“Government of Wall Street and by Wall Street and for Wall Street must not parish from this earth”, to paraphrase, no parody, Abraham Lincoln.
It seems, especially to hear the Republicans tell it, but also so many others, the primary bench mark we must look at each week day to judge our nation’s viability is the Dow.
It’s down again, the reports stream in, therefore everything President Barack Obama just did or said is for naught.
Excuse me for bringing the is up, but were not those movers and shakers and traders the ones who by their actions and the results and interpretations of those actions the ones who inflated the bubble so hugely that it finally burst?
And Wall Street is really just a generic title. Bank of America, at one time, maybe still, the largest financial services institution in the world, is headquartered in Charlotte, N.C. Some worry that the bad assets from its Merrill Lynch acquisition, among other things, may pull it under (it could already in reality be insolvent, but then again, as we are finding out, nearly any business can be without the wider public knowing till it’s too late). And please, I have no idea whether it is solvent or not. I only know what I read on the web and the Wall Street Journal, traditional paper edition, when I get to the public library.
Bank of America is Bank of America in name only; it sold out years ago (okay was acquired). The name was kept, I suppose, for “brand recognition”, as the marketers and merger people call it.
It began in 1904 in San Francisco, founded by an Italian immigrant, who named it Bank of Italy. One story I read claimed he was able to rescue his cash from the rubble of the 1906 earthquake and fire and set up banking on a couple of wooden planks.
I knew a guy who took a Junior College banking course and upon completion went to work for Bank of America. I mentioned something about A.P. Giannini, the founder of Bank of America. “Never heard of him” he said, with a blank look on his face. (I had in conversation admitted to this guy that journalism did not pay well. This time he looked super puzzled: “why are you doing it?” he asked. No true journalist could have come up with a more obvious and at the same time probing question. I had no real answer).
But back to the problem of the failure of our economy and more specifically our banking industry:
Maybe the federal government needs to become the bank for awhile (isn’t it already?) and bypass Wall Street altogether. While preserving capitalism, maybe we need to work out a new business model.
Or, again, maybe the free market will sort this one out too eventually. If the big banks or the majority of them (not to mention small ones) are really insolvent (if the truth be known, as is often hinted in news stories and blogs), could they not be replaced by now smaller entities or even potentially larger ones who are independent of the Wall Street crowd as the source of capital?
I read in my local newspaper that one regional bank in my area never took part in all those subprime loans and therefore does not hold all that bad debt. I don’t know whether it has accepted federal bailout money, nonetheless – I would hope not.
I think at first everyone thought that some extraordinary emergency action, such as that started in the last desperate days of the Bush administration, could head off the disaster and we could all go back to business as usual. Such was not the case.
Bush, although he would end up being blamed for all the troubles just like Hebert Hoover was before him, would have done better to simply make sure that all investors were protected from bank failures up to the insured amounts and that financial scams were prosecuted and left it at that. But judging by his haste to do a 180-degree turn from traditional capitalism to state-run socialism, he either felt public pressure (and had legacy worries) or just a lot of pressure from cronies who said, do anything, just save our money and our way of life (or give us new money).
Meanwhile, although I realize he is politically committed otherwise, Obama would do better to concentrate on making sure the unemployed are offered benefits, health care is reformed, and education and job training prioritized.
At the same time, emergency infrastructure projects should be pushed forward to forestall such things as bridge failures. And there is nothing wrong with incentives to promote green industries. And along those lines, all industries. What we need is employment.
(Bailing out the failing auto industry is a mistake. We need an auto industry, but not a failing one, and funding the existing model will just prolong the agony. Please let a new more nimble and open-minded crowd of capitalists take over. As for big labor. You won’t have jobs unless there is healthy industry – leave it at that.)
Perhaps many thought there would be some utopia where all the smart people would invest money in money, rolling over dollars, not to produce products and services and employment, but to simply increase account balances.
Certainly people should be able to invest in anything they want to (and hooray for compound interest), but as long as the only incentive is to invest in interest on interest we will push ourselves toward a world where all the dollars one can earn will be worth very little, because people won’t be working to produce products and services and improving or even maintaining the infrastructure.
And even though I don’t quite understand why, I have an idea that down the line, a year or two, maybe sooner, we are headed for major inflation (good at first, not so good as it continues to climb) and maybe that old 1970s nemesis “stagflation”.
So while all this is being sorted out, the best that veteran workers can do is adjust to the ever evolving labor market (what there is of it). If you can go to school or get training, do it.
For the young, there is only one answer: get the best possible education there is for yourself and get the type that fits you best. People in all walks of life need to be more knowledgeable than ever because of technology and the need for extreme flexibility in the workplace.
Some say Obama is doing too much (committing too much money – I have suggested that), others say not enough. I imagine no one really knows.
I’ve touched on the idea before that some now say that FDR’s New Deal, although mitigating much human misery, did nothing to bring the nation out the Great Depression, only World War II did. But here’s a new twist I heard on that and I like it:
It was not the war itself that brought us out of the Great Depression, but the giant surge in our industrial output. Suddenly people had jobs in the war industries (and nearly all industries were turned into war industries, even the USA’s own division of Steinway Piano, if you can believe it (they manufactured wooden gliders). But once the war ended, the industry was in place and re-tooled from anti-aircraft guns to automobiles and from Radar to refrigerators, and the GIs came home, made use of their GI bill education benefits and moved to the suburbs.
The lesson here is not old history, but the need for industrialization. Yes it supports consumerism, but consumerism alone will not do the trick (have you noticed?), and solar panels will be nice, but I think we have to diversify.