Commentary: Making Wall Street more like Main Street

If you listened to all of President Obama's speech in New York last Thursday, you undoubtedly found it very informative. Even I gleaned some interesting facts from the parts I listened to while reading the nutritional information on a bag of Cheetos.

Did you know, for example, that a serving of Cheetos contains no trans fats? No, wait, that had nothing to do with the president's speech, which focused almost entirely on the banking crisis.

Here, as I see it, is basically how the president explained the situation: A guy named Goldman Sachs and his friends, the Lehman brothers, conspired to make huge, risky bets, using derivatives, which are things derived from other things, money, including mostly other people's money, non-transparent financial markets, meaning they were basically invisible to the naked eye, and dupes.

In order to achieve their dastardly scheme, the conspirators had to develop banks that were "too big to fail." So, they convinced millions of Americans, who were sitting around making decisions at their kitchen tables, to go out and buy houses they didn't need and couldn't afford, big boats, swimming pools and lots of jewelry on the Shopping Network.

The banks then successfully persuaded millions of Americans that all this stuff was free. Meanwhile, the bankers wrote contracts in such fine print that most people thought they were signing a blank piece of paper. You would have needed the Hubble telescope to read all the whereases and wherefores.

Once the gigantic banks that were too big to fail were in place, the Wall Street barons could branch out into new areas of reckless risk taking and deceiving unwary investors. This is when Goldman Sachs dreamed up a scheme to bundle up some toxic mortgages, a bunch of empty condos, some repossessed cars and pinkie rings, and label them, "A really good deal!"

Investors eagerly snapped these packages up. But the bankers, knowing the packages were junk, placed bets that the investors would go belly up. And that is how the bankers made billions of dollars on the tanking economy.

Then, when we learned that the bankers had looted their own institutions, we bailed them out with billions in taxpayer dollars. And the bankers did a conga line through the lobbies of their banks, shouting, "Nyah, nyah, nyah, nyah, we're too big to faaaail!"

Obama said Thursday that this must stop. This crisis caused the worst economic slowdown since the Great Depression.

But in the Great Depression, we were attacked by the Japanese at Pearl Harbor, which got us into World War II, which ended the Depression. These days, the Japanese are having a hard time building cars that work right, much less playing at world domination.

So, it's time for us to enact some economic reforms. First off, instead of banks that are too big to fail, we need banks that are too small to grow. That way, if they fail, hardly anyone would notice.

Second, we need consumer protections. All contracts should be written in big, easy-to-read block letters, and people should get a toaster ever time they open a new bank account.

Third, bonuses for bank presidents should be the same percentage as those for tellers. And while it might seem harsh, bank presidents should get no bonus at all if the bank fails.

I'm sure there are other sensible regulations, like making all banking executives wear those ankle bracelets that parolees do. But what this whole economic meltdown demonstrates is that most of us know absolutely nothing about economics.

Some have called economics a science, which would put it in roughly the same category as quantum mechanics. I would call it more an art, like Texas hold 'em or an Andy Warhol painting.

Try as they might, economists have a hard time explaining this inexact art to the ordinary citizen. That means either we are dim or they don't know what they're talking about.

I prefer to think it's the latter. Why? Because 99 percent of economists predicted the economic collapse months after it happened.

I say, send them back to school to learn a useful trade, like quantum mechanics or even auto mechanics.

Meanwhile, we need to reform Wall Street. Make it more like Main Street -- with a hardware store, a hair salon, two greasy spoons, a movie theater, a dry cleaner, a pool hall, a gift shop, an optometrist's office, three empty buildings and a shoe store.

And maybe a bank.


James Werrell is the Rock Hill Herald's opinion page editor. He can be reached at by e-mail, at jwerrell@heraldonline.com.