September 29, 2008
Across the Streets
You’ve heard the rhetoric in Washington and the media about Wall Street versus Main Street. The idea, I think, is that there is a difference between what would benefit the financial sector and what would benefit regular Americans, whatever “regular” is supposed to mean these days. However, I don’t think that this demarcation is constructive, or even correct, especially in today’s political and financial climate.
First of all, in today’s world it should be practically impossible to make the argument that any portion of the economy or population can prosper or falter without affecting other parts of the country. I would think that this fact alone would discourage the “us vs. them” thinking that seems to be prevail in the public discourse. However, since that type of thinking seems to be ingrained in our culture, I’ll go further.
At a basic level, the idea of an investor class as distinct from the non-investor class is becoming or has become moot. Every homeowner with a mortgage is directly investing in their homes by acquiring equity in an asset (the home) over time. Every worker with a 401(k) or IRA is directly invested into the stock and bond markets. Every current or future retiree with a pension is having that pension invested for them by their company. Even if someone claims to not be an investor, per se, is still deeply affected by the financial sector. All businesses need loans to keep their operations running smoothly. If businesses could not get those loans, then they would not be able to function well, if at all.
It’s my personal opinion that the Wall Street versus Main Street rhetoric is simply that: political rhetoric. Vote maximizing politicians and a profit maximizing media have discovered that there are votes and ratings to be gained by pithy, confrontational sound bites, and an otherwise distracted or ambivalent public plays along, but it gets us nowhere.