with Wall Street banks.

The book portrays Spitzer as theorist, politician and lawyer, a man who can develop a big vision of what society should be, link it to nitty-gritty policy minutiae, and deliver it.

It is the manifesto of a politician trying to resurrect his career after his abrupt resignation in the wake of a sex scandal.

Readers looking for a tell-all, revealing details about his liaisons with prostitutes that forced his resignation as New York governor in 2008, will be disappointed. His infidelity is cryptically referenced in a discussion about fiduciary responsibility.

"I am not blind to the fair claim that I, in a very public way, failed to respect a fiduciary obligation that is perhaps even more central," Spitzer wrote.

Central to Spitzer's thesis is that American history took a wrong turn in 1981. Ronald Reagan's presidency heralded the ascendance of a radical deregulation agenda, a "market-based ideology that swept our nation." The result was the market cataclysm that occurred in 2008, Spitzer wrote. He does not assign any blame to Democratic President Bill Clinton, who repealed the Glass-Steagall Act and exempted credit default swaps from regulation.

As comptroller, Spitzer wants to channel the power of small shareholders that he believes has been usurped by a small group of intermediaries in the mutual fund business.

"We own Wall Street," is Spitzer's rallying cry, citing data that shows growing stock ownership over the last century, from 1 percent of the population in 1900 to 52 percent by 1998. He talks about leveraging that power to drive a progressive agenda, from getting big business out of political lobbying to reining in "imperial CEOs."

But do "we" own enough of Wall Street to make a difference? Spitzer's book includes a chart that shows 20 percent of the population owns 93 percent of the nation's wealth.

Despite its witty, insightful anecdotes and intelligent arguments, "Protecting Capitalism" is a bit of a ragtag collection, resembling, at times, an Economics or Finance 101 lecture, a political treatise, and a self-help manual.