THE BATTLE OF WALL STREET by T. Edwin Perry
It’s a story as old as time itself: we envy those who have what we want. We blame them for the fact that we don’t have it. We convince ourselves that we deserve it. We convince those around us that those who have it are villains, and don’t deserve it. Once we have convinced enough people that those who have it are villains, we move to take it from them. Then we have it, and those who don’t envy us. They then envy, blame, convince and connive to take it from us. The Circle of Greed continues.
The “It” component of the story is irrelevant. With our American Revolution, the “It” was Freedom. They had it, we wanted it, we took it, and now the world hates us for having it. With our Military, the “It” is power. We have it, they want it, and they hate us for it. In politics, the “It” is control. When the Democrats have it, the Republicans want it. When the Republicans have it, the Democrats want it. And both sides are willing to do whatever they have to do to get it. But, for most of us, the “It” is money. “They” have it, “We” want it, and most people will make sure ANYONE who has it is painted as a villain until they get it.
Envy is categorized as one of the “Seven Deadly Sins,” and left to its own devices, it drives the “Circle of Greed” until nobody has anything, but in smaller doses, it can spur the economy. It can build a nation. It can motivate innovation and creativity. It can be the necessity that becomes the mother of invention. Or, like any sin, in can place you in your own personal hell.
Right now, Congress has targeted the “Fat Cats” on Wall Street, seeking to make examples of the investments of Goldman Sachs and other firms who took advantage of their positions to garner tremendous profits, even as the economy dove into recession. They are clamoring for “Reform,” a favorite buzzword of the political class, in an effort to “protect the little guy.” And Congress is offering 1300 pages of reform, pushing for votes for the past two days to bring the bill out on the Senate Floor for debate. And, while I understand the popularity of this push to reform the Investment System, I question if the “Reform” being offered is the BEST move that can be made at this time. Let’s think about this for a moment.
First, do we really NEED 1300 pages of “Reform?” There is already a Security & Exchange Commission (SEC) whose entire existence is to act as a watchdog over the Investment System. It’s their responsibility to ensure that trades are made in an arms-length manner, without benefit of “inside” information. (Remember: these are the folks that tossed Martha Stewart in the joint.) Perhaps instead of “Reforming” the system, Congress should focus on “Enforcing” the system, investigating the inappropriate activity of their executives Watching Porn instead of Watching Investors. That would be a good start. We can do THAT without 1300 pages of “Reform.”
Once we’ve reviewed the SEC, let’s set them to the task of DOING THEIR JOBS investigating the activities of Investment Brokers & Firms to verify that they are doing THER jobs in accordance with the guidelines already set forth by the SEC. (I know, I sound like a broken record. Enforce the SEC guidelines. Enforce the Immigration Laws. Don’t pass a bloated, wasteful “Healthcare Reform” Bill.) But think about it: had the SEC been doing their jobs before, the Ponzi Schemers like Bernie Madoff or Scott Rothstein would have been caught long before their schemes collapsed, possibly saving investors from their tremendous losses. And, let’s not forget the 401K & Mutual Fund Investors who have suffered from bloated earnings reports from companies like Enron, Worldcomm and the “Dot Coms” that resulting in a market crash back in 2000!
Once we’ve got the private investors working on the “up & up,” let’s move on to these Public/Private partnerships like Fannie Mae and Freddie Mac that, thanks to Government Mandates, have funded poorly collateralized investments, wasting Hundreds of Billions of Dollars on bad loans and essentially causing the housing bust that caused our current recession.
I’m not an anarchist. I believe that certain regulations should exist to keep the playing field level. (That is to say, make one set of rules and ensure that everyone in the game plays by the same ones. This isn’t about “Social Justice;” just Justice.) And this is the job of the SEC, to make the “Investment Game” fair to all investors; however, we have to remember that ALL INVESTORS, regardless of their wealth, take a risk, and that risk can include LOSING everything on a bad investment. After all, the only real difference between Gambling and Investing is the advice that you get when you place your bet. Either way, you can still lose your shirt.
Making the “Fat Cats” on Wall Street into Villains may make us feel better in the short term, but it won’t fix the problem, and the truth is that we NEED the “Fat Cats” to make money for their investors. It is the Investor that stimulates our economy…not Congress. But the odds are good that any “Reform” that Congress seeks to pass will do nothing but ensure that the Investors stay out of the market, thus extending our economic woes far longer than they need to be.
Think I’m wrong? Do a little research for yourself about the Great Depression. It likely would have ended in a year, or less, had the Government just gotten out of the way. Instead, it was extended for more than ten years. Compare that to the Depression of 1920, which ended in less than a year after the Government CUT TAXES and reduced its size & spending. With just a little research, you’ll see how similar these two events were when the started, and how dramatically different their outcomes were.
One last thought: If you want it, go out and earn it. Ask the ones who have it how they got it and maybe, just maybe, learn from them so you can do it for yourself. We’re lucky enough to live somewhere where it CAN happen to you. AND, if you are fortunate enough to succeed, I say you should be allowed to keep it because, when all is said and done, IF the day comes that I get it, I’m keeping it.
Call me a Villain if you must.
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