Michael’s America – Wall Street, Economy, & Spending

I’m starting with this because I feel like it’s obviously the most important issue we’re facing today. Republicans say that we have a failed economy and President Obama has caused it to remain stagnated and even become worse because of his excessive regulations he’s passed during his presidency. Democrats point to the fact that we’ve had job growth every month for over two years, the stock market has recovered to and surpassed 2008 levels, the auto industry is booming, and housing prices have stabilized. So who is right? Well technically, both are. The economy is improving, for the short term. We have seen job growth over the last two years, but not enough and not quality jobs. And the Wall Street has recovered and is back to making record profits…the problems is that money isn’t trickling down to the common people. (Democrats oppose trickle-down economics but promoted just that by the quantitative easing programs they injected into Wall Street. And the housing prices have stabilized, but have done so thanks to foreign buyers. So we are recovering but we’re in a false recovery. And that isn’t just President Obama’s fault or just President Bush’s fault. It isn’t just Republicans or just Democrats fault. It’s everyone’s fault collectively that has been in office in the post-WWII era in this country. On top of having a slow economy, huge Wall Street, and lack of quality jobs growth, we’re spending ourselves into an eventual collapse. So the $100 million dollar question is what do we do?

The answer isn’t popular among neither party but it’s one that must be answered. We must first start with Wall Street. The problem with Wall Street is that we’ve injected all of this money into it, and have seen very little in return. So how can they be recovering and at 2008 levels, but the economy still be stagnant? It’s simple: Wall Street has took all this money, put it in their pockets and pulled away from the table. When they walk away, this leaves a huge debt that we’ve financed, with us having to pick up the tab. Wall Street has seen that they can match and improve over 2008 level profits with fewer jobs and spending. This is the best business model there is. The goal of any good business is produce more while spending less. Wall Street is a business so why wouldn’t it work this way? What we need is a dwindling of Wall Street power. It has become way too large and has too much power. Of course the fact that you have the Fed pumping money into it without Congressional oversight isn’t helping any, but that’s a whole different issue. We need to see an alternative choice for people to invest into. Here’s the problem that normal Americans face. Let’s say you bought stock in a company in 2008 before the collapse. After the collapse, your share drops and you’re losing money. By 2012, the stock is finally back to 2008 levels and you’re right back where you started from 4 years ago. That’s 4 years of your investment that you have earned nothing on. At the same time, you have corporate hedge fund managers with millions in hedge funds in that same company and over that same 4 year period, they may see their investment go from 10% return to maybe 3%. Then by 2012, they’re back up to around 7% again. They’ve came through the recession with no money lost, and actually seeing large gains. How is this fair? Instead, we need to see a system that allows people to invest into small businesses and be rewarded through a more fair system. The same is true for retirement funds. Virtually our only option is invest and pray we don’t lose. That’s not a sustainable model. The problem we have is Republicans and Democrats both depending heavily on Wall Street (even if they don’t openly admit it). Republicans reduce regulations to increase the amount that Wall Street spends on their campaigns and Democrats inject money into the system, hoping to spur economic growth. This. Must. STOP!

Once we see Wall Street broken, and new investment opportunities opened for Americans, that’s when we’re going to see the re-emergence of the Middle Class and a true recovery begin. There will be more incentive for people to once again strive for the American dream that led so many people to this country over the years. At the same time, we will see a large increase of revenue and will be able to reduce deficit spending.

So on that note, let’s go ahead and touch on our spending problem. There’s no question that America is like the kid that keeps buying everyone shots hoping that they’ll like him, even if he can’t afford it. We’re $16 trillion dollars in debt. BOTH parties are responsible for this. So how do we reign in our spending? It involves a three-step solution. The first thing is to increase revenue. I’ll tackle this issue later this week, so watch for it. The second step is to adjustment our entitlement spending and defense spending, and I’ll touch on them as well in the future. The third step is to make smarter investments, directly into the heart of America and not into greedy corporations and Wall Street. Once we begin generating revenue at levels that we should by closing loopholes and increasing capital gains taxes, all while keeping corporate tax rates at the same levels they’re at now, we would have the revenue needed to finance our economy. Once we end the useless wars we’ve been in and begin to re-allocate war funds into debt reduction payments, we would see our debt problem shrinking drastically.

I know that a lot of people will ready this and think “America without Wall Street? Impossible!”. I was in that same boat a few months ago. I just encourage you to research and find out just how possible it is. Obviously, you don’t have to agree with me, and I know a lot won’t, but if you don’t, at least have your own ideas. America doesn’t need anyone else telling her everything that is being done wrong. she needs more people helping her figure out what to do right.

-EDIT-

After one of my commenters brought this to my attention, I went back and read and realized I wasn’t completely clear so I want to make sure this is understood because it’s important.  I’m not calling for a total elimination of Wall Street, but rather a complete restructurization, eliminating government injections of capital into it. I also want to see an alternative option for investors that will go along with Wall Street. We need some type of system that rewards people for investing in small businesses they believe in, similar to how people invest in large corporations now and receive profit if their stock rises. We should allow them to invest in small businesses and have the same opportunity for profit if the business takes off. This will fuel our middle class growth. We also need an option that is more friendly and safe for our retirement savings. Now to make these changes, we need to set up regional “wall streets” that small businesses can go to with ideas and investors can meet up with. The other positive with creating these mini wall streets is a distribution of wealth all around the country instead of seeing all this money tied up on the tip of Manhattan, causing the cost and standard of living there to be so extremely high. This would help raise the standard of living everywhere.

Ultimately the goal is to change the concept of Wall Street. We need a government that can work outside of Wall Street and not be caught playing Russian Roulette with a gun to our heads when another financial crisis hits. We need to eliminate the system that is “too big to fail” and require tax payer bailouts. And finally, we need a system that will help to spur growth from the bottom-up and see the re-emergence of the middle class in this country.

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3 thoughts on “Michael’s America – Wall Street, Economy, & Spending

  1. A very interesting idea. I admit, I have never thought about eliminating wall street. How would that be done? And, after wall street stops, where does business get more for development and expansion? It seems like it would create a very large vacuum in our economy with repercussions around the globe. I’m not criticizing, I just trying to image how this would work and the United States afterward. Obviously, you are way ahead of me, perhaps you will answer my questions in coming posts?

    • After going back and reading this, I see that I wasn’t very clear on this and thank you for pointing it out. I’m not calling for a total elimination of Wall Street, but rather a complete restructurization, eliminating government injections of capital into it. I also want to see an alternative option for investors that will go along with Wall Street. We need some type of system that rewards people for investing in small businesses they believe in, similar to how people invest in large corporations now and receive profit if their stock rises. We should allow them to invest in small businesses and have the same opportunity for profit if the business takes off. This will fuel our middle class growth. We also need an option that is more friendly and safe for our retirement savings. Now to make these changes, we need to set up regional “wall streets” that small businesses can go to with ideas and investors can meet up with. The other positive with creating these mini wall streets is a distribution of wealth all around the country instead of seeing all this money tied up on the tip of Manhattan, causing the cost and standard of living there to be so extremely high. This would help raise the standard of living everywhere.

      Ultimately the goal is to change the concept of Wall Street. We need a government that can work outside of Wall Street and not be caught playing Russian Roulette with a gun to our heads when another financial crisis hits. We need to eliminate the system that is “too big to fail” and require tax payer bailouts. And finally, we need a system that will help to spur growth from the bottom-up and see the re-emergence of the middle class in this country.

      • I went back and edited this, to include the comment in case someone else reads and doesn’t notice it below here. Thanks for pointing this out.

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