When news came of big bonuses and huge banking profits coming out of the worst economic downturn in history, did the Street take a hit? Nope. It’s been up up up for months now.
When unemployment figures stayed high, and continued foreclosures clouded the future of millions of homeowners, did the market stumble? Nyet. Some stocks have the willies, sure, but for the most part everything is going so well that the ever-skeptical shorts in our midst are calling for a correction this morning.
But when President Obama showed up with Paul Volcker last week and called for an aggressive initiative aimed at fixing the excesses in the Finance business, curbing the size of the risks that institutions are capable of taking and trimming the size of the monster banks that engage in them, what happened? The market caught a huge cold, that’s what it did, zooming down in a paroxysm of anxiety.
And that’s why in the end, Wall Street will win this particular struggle between regulatory sanity and outlandish license.
Yeah sure, we’d like all those greedy fatsos with their $100,000 cars to take it in the ear. But not if it means trimming the potential profit we can make on our investments.
We’d like our 401(k)s to be safer… but not if it endangers the value of our portfolio, however paltry and sorry that might be. People with ten grand invested in the market will fight to the death to protect the upside of billionaires who don’t know what to do with their excess cash.
When all is said and done, our dreams are tied up with the ability to make big, greasy profits on a tiny little ante. For a while, when things blow up as they did in ’08 and ’09, everybody runs around in high dudgeon, squeaking about the bad guys who changed all the rules in their favor, and we all have a terrific time watching those who cross the line do their perp walk, but in the light of day, when things return to semi-normal, we don’t really want things to change at all.
We want to ride the roller coaster on the way up, and then hop off just in time to avoid the screaming descent.
So that’s how it’s going to work out now. People will yell and shout and jump around and have a blast trashing all the uglies who run the money machine… and then the moment Washington tries to do anything about it the Market will go into the tank, everybody will freak out from Main Street to Wall Street and call their Congressman and the big lobbyists, now freed of any constraint on how much money they can siphon into politics, will feed the hands that were supposed to bite them.
And that is why Wall Street will win. Because We the People want it to.