Love letters straight from the Heart

Apparently this email made the rounds recently -- it's the swan song of the utopian capitalist, the death rattle of the "survival-of-the-fittest" individualist, the last gasp of the crass materialist. It is weird how detached Wall Street bankers are from the so-called "Main Street" lives they assume they will be leading. $85K per year? Four months vacation? The median household income in America is around $50K and three weeks vacation is the average for someone with 25 years in at their job. To which Main Street does Joe Wall Street think s/he'll be moving I wonder?

"We are Wall Street. It's our job to make money. Whether it's a commodity, stock, bond, or some hypothetical piece of fake paper, it doesn't matter. We would trade baseball cards if it were profitable. I didn't hear America complaining when the market was roaring to 14,000 and everyone's 401K doubled every 3 years. Just like gambling, its not a problem until you lose. I've never heard of anyone going to Gamblers Anonymous because they won too much in Vegas.

Well now the market crapped out, & even though it has come back somewhat, the government and the average Joes are still looking for a scapegoat. God knows there has to be one for everything. Well, here we are.

Go ahead and continue to take us down, but you're only going to hurt yourselves. What's going to happen when we can't find jobs on the Street anymore? Guess what: We're going to take yours. We get up at 5am & work till 10pm or later. We're used to not getting up to pee when we have a position. We don't take an hour or more for a lunch break. We don't demand a union. We don't retire at 50 with a pension. We eat what we kill, and when the only thing left to eat is on your dinner plates, we'll eat that.

For years teachers and other unionized labor have had us fooled. We were too busy working to notice. Do you really think that we are incapable of teaching 3rd graders and doing landscaping? We're going to take your cushy jobs with tenure and 4 months off a year and whine just like you that we are so-o-o-o underpaid for building the youth of America. Say goodbye to your overtime and double time and a half. I'll be hitting grounders to the high school baseball team for $5k extra a summer, thank you very much.

So now that we're going to be making $85k a year without upside, Joe Mainstreet is going to have his revenge, right? Wrong! Guess what: we're going to stop buying the new 80k car, we aren't going to leave the 35 percent tip at our business dinners anymore. No more free rides on our backs. We're going to landscape our own back yards, wash our cars with a garden hose in our driveways. Our money was your money. You spent it. When our money dries up, so does yours.

The difference is, you lived off of it, we rejoiced in it. The Obama administration and the Democratic National Committee might get their way and knock us off the top of the pyramid, but it's really going to hurt like hell for them when our fat a**es land directly on the middle class of America and knock them to the bottom.

We aren't dinosaurs. We are smarter and more vicious than that, and we are going to survive. The question is, now that Obama & his administration are making Joe Mainstreet our food supply…will he? and will they?"

Life without financiers?

While it is too early to declare the death of the American Financial Industry, it is not too early to think about life in a post-financier age. In fact many of us are learning to cope without credit, to think of retirement less as an investment strategy and more as a savings plan and to temper our expectations for a gold-plated future. As we stand around the hospital bead of our comatose rich Uncle Wall Street, perhaps we should take some time to think about what life would be like without him...

It is often stated that without fluid credit markets the American dream of owning your own house would be out of reach for most of us, that college education for the masses would be a thing of the past, and that business would close without access to easy credit. Perhaps, but we have to question the extent to which easy credit has simply driven prices up. There is a parallel correlation between the loosening of credit markets in the early 1990s and the dramatic increase in housing prices. If this is the case, is it reasonable to assume that without easy finance, and with a glut of empty houses on the market, that home prices would go down? Perhaps becoming much more affordable through private mortgage arrangements via the homeowner? Considering the damage to the world economy, we have to ask if the 15% increase in home ownership since the beginning of the 20th century (see Smeins 1999) was actually worth the trouble--especially since that very increase (once a point of validation for the finance industry's late 20th century alchemy) is slipping away at an alarming rate.

College education is easier to address as modern finance has little to do with students getting the necessary loans to attend college. I am case in point. I managed to run up fantastic debt in college without appeal to non-government backed loans. Of course there are other issues here. College endowments will shrink and that will affect scholarships and plans for college expansion--hopefully, it will force colleges to decide what their purpose is, are they a business or an educational institution? Often enough the two are at cross purposes. When tax revenue falls off, it will become harder for Uncle Sam to extend education loans in the same quantity, or so one would imagine. But I think that the Obama administration will place college education for the next generation high on its list of funding priorities. 

As for the infamous "bridge loans" businesses apparently require to operate, perhaps businesses should, like households, operate within their means. For example, if a business owner regularly needs a quickie loan to make payroll, then perhaps she should stow that amount into savings and make it a part of her financial plan. If that doesn't work, maybe she needs to narrow the scope of her business. Business around the world are currently making these kinds of adjustments.

My point is that easy credit, as is now glaringly obvious, has been more of a problem than a solution (to paraphrase Uncle Marx, Groucho not Karl, "with a solution like that, who needs problems"). From multinational corporations to my house and your 401K, the current financial crisis is a re-evaluation of everything. Through across the board deflation, prices, salaries and futures will find a new level. My question is, will we be better off without Uncle Wall Street? Should we leave him in his coma, and get on the best we can? I think many of us already are.