So, now I see that both the GOP and the Democrats are bent on demonizing Wall Street. Even my dear friend, and I worship the man, Karl Rove, is using anti-Wall Street ads against HRC in Iowa. Of course he’s right. Hillary is a scandalous fraud protesting against Wall Street while raking in Goldman Sachs cash. (By the way, I am a small stockholder of GS and it’s been a disaster. If they have all of that money, let’s have a decent dividend!)
I am assuming that when politicians do polling, and focus groups, of course, they find that Americans hate Wall Street.
But why? Why do Americans hate Wall Street? Is it possibly because Americans do not know what Wall Street does?
Wall Street is not the Mafia or La Cosa Nostra. It is not a secret cabal. It is not alien invaders. It is not men and women who are fundamentally different from you and me.
Wall Street is a group of firms and individuals that perform a vital service. They sell income streams from corporations to people and groups who need income. They take the income from the XXX Corporation and sell it to John Q. Public or the West Virginia Coal Miners or to your parents’ estate. They might be thought of as a giant irrigation system that sends water from a river — corporate earnings — to the thirsty farmers — people who will need income to retire or to send their kids to college or to pay for nursing care.
They also arrange for new entities to raise money to pay for starting up factories or mines or Internet facilities. They also arrange for corporations to merge or to acquire other entities that will throw off cash.
The immense majority of the time, they do this on the up and up. They are paid well, to be sure. So are NFL quarterbacks and Washington Nationals pitchers and movie stars and real estate developers. Lots of people are well paid. We mortals marvel at the income of a man who can throw a football beautifully but we don’t hate him. We are impressed by the wages of a woman who can run a big Internet firm well but we don’t hate her. I wonder why we are told to hate Wall Street in particular so much.
Anyway, the Wall Street people also work very hard and they really basically have to put their lives on hold while they climb the greasy pole to power and wealth on Wall Street.
And, yes, there are crooks there. So much money goes sloshing through finance that naturally some crooks will be lured to the scene. And there have also been some massive Wall Street schemes that were just plain scams, like Madoff and, a whole different matter, Milken’s junk bond frauds. And we hate the people who did this for their crimes. They really are different from you and me, I hope.
(I note here that I played a part in exposing the Milken misconduct. He was convicted, did his time with extreme bravery, helped teach math to his fellow inmates, and has worked on many charities since he got out. My hat’s off to him at this point.)
Wall Street is very far from perfect. But look at what they do for us investors — and directly and indirectly, the whole country are investors. They allow us to buy assets with total, complete liquidity. We can buy in at any point for small commissions and sell out for small commissions.
If your son suddenly needs a lot of money for school, you can almost always get it from your Wall Street investments at the drop of a hat. Try doing that with your own little real estate empire of rental housing. It will take forever to fix up the house, list it, then wait for a buyer, and then struggle to complete all of the paperwork. In a slow market, it can be anguish.
With stocks and bonds, it’s all done at the press of a button. To provide liquidity to assets measured in the dozens of trillions — that is no small thing. It’s a huge comfort to the whole world.
Again, don’t get me wrong. I spent most of my adult life writing and testifying at trials about financial misconduct. There’s plenty of it. Plenty. Where there is money, where there are fallible humans, there will be fraud.
But overall, Wall Street performs a service tens of millions of us could not live without.
Let’s step back and think how much good it does before we toss it out with the bath water.
Now, while I was writing this, a woman called me from UCLA. She wanted me to help her with a course on capitalism and whether it’s destroying the human spirit, whether we would be better off with socialism or communism, which supposedly place less emphasis on money and competition.
“Capitalism is the human personality in action to satisfy human wants and needs,” I told her and I believe it’s so. If man is to live in freedom, if woman is to live in freedom, he or she will have wants and needs. Free market capitalism is the best system that has ever been devised that takes human beings as they are — not as some fantasy unselfish angels — and harnesses what human beings are to feed, house, clothe, transport, and connect them in the best, freest possible form.
This applies to Wall Street as well. Wall Street uses greed, competitiveness, and energy to produce a prosperous life for the society and a supremely prosperous life for people who know even a little bit about how Wall Street works — and a likewise ultra-prosperous life for those who thrive in its piranha pond atmosphere.
It’s dangerous for the nation, and its younger members especially, to see Wall Street as something to be “occupied,” tied down, strangled — instead of the powerful engine for well being in a free society that it is.
The enemy is not the free market and never has been: the enemy is those who hate freedom, and Wall Street is a big part of that freedom. We attack it at our peril.
Notice to Readers: The American Spectator and Spectator World are marks used by independent publishing companies that are not affiliated in any way. If you are looking for The Spectator World please click on the following link: https://spectatorworld.com/.