Goodbye, Wall Street

Gee, I hate to see you go. I’ve been following tickers since I was 12 years old. I love business, I’m enthralled with making money and I know what Capitalism is. Capitalism is not an economic system, economics being but one of its manifestations, and we’ll get into that another time.

Darn, I guess it’s “Goodbye, New York” too. Terrible shame that, but we’ve been going through this in Michigan for quite a while now…half a decade recently, but really 3 full decades if you’re an industrial sort of guy.

The tough part for me is figuring out whether the gutting of Wall Street is the fault of folks never understanding what went on there in the first place, or Wall Street itself.

I understand what Wall Street was about, in theory and in practice for the men and women who honestly worked there. It was about the flow of capital–which here means store of wealth–being directed in the best manner. Of course, “best” can mean a lot of different things to a lot of people, but I mean “in whatever manner the individuals involved would willingly choose.” Naturally in business, this is really easy…more money is better. This doesn’t mean “no matter how gotten,” but it does mean “being gotten in whatever voluntary ways the participants choose.” Derivatives, hedging and trading in billions of units for a profit slice of .00whatever percent, when done freely, serve to direct capital to its best, most efficient, most productive uses.

It becomes a place where folks can store their wealth, so that it may constantly be directed to attaining profit for them—and as a great side-benefit, directs that capital to its most productive uses. Win-win all around, eh? No wonder California looks so much different today than it did a century ago.

But eventually, that’s not what happened, is it? Main Street’s “investments” turned to muck. First it was their largest store of wealth, their homes, and then it was whatever paper Wall Street chose to print up with their wealth…calling government notes “mortgage-backed securities” and calling equity stock “bets.” [Well okay, the former were only government notes for the banks!]

I think I gotta blame Wall Streeters more for their own demise, if only on the principle that we create our own lives. Well-intentioned or not, Wall Street fell for what has brought down so many other Americans these days—looking for the easy way out, having money without production, figuring out ever more complex ways to screw your neighbor out of something, so that you may have it yourself without earning it. It was mighty impressive while it lasted, but of course an approach like that can’t last forever. Eventually we have produce at least as much as we eat.

This isn’t about blame anyway. It’s really just a good-bye, a fond farewell. You see, there’s not much of a market any more for funding capital to the most productive minds and businesses out there. People that have any serious money are taking their 3% and thanking their lucky stars that they can get at least that. People on the wild side are buying gold, knowing that its firmness in a deflationary moment bodes awfully well for its extreme appreciation during the inevitable devaluation. Inevitable, that is, unless you honestly believe that default is a serious possibility. Because let’s face it—one or the other is going to happen, as surely as the next solar eclipse.

I see what’s going on, because I still stare at those tickers. I understand that the brightest of you are still able to run trades, and the very very brightest must be making some pretty quick bucks these days! But overall, there simply is no market for the direction of funds to innovative, productive and efficient enterprises.

Maybe that bodes well for so-called vulture capitalists who, in an environment like this, nearly rate the status of Angels anyway. But that’s not Wall Street. Wall Street was a huge enterprise directing huge amounts of wealth to a huge country just chock full of minds wanting to direct it, and being able to do just that. They did it profitably, for their own values and goals, so that they in turn could reap the huge production of so many others. And so the spiral went, more production chasing more efficient means of production. That’s why it’s Main Street’s fault too—they were sneering at all of this, thinking it was all just a heady intellectual vacuum. “No sweat, no work.” That’s close, huh?

Hey, who wants to argue about whether higher capital gains taxes will help or hurt capital investment? That’s why there are no comments here.

Anyway, as we are all learning now, the free flow of capital is not what communism is about. Centralized economies aggregate the wealth to the very largest, or most politically supportive, or supposedly necessary Companies. You don’t really need the world’s greatest city to pull that off. A few administrators in a few buildings can handle the whole task.

And so it is, and so you aren’t. I hope y’all find solid work, but I doubt it’ll be as easy as it was.

I dislike talking about the negative, so I’m trying to find a good note. Maybe try this. Americans generally should be proud that at least they don’t like communism at all, even as they unwittingly rose up and called for it. Okay, so this is a tough phase and the guilt can be disconcerting. But remember this—fascism is just communism with a bunch of sadism thrown in, and we still have the opportunity to stop that. That ain’t much, but it’s something. This country will be going free or it will be going the way of every other statist nightmare in history.

I say, be like the businessman and make lemonade out of lemons.

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