Washington Is The Problem

by Stephen Moore - October 26th, 2008 - Wall Street journal

[Fred Smith] attributes the financial crisis to "the intersection of four long-term developments." Reckless mortgage lending policies; high energy prices; mark-to-market accounting rules; and national policies that favor what he calls "the financial sector over the industrial sector."

We have a serious problem in our view of capitalism here in America. Fred Smith has defined the problem with this comment; he refers to the "financial sector" and the "industrial sector". However neither the MSM or Wall Street ever uses these terms ... nor in any way ever differentiates between Wall Street (the financial sector), Work Street (the industrial sector) and Trade Street (the distribution sector).

Almost all of the evils practiced in the name of capitalism are practiced by the denizens of Wall Street. The "securitization" of mortgages, a repeatedly failed scam that has never worked, is one major cause of the current economic crisis. This idiocy was not the brainchild of someone on Work Street or Trade Street, but was the specific invention of con artists on Wall Street. They have made a fortune on the practice while leaving millions of Americans with bankrupt 401k plans as their savings have been decimated.

Wall Street vigorously rejects the separation of capitalism into these three different areas, since their profits rarely involve funding the productive creation of wealth (the only role that justifies their existence). Instead Wall Street usually profits from manipulation of wealth, destruction of wealth or reducing competition to maximize profits.

Not one of these three goals serves society. As a result, Wall Street is actually a huge fraud. Business supporters who believe in the societal benefits of capitalism need to start to differentiate between Wall Street and Work Street. Wall Street is only of value when it puts together capital to create new businesses. When it works for mergers and acquisitions, it frequently sabotages free enterprise in the process. We need to stop allowing Wall Street to deceive us.

Work Street and Trade Street are what make free enterprise great. Wall Street is needed, but is frequently a scam. Government rules need to make sure that Wall Street fills its role in funding the creation of wealth. They should punish the manipulation of stocks and bonds for the greed of Wall Street con artists.

The title of this article is "Washington is the problem" but what the writer meant is that "Government is the problem". It is the problem because it is controlled by Wall Street.