I’m a progressive. I’m also a free-market capitalist. Contrary to popular belief, the two are not mutually exclusive. I’m just as aghast as the next guy at the corruption and excesses of certain CEOs in certain industries, but I really must speak up against the media demonization of Wall Street as a whole.
Before I go further, perhaps I should count the ways in which I love Wall Street. Investing in Wall Street has increased my sense of personal power. It has both made me more knowledgeable and forced me to closely examine my own personal beliefs and priorities. Sadly, as of yet, it has not made me any money. In fact, like nearly everyone else, I lost money during the last crash. Yet, I persevere. Why? Because free-market capitalism is a gamble. Furthermore, it’s supposed to be a gamble. If you wants your share of the profits, you takes your share of the risks. That’s the deal.
However, investing is far more than just a gamble. It’s having the guts to put your money where your mouth is—to use your power to support companies that you believe make the best products, benefit society the most, or are likely to generate the greatest profits.
When people go to Las Vegas, they often decide in advance how much money is acceptable to lose in pursuit of the thrill of potentially hitting it big. So we should when investing on Wall Street. However, investing on Wall Street provides so many more endorphin-producing highs than merely the chance of hitting it big. Standing and cheering behind my wind power company while I check stock prices every morning is a lot like standing and cheering behind the guy at the crap table who keeps throwing hard eights, except that I know that even if it craps out, I’ve still made a contribution to cleaner air and less dependence on foreign oil. I can feel almost as good about my losses as my wins, and that, my friend, is better than Vegas.
Wall Street plays a vital role in connecting those with vision with those who share that vision and are willing to make a contribution towards transforming it into a reality. It’s like magic that way, the magic of creation. How would railroads have been built without investors? How would medical research and development continue without investors? For these reasons, I will defend Wall Street to the death. However, my beloved free-market Wall Street has been infiltrated and now stands accused of being a predatory creature itself, the equivalent of a crooked casino. Your honor, I object!
Wall Street, the ultimate free market-place, has been infiltrated by several offender companies who, against all principles of free trade, can guarantee profits. Insurance companies are prime examples of this. When government legislates that you must purchase a product, the principle of free trade has been violated. To add insult to injury, insurance is not even an actual product, but rather, the promise of a guarantee of safety and security at best, and a big box of fear someone forced you to buy at gunpoint at worst. Further, the principles of insurance are in direct opposition to the risk and reward principles of Wall Street itself. I liken it to Las Vegas forcing you to buy insurance at the blackjack table every time the dealer has an ace showing.
Wall Street has also been infiltrated by administrators of huge pension plans, both private and public, who invest workers’ funds in companies such as Kellogg, Brown, and Root, and other arms manufacturers and contractors that are backed by government funds. This is the only reason they are able to guarantee a profit.
One cannot speak of guaranteed profits without mentioning banks. The recent 700 billion dollar government bailout is ample evidence of free trade violation. Even without the bailout, lending institutions have always had an unfair advantage. Aside from the usurious rates charged by many credit card companies, let’s look at the following scenario. A couple buys a house. More realistically, they buy the illusion of owning a home. In reality, the bank owns the home and they have bought a mortgage. They pay on their thirty-year mortgage faithfully for twenty-nine years and eleven months. At that time, the man is diagnosed with cancer. Medical bills made astronomical by insurance companies wipe out their savings and they miss the final payment. A hefty late fee is attached, but there is no money to pay that, either. Finally, the bank forecloses on the house, realizing twenty-nine years and eleven months of pure profit, in addition to being able to sell the same house again for a much higher price due to inflation. Where is the bank’s risk?
In addition to banks and insurance companies, I would add that any company receiving corporate welfare from the government in exchange for “job creation” is in violation of free trade principles. Too often the phrase “job creation” is synonymous with “tax collection”, in that it is easier for the government to collect payroll taxes from an employer than to ensure that self-employed people declare all their income and pay their taxes. While it’s true that many people prefer to work for someone else and some enjoy managing others, the government helping only businesses that create jobs for others does not make for a level playing field. It provides employers an unfair advantage and discriminates against those of us for whom working for ourselves is the yardstick by which we measure our successful passage into adulthood. It increases the number of obstacles for those who long to test their entrepreneurial wings and take flight, who are willing to risk plummeting for the opportunity to soar. Banks, insurance companies, and the high cost of medical care have just about guaranteed that most of us will never be afforded that opportunity.
Yet, through the magic of Wall Street, I can at least soar vicariously through others, with others. If I can’t do it myself, I can at least be a part of it, make a contribution towards the businesses that I wish I could start myself. I can express my moral priorities, exercise the little power I have to the greatest extent possible.
So let us stop demonizing Wall Street, and begin demonizing the true villains, those who violate free trade principles. Let’s speak out against the personal irresponsibility of those who allow their funds to be invested in companies that, because of free trade violations, can guarantee a profit. By assuming personal responsibility, we can restore, and then appreciate the beauty and power of the free market and all it can accomplish for the good of all, both individually and collectively. .
That is all.