Main Street Responds to the Wall Street Manifesto
Main Street America has issued a point for point rebuttal to the Wall Street Manifesto, with a manifesto of its own. Each paragraph of the original Wall Street Manifesto is reprinted below and is immediately followed by Main Street’s rebuttal in italics.
We, the bankers of these United States, want to assure all Americans that we are devoted, heart and soul, to the interests of this great nation. Contrary to countless disparaging remarks by so-called pundits, there is absolutely no daylight between the interests of Wall Street and Main Street. One of our leaders eloquently expressed this view when he said that we do God’s work. We labor night and day to furnish the financial resources that are needed to build this great country. We proudly carry on the great banking tradition of our forebears such as John Pierpont Morgan and Andrew Mellon. Without our munificence over the years, many great projects would never have been funded and, therefore, would have never been built. As President Calvin Coolidge succinctly put it, “the business of America is business”. It is Wall Street and the big banks that provide the lubricant in the form of capital that makes business work.
We, the citizens of the United States, hereby notify the plutocrats and bloodsuckers of Wall Street that we take umbrage at the depredations you have visited upon us. Contrary to the self-congratulatory remarks issued in your manifesto to America, there is a deep chasm between the interests of Wall Street and Main Street. Thomas Jefferson presciently expressed this view when he said, “banking institutions are more dangerous to our liberties than standing armies”. Main Street Americans labor night and day to build and protect this great country. We are the scaffold upon which this country is built. We proudly carry on the great American tradition of our founding fathers who fought and died so that we can be free of parasites like you. Through our toil and sweat over the years, many great projects have been built despite the usurious fees and interest rates you have levied on us. As Mark Twain said, “a banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain”. Main Street Americans provide the muscle and knowhow that make businesses successful. Wall Street is a support function, nothing more. If you cannot support American industry without bleeding it dry, it is time we rid ourselves of your so-called ‘lubricant’ because it is causing the engine of our nation to seize up.
The past few years have been difficult for all of us. It is unfortunate that some misguided individuals have sought to fix the blame on us for all the troubles that currently beset our economy. Our intentions have always been honorable. Is it a crime for us to wet our beaks a little when we provide such a valuable service? Are we not entitled to our modest salaries and bonuses? Should not the taxpayers foot the bill when circumstances conspire against us through no fault of our own? Your elected representatives thought we should receive federal assistance and guarantees to get through a rough patch of road. We had the foresight to ensure that our emissaries were appointed to key posts in the government. Paulson, Bernanke, Geithner and Summers are excellent examples of our wisdom in this regard. We convinced the current president as we have convinced every president before him that it is best to leave the financial affairs of our country to professionals like ourselves. They, in turn, saw fit to appoint our recommended candidates to key positions such as Chairman of the Federal Reserve and Secretary of the U.S. Treasury. A banker is nothing if not prudent in such matters. We leave nothing to chance. We are sure you would agree that our country has been well served under the auspices of our handpicked stewards.
The past few years have been difficult for all of us. It is unfortunate that the insatiable greed of Wall Street has brought our economy to its knees. Wall Street has disgraced the banking profession, which was once a proud industry. It is delusional for you to believe that you are entitled to obscene compensation for the damage you inflicted upon us. Your cupidity is surpassed by your arrogance. It offends our sensibilities that taxpayers are made to foot the bill after you failed miserably in the marketplace. Moral hazard dictates that your banks should have entered into bankruptcy and been dissolved. Our elected representatives, who thought it was wise to dispense federal assistance to help you escape accountability, paid the price in November for their stupidity when they were voted out of office in record numbers. Your so-called ‘emissaries’, who are appointed to key posts in our government, are scrofulous flunkies who serve Wall Street’s interests ahead of Main Street America. Greenspan, Paulson, Bernanke, Geithner and Summers are excellent examples of Wall Street toadies. We do not dispute that Wall Street convinced the current president and others before him that it is best to leave the financial affairs of our country to dubious professionals like you. It is to their everlasting shame that they did not have the good sense or backbone to tell you to go to hell. Instead, they saw fit to appoint your recommended candidates to key positions such as Chairman of the Federal Reserve and Secretary of the U.S. Treasury. The Senate compounded this error in judgment by foolishly approving the presidential appointments. It is in this manner that everything was left to chance as far as Main Street’s financial well-being is concerned. Your handpicked stewards in government are directly responsible for the economic quagmire we are in because they took instructions from you instead of the people they are supposed to represent.
We value our relationship with government officials as much as we value our relationship with Main Street America. We understand that some uninformed individuals feel compelled to criticize us for all kinds of economic ills that have absolutely nothing to do with us. We are inured to such criticism. We also understand the proclivity of politicians to use us as convenient scapegoats. This is simply populist rhetoric as far as we are concerned. It is all right to let off steam as long as it does not interfere with our ability to make massive profits. We are big boys and can take the verbal abuse. What matters to us is the bottom line.
We are sure you see value in your relationship with the government and Main Street America to the extent that you can separate us from our hard-earned money. Rest assured that Main Street does not value any relationship with you. No one likes a vampire squid sucking the lifeblood out of his or her face. We are perfectly aware that you are so self-absorbed in your quest for higher and higher profits that you are oblivious to our disgust and anger. We agree with you, however, that the populist rhetoric of politicians is insincere and hypocritical. Politicians rail against Wall Street in public and then seek you out privately for political contributions, which buy all the good will necessary to obtain favorable legislation.
Our handling of a record number of delinquencies and foreclosures in the housing sector is a model of cooperation and forbearance. We have reached out to the community in its time of need. We have adjusted the terms of mortgages in record numbers. Yet, some ungrateful individuals vilify us for being heartless and not doing enough. To add insult to injury, the courts are taking us to task over minor glitches in mortgage documentation. These technicalities are preventing us from foreclosing and taking possession of property that rightfully belongs to us. People in default of their mortgage obligations are permitted to live their homes for a year and a half on average. In effect, deadbeats have become squatters with the assistance of the justice system. When we finally gain access to foreclosed homes, we find many of them stripped down to the floorboards. Not only is this outrageous, it is counterproductive because an economic recovery is not sustainable, or possible for that matter, until the backlog in housing inventory has cleared.
Your effort to assist stressed homeowners adjust their mortgages has been pathetic, even with the federal Making Home Affordable Program offered to you for this express purpose. The only homeowners that you seem to refinance are those who do not need your assistance. Do not expect any sympathy from Main Street when the courts hold your feet to the fire and demand proof that you have complied with the letter of the law as far as mortgage documentation is concerned. If you can exact a pound of flesh without mercy from your debtors, why