In praise of "Wall Street"

[question everything]

When people denigrate "Wall Street" they attack investments.

Unless you live in a cabin in Montana, or a young student crashing with others using bike for commuting, you should want "Wall Street" to succeed. Why? Because if you are lucky to have pension through your employer or union; if you are lucky to have retirement saving accounts like 401K, IRA, or college saving plan like 529, these funds are invested. In stocks, mostly.

Your insurance company, your bank, your employer - all invest in the market. Their ability to prosper, to pay for your loss, depend on healthy returns on their investments.

If "Wall Street" does not do well, you will face a bleak future indeed.

Yes, we want to regulate, to prevent the way some brokerage firms screwed investors before the crash. Yes, we want many of the brokers to pay their fair share of taxes. We want to prevent the collapse of this system that will plunge us into another great depression.

The middle class is dependent on "Wall Street" whether they know it or not.

Of course, we could revert to a socialist economy where the government assures that we have jobs; assures that we have a roof over our heads, food and access to health care. Assures that we, and our children can study for job requirement; assures our retirement, etc.

Perhaps many here would like this. But the majority of the voters would reject it. This is why this country will never have a revolution. People in this country do not hate the rich; they want to be the rich. This is part of pursuing the "American Dream."

[Fumesucker]

1. "Revert to a socialist economy"?

That word does not mean what you think it means.

[Rex]

4. Words scare people.

Certain words more than others. When we get scared, we say irrational things.

Wall Street created the plutocracy we live in now...but yay...pensions (whatever those are) and 401ks (that were destroyed by Wall Street)!

I do feel sorry for those in the middle class that are turning into living paycheck to paycheck like most of the working class. Watching their nest egg dwindle down to nothing.

Must cause a lot of tension and stress at home.

[Rex]

2. Wall Street created this plutocracy we live in along with special interest groups.

Don't kid yourself, we nearly bought the farm in 2008. Globally. We are dependant on a megalomaniac not getting to excited about greed and ruining the world.

But yeah...pension (which are non existent) and 401ks (which were destroyed in 2008) are about all the middle class has left to hold onto. Otherwise they are living paycheck to paycheck like most other people.

[moondust]

3. Thanks for coming out.

Welcome to IGNORE.

[think]

5. What is your opinion on Elizabeth Warren's call for a new Glass Steagall?

http://thehill.com/policy/finance/247929-warren-calls-for-return-of-glass-steagall

[question everything]

9. If, indeed, it was behind the 2008 collapse

and if repealing it will prevent future collapse then, yes, I think it makes sense.

[JHB]

10. Pop quiz: What was Glass Steagall? And what does Warren propose?

I'm asking because your answer above reads as if you don't know.

Maybe it was just poor phrasing, but if you really don't know, then there's no reason for anyone to listen to you on this subject.

[Rex]

13. Hmmm...hard to repeal something that doesn't still exist.

I don't think he read the link.

[question everything]

14. Not expert and am not going to start reading everything that is available

Last edited Wed Nov 18, 2015, 03:23 PM - Edit history (1)

but it is my understanding that it created "a wall" between regular banks and investment banks. Thus, when it was repealed, banks were free to speculate with deposits that customers made, in good faith.

This is what killed the housing market, when banks did not do their homework to determine who could get a mortgage and at what level. Instead, we had the NINJA loan: no income, no job, no assets (verification) and the banks just sold them to investors.

And I don't know how easily it can just be reinstated. At least, I hope that based on our current economy that it can be modified as needed. And I am for Warren to lead this.

And, yes, there is no reason for anyone here to listen to me on this, or on any subject. I don't pretend to be an expert on anything. Like most, I think, I am here to ask, to read others' posts and to post mine.

As an aside, this is why I rarely vote to hide a post. This is a place to debate and to challenge and to ask someone what he means, not to run to mummy to complain that someone offended me.

