It’s easy to see why people who are angry with the current dismal economic state of the country so often mistakenly place the blame for this situation on Wall Street. After all, hasn’t it become the national symbol for greed, wealth and corruption?
It kind of reminds me of the antiwar movement of the 1970s, when protesters would turn their misplaced anger on returning Vietnam Vets instead of those truly responsible for subjecting us to a war we shouldn’t have fought (even the late Secretary of Defense Robert McNamara owned up to that mistake before he died).
And so it is with Wall Street. The problem is that Wall Street isn’t where most of the problems are. In reality, the great majority of people working on Wall Street aren’t super rich just like most of the people working in Hollywood aren’t super stars.
Most of the people on Wall Street are certainly not corrupt. Nor are they greedy. For the most part, they’re generous, hard-working folks just like the rest of us, and a lot of them are losing their jobs too. And that’s because the corporations and companies that sell their stocks and bonds on Wall Street are afraid to do what Wall Street does every day-take risks.
There’s a vicious cycle in the country that goes something like this. Companies are worried about an uncertain future where taxes may go up, new regulation could hinder production and ObamaCare could increase the cost of health benefits to employees, so they’re setting aside trillions of dollars in cash rather than risk hiring someone because they don’t know how much that hire is going to cost them.
Then, if profits aren’t as robust as they once were, some of those companies, at least the public ones, start laying people off because of their so-called responsibility to shareholders, thus adding to the army of unemployed, who then have to stop spending money, which in turn drags down future profits even more and on and on.
So instead of protesting against Wall Street, why not turn your anger to those companies that continue to lay thousands of people off and sit on trillions of dollars rather than take the risk of creating new jobs?
Why not turn some of that anger on Washington and the lawmakers who passed legislation that allowed banks to become “too big to fail”? Get angry at the SEC and other regulators who turned their heads even when the red flags popped up around swindlers like Bernie Madoff, or worse, the unindicted co-conspirators who sold worthless mortgages to unsuspecting investors while at the same time buying insurance against them that would pay off when they failed.
Turn your anger and frustration to your congressman or woman and, like Rolling Stone writer Matt Taibbi Matt Taibbi suggests, demand repeal of the Gramm-Leach-Bliley Act and mandate the separation of insurance companies, investment banks and commercial banks.
In fact, Taibbi has some other good suggestions as well, such as letting the “too big to fail” banks pay for their own bailouts by paying a 0.1 percent tax on all trades of stocks and bonds and a 0.01 percent tax on all trades of derivatives that would generate enough revenue to pay the American taxpayer back for the bailouts.
It would also deter what Taibbi calls “the endless chase for instant profits through computerized insider-trading schemes like High Frequency Trading, and force Wall Street to go back to the job it’s supposed to be doing-making sober investments in job-creating businesses and watching them grow.”
Matt, I couldn’t agree more.