Wall Street Bust -- The Real Culprit

The blame game is in full cry in the stock exchanges and on Main Street. The Republicans did it. The Democrats did it. Greedy CEOs did it. Overleveraged banks did it. Absentee regulators did it. Alan Greenspan did it – or little green men from Mars did it.
Somebody did it. One thing we all know is that IT was done to US by THEM. They should all be punitively regulated. McCain suggested no CEO should earn more than $400,000 a year. Of one thing we are all sure: THEY did it. To US. Shame on THEM.
I keep remembering my aunt’s house. In the walkway between the dining room and the living room, there was a carpet runner. That’s a strip of carpet that hopefully matches the carpet on the floor. It is laid down to cover the worn spot in the original carpet.
I haven’t seen a runner in years. She had hers in the 50s and 60s, about when the original carpet was twenty years old. (The rest of the carpet was perfectly fine – they bought quality in those days.) She saw no reason to replace a whole houseful of carpet because one spot was worn. I believe that same carpet and runner were there when she sold the house in the 1970s.
Most people today don’t keep carpet long enough to see any worn spots. But my aunt came up through the Depression. Her first year of teaching she got paid $300 for the year. She took the bus (for a nickel) in the cold mornings, but she walked home after school to save the second nickel. It was needed for fripperies like food.
Auntie eventually took several trips to Europe; she got to see the pyramids that an uncle had told her about when she was a little girl. She drove a Buick and moved from her nice home to an equally nice two bedroom, two bath apartment in her sixties. She gave to charities and was active in church work until her death at almost ninety.
When she died, she had over $160,000, just in cash – she had distrusted stocks and bonds ever since her father got wiped out in 1929. As we cleaned out her apartment we found that her TV was twenty years old and her mix master dated to the 40s. But they both worked just fine.
There are those – in Washington, on Wall Street and along Main Street who would seriously suggest that the slaughter in the markets would be the fault of too many people like her. Had she lived long enough, that it was her fault.
After all, what did President Bush urgently recommend Americans do when the markets tanked after the World Trade Center was blown up? He asked us to do our patriotic duty and go out and shop. This is a consumer society – go forth and consume, restore economic health by spending.
Buy new carpet whether you need it or not. I am surrounded by neighbors who do just that. They’ll tell you how sick they are of the old carpet – “I’ve had it for five years.” And after a couple of more seasons, they’ll throw out all the living room furniture and start over.
So the mainstay of our consumer economy has become individual consumption. The latest TVs, the newest kitchen gadgets, new laundry machines to match the new paint job in the laundry room. New dining room furniture because the old shade of wood is out of fashion.
Years ago, I had an argument with a neighbor. She bought a new coat every year at a discount store for about $70. I suggested she go to a better department store and buy a coat for $150 that might last for five or ten years. She looked at me in horror. Who would wear a coat for five years?!?
When the markets fell last year, once again Republicans and Democrats alike united to send us cheques for hundreds of dollars. We were expected to spend this stimulus on new carpets, new coats and new TVs immediately to jump start the economy.
Most of my neighbors are as leveraged as any deal done on Wall Street. This card is maxed so we use the next. It’s the American way of doing business – leveraged buyouts at Sears, K-Mart, Wal-Mart, Costco, and Macy’s. Why should Wall Street be any more rational?
I’ll bet there are no runners on the carpets in the offices of the New York Stock Exchange. Now they’re coming to us and asking us to buy their “new carpets” for them. And we’re going to do it. We have, we are told, no choice.
My poor subversive auntie, she was positively un-American. Imagine having that kind of cash left when you’re ninety! On a school teacher’s pension. Just think of all the leveraged economic growth she denied the rest of us. That’s where the blame really belongs. Shame on you, auntie!