[JHB]

17. Correct, a "separation of powers" for banks, a firewall...

Your message to which I replied reads as if you thought Glass Steagall was in effect in 2008, may have caused the crisis, and that repealing it made sense. Since that's almost backwards from what happened (it was repealed in the 90s, which opened the door to abuse).

Since that is a pretty basic point in discussing this topic, I'll stand by my opinion that anyone who doesn't understand that doesn't know enough to know what they're talking about.

Since you do, I'll chalk it up to the first option I noted, poor phrasing.

I'm not sure what you had in mind about your aside at the end. If the post was alerted on, it wasn't by me.

Getting back to your OP, I think you are being overly reductionist. When people attack Wall Street, most of them are attacking the elevation of the financial sector of the economy over everything else. Prioritization of quarterly profits over long-term investment, gaming tax law and bankruptcy laws to take over and loot companies from within, the valuation of maximized profit and stock price over all other considerations, the breaking and/or rewriting the law to enhance doing so while hobbling efforts to counter it, etc. ad nauseum.

We can't "revert to socialism" because we've never been socialist. But today's form of capitalism is quite different from the form we had during the Cold War, with tighter regulations and far more progressive taxation. Of course, today's conservatives are the direct ideological descendants of the people who called Eisenhower a communist, so they call any regulation or program they don't like "socialism".

We had plenty of return on investment before Reagan. But we also had mechanisms to discourage sending all of it skyward. Those have been dismantled, and we're worse off as a nation for it (except Wall Street, that sector loves it). There's a lot to be said for learning from what worked before, what didn't work, and applying that knowledge toward new regulations.

As my own aside, your invoking of "socialism" about a subject about restoring effective regulation on the financial sector, and the general framing of your post as a whole, kinda followed the RWers usage pattern for that word, which may have been what prompted an alert on your message, if there was one.

[Rex]

12. Banks? Uhm...yeah they kind of were 'behind' the 2008 collapse.

If by It you mean banks...then yes.

[edhopper]

6. I, for one

Welcome our MBA Master and am happy to do their bidding.

Is it me, or does the OP sound like a 5th Grade educational film.

[Joe Shlabotnik]

11. +1 nailed it

[Joe Turner]

7. You raise a lot of Straw Man arguments

in the defense of the indefensible. No one is saying let's get rid of Wall Street. The problem today is Wall Street owns our government, writes its own rules and has siphoned off much of America's wealth. In short Wall Street has prospered while the middle class has suffered. One more thing, Wall Street, Banking, Insurance are fiduciary industries--not leading wealth generators of a healthy economy. Wall Street needs to be reigned in and REGULATED or this country will face many more financial crises.

[Whiskeytide]

8. Hard to know where to start...

... Your post, I guess, assumes an "all or nothing" scenario. Either leave WS alone or destroy it. I don't think anyone but perhaps a small number of anarchist truly want to destroy WS. Wealth management and stock trading are essential to our economy.

But WS should have to play by the rules, and stop encouraging a business model that is geared toward pillaging the middle class. And make no mistake, that was EXACTLY their game in the run up to the 2008 recession - and since. They gamble with other people's money, and suffer no consequences if it all goes to shit. Is that the psychological profile you want in charge of your retirement?

[question everything]

15. I completely agree with you

I did not suggest "all or nothing." I don't think this works on any area of our lives.

And yes, I agree that it has to play by the rules. But it appears that on many posts on DU, and even the "occupy wall street" of previous years, many with good intentions wanted this.

One thing that not many realize is that our economy is more than two-third service based. Service, in general, involves discretionary spending. Thus, when we feel tight in our funds, we will spend less. And often the funds are not actual amounts in our checking accounts, but our perceived comfort with our investments, and savings.

I think that the collapse revealed exactly how many of these institutions worked. Remember the term "shitty investments" that actually made it to the Congressional record?

[PowerToThePeople]

16. Wtf is this word salad bs.

Wall street is a ponzi scheme, nothing more.