Over the last 18 months, there has been a concerted effort to polarize Wall Street and Main Street. Turn on the television to any business show and see if you don’t see somebody take a shot at the “fat cats” on Wall Street. It could be Bernie Madoff or it could be a CEO who earned a ton in stock options. It doesn’t matter. There is a perception out there that our current struggle could be solved if we could just get “them” to stop hosing “us.” Even the President on Monday night went out of his way to position Elkhart, Indiana as the hometown for all of “us.”

We have to do something for them is the mantra. Apparently, the only way to do something for the citizens of Elkart is to punish the citizens of the financial industry. Well, it’s a heckuva sound bite, but is it true? I think not, but first I need all of “us” to come to a rudimentary understanding of what Wall Street does.

First things first: Gordon Gecko’s meglomaniacal character portrayed by Kirk Douglas in the now infamous flick, Wall Street is a complete load of you know what. Though greed is an element inherent in a free market, no one would ever be stupid enough to tell an adoring audience that it is good.

Here is the real deal on Wall Street.

If the American consumer is the engine that drives the car, then the financial services industry (banks, brokerages, insurance, credit agencies, etc) are the oil. If we had to pay cash for everything, how many of us would own a home or a car? I don’t think many. So, without oil, the engine seizes up and stops. That is what is happening.

The argument that the media and our current administration (to a lesser degree) are making is the equivalent of a mechanic telling you that “oil”, in general, was the culprit of your automobile’s engine failure. The truth is that corrupted oil is what causes engines to seize…clean, fresh, properly functioning oil is a necessity. And, anyone who has owned a car for longer than a day would think any mechanic a damned fool who tries to convince them differently.

So how do we keep this economic oil from becoming corrupted? Through proper maintenance.

We have to maintain the ability to access credit. Now, the real issue before us is whether or not the government can, through massive injections of cash, loosen credit. So far, that program is an abysmal failure. Will it get better? Well, the market did not like what the Treasury Secretary had to say yesterday sending the stock market down another 5%. Why? Because nobody on Wall Street likes the prospect of the government partnering with them. There is a wide-spread belief that government is terrible at business. The whole notion of somebody knocking on your door and saying, “Hi, I’m from the government and I am here to help”, scares people. They know that the last thing business needs to succeed is government’s help because it translates into higher costs.

Going back to the engine analogy. The government is trying to convince you that they are the only mechanic in town that can fix your engine. You are not a mechanic, so you have half an inclination to believe them. The problem with this logic is that they have rarely restored engines to a usable state, and furthermore, when by chance they do…they will charge you more than the car is worth for the fix. It would appear to me that what the government is telling us is that this engine is broken, and although our economic history would indicate it best to shop the car to a free market to see who has the best idea to fix it, our government is adamant that the time for this has come and gone and our only choice is to keep pouring oil into it and hope that the seizing will subside.

It really is that simple. There is a great article in the Christian Science Monitor on the role of government in this current crisis. In short, the government should do nothing. This article demonstrates how for 160 years, our society functioned (at least economically) without government intervention. Indeed, for the first 160 years of our nation, government’s interest in tinkering with the economy was deemed unconstitutional. That is correct. It was against the law for the government to get involved in the private business affairs of the nation. The article provides evidence that it wasn’t until FDR appointed 4 liberal supreme court justices at the end of the 1930’s that we were introduced to the notion of taxes and intervention.

My question is for the first 160 years, how did we do economically? We started with nothing and just prior to WWII, we were the bomb (pardon the pun). Why? Because who we are as a nation, at least up until that point, fed our ability to recognize our potential individually. I’ve said it a thousand times; when your children can do better than you did because of the system you live in, hope for the future reigns.

That system works.

The others do not.

So, here is the really, really big question of the day. Why in the world do you want to change that? I do not mean nuance or recondition it. I mean real fundamental change that would be very difficult to reverse; like implementing a “temporary” income tax…how did we do on getting rid of that fundamental “change”.

What would make someone want to replace “hope” for a better tomorrow with “enough” to get us through today? How did that American mindset shift from “Ask not what your country can do for you” to “The people in Elkhart can’t afford it”?

I’m going to use a politically incorrect term that is inspired by ideology but no less true…

Class envy.

Do you think that somebody who makes more money than you do is less deserving and if that is the criteria, what does that say about us societally? Do we believe that they don’t deserve it and we do? And, if that is true, how is that not just the re-distribution of wealth?

Though there may be problems on Wall Street, they are not the enemy.

The enemy is socialism. And socialism starts when class envy convinces Main Street that Wall Street is unattainable. Perhaps our new President could spend some time reminding the people of Elkhart of this pillar of our country next time he is passing through.

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