A Piece of the Action
How the Middle Class Joined the Money Class
What's it about
Have you ever wondered how ordinary people started playing the stock market, using credit cards, and building wealth like the pros? Discover the untold story of the financial revolution that transformed the American middle class and opened the doors to the money class for everyone. This summary of A Piece of the Action reveals the key innovations, from the first credit card to the rise of mutual funds, that gave you access to the world of finance. You'll learn how this dramatic shift changed our relationship with money, debt, and investing forever.
Meet the author
Joe Nocera is an award-winning business journalist and columnist for prominent publications including The New York Times, Fortune, and Bloomberg Opinion. His extensive career chronicling the evolution of American business and finance provided him with a unique, front-row seat to a revolutionary shift. Nocera witnessed firsthand how Wall Street's innovations, once reserved for the elite, began to reshape the financial lives of everyday Americans, inspiring him to document this pivotal transformation in A Piece of the Action.
The Script
In the early 1970s, an airline executive named Frank Borman made a startling discovery. The company he ran, Eastern Airlines, was making more money from a single, obscure financial maneuver than it was from flying airplanes. The maneuver involved something called the 'float'—the time between when customers paid for their tickets and when the airline had to pay its own bills. For a brief, magical period, Eastern could invest that cash and earn interest, generating millions in pure, risk-free profit. This was the system. For generations, the complex, often baffling world of finance was a private club, a game played by large institutions and the very wealthy who understood its hidden rules and reaped its quiet rewards. For everyone else, money was simple: you earned it, you put it in a savings account that paid a pittance, and you hoped for the best. The idea that you, an ordinary person, could get a piece of that sophisticated action was unthinkable.
That fundamental shift, from a nation of simple savers to a nation of investors, debtors, and financial players, didn't happen by accident. It was a revolution, and it fascinated business journalist Joe Nocera. For years, as a columnist for outlets like Fortune and Esquire, he had a front-row seat to this transformation. He saw the rise of the credit card, the invention of the money market fund, and the creation of the 401. He realized these were cultural earthquakes that were radically reshaping American life, for better and for worse. Nocera wrote A Piece of the Action to tell the human story behind this revolution, tracking down the forgotten innovators and accidental pioneers who, in their quest for profit, ended up turning every American kitchen table into a miniature Wall Street trading desk.
Module 1: The Accidental Revolutionaries
The financial world we live in wasn't designed. It was hacked together by outsiders and opportunists. These innovators didn't set out to start a revolution. They were just trying to solve a problem or get around a rule.
The story begins with Bank of America. It was a populist institution, founded to serve "the little fellow." This made it the perfect place to pioneer mass-market credit. In 1958, the bank mass-mailed 60,000 unsolicited BankAmericards to residents of Fresno, California. This event, known as "The Drop," was the quiet start of the consumer credit explosion. The bank's leaders made a critical assumption. They believed credit card users would behave like their traditional loan customers. They were wrong. Delinquency rates soared to 22%, not the expected 4%. The launch was a disaster. But it revealed a powerful truth. The credit card's true innovation was transferring financial control from the bank to the individual. For the first time, customers could decide when, why, and how much to borrow, all with a piece of plastic. This was a radical departure from the old model of asking a loan officer for permission.
Then came the brokers. For decades, Wall Street was a club for the wealthy. Charles Merrill, founder of Merrill Lynch, had a different vision. He wanted to "bring Wall Street to Main Street." He put his brokers on salary to build trust. He advertised directly to small investors. Still, the system was rigid. The New York Stock Exchange enforced fixed commissions, keeping costs high. That changed on May 1, 1975, a day known as "Mayday." Regulators abolished fixed commissions. This opened the door for a new kind of firm.
This brings us to Charles Schwab. He was an entrepreneur who had already failed once. He saw an opportunity in the new, deregulated world. Schwab created a new model: the discount brokerage. His firm would execute trades cheaply and efficiently. It offered no advice. It gave no recommendations. The responsibility for investment decisions shifted entirely to the customer. This was another step in the transfer of financial power. Traditional firms like Merrill Lynch, with their high overhead and commissioned brokers, couldn't compete on price. They actually raised commissions for small investors, creating a price umbrella that allowed the discount industry to thrive.