We'll need a brand new set of villains when this boom ends

At the end of the 1980s, a number of big names on Wall Street went to jail, and everyone immediately found sinister those very financiers they had spent the past few years worshipping. The public mood turned on a dime, and no one, apart from the writer Tom Wolfe, ever really bothered to try to explain why.

One idea, popular with police types, is that it simply took the cops a few years to catch up with the bandits. Once the bad guys on Wall Street had been apprehended and exposed, the public changed its mind about them.

Another notion, a favourite of the B movie imagination, is that 1980s financiers became more sinister as they became more successful. Although honest and sincere at the outset, they succumbed to hubris and then were caught and punished.

A third thought - which was, more or less, Wolfe's argument - is that these sensational bursts of animal spirits to which we Americans are prone, tend to be followed by only slightly less sensational bursts of guilt and retribution. When a glorious boom ends - even, as in the late 1980s and early 1990s, when the ending is false - everyone at once wakes up from their dream of personal prosperity. Our new, unpleasant feeling that someone stole our bag of candy creates a need for characters on whom we might plausibly blame the theft. The demand for crooks at the end of the boom creates its own supply. The vanities call forth their own bonfires.

This is an interesting thought. Those who are most admired for their role in our economy might ponder it. For it suggests that when the 1990s boom ends, as one day it surely must, there will be hell to pay. Who will pay it? Whose reputations will be destroyed by journalists? Who will be cast as villains in the film spectacular? Who will be hauled before US Senate committees to be loathed for behaviour that, at the moment, strikes all of us as unobjectionable, or, at least, capable of being ignored?

Here's a brief list of possibilities:

n Journalists who cover new companies. In July, the San Jose Mercury News suspended a computer industry gossip columnist after the Wall Street Journal reported that she had made $9,000 (pounds 5,625) from the "friends' list'' of the initial public offering of a Silicon Valley company. The friends' list allows a handful of connected people to buy stock in a company at the initial offering price. Any journalists who allows themselves to be put on a friends' list are also allowing themselves to be bribed.

Nevertheless, journalists who cover companies that are about to go public often accept such offers. I myself have been offered the chance to be on the friends' lists of companies I intended to write about by entrepreneurs who thought they were just being polite. It was the done thing. The Mercury News columnist explained that she had told her bosses about her sweet deal. None of them saw anything wrong with it - until the Wall Street Journal pointed it out. Journalists are small change, however. They make for minor villains. Which brings us to:

n Wall Street analysts who follow internet stocks. "Analyst'' is a euphemism for what these people now do for a living. What they do, in essence, is help boost the stock price of companies whose deals their firms have been paid a great deal to underwrite. No one cares about this conflict of interest as long as the market rises; just as no one cares about boosterish journalism written by journalists on the take, so long as the tips pan out.

But if the market falls, people will care a lot. The only thing that will save Wall Street analysts from a starring role in that film special is that, when they are examined closely, they will seem almost as embarrassingly small time as journalists. The public will demand to be shown the tycoons who, ultimately, controlled the journalists and the analysts. Which brings us to:

n Silicon Valley venture capitalists. They are the ones who dreamed up the friends' list in the first place, which they use to reward people they want to keep sweet. They play a big role in deciding which investment banks will underwrite their deals - and hence which analysts will plug their stocks. They also have a web of interests, often internally contradictory, that can easily be made to seem corrupt, even if it isn't. "No conflict, no interest" is a favourite aphorism of theirs, which strikes one, at this prosperous moment, as amusing. Just you wait.

n Michael Lewis, author of `Liar's Poker' and `The New New Thing', a forthcoming book about Silicon Valley, writes for Bloomberg News. His opinions do not necessarily represent those of Bloomberg News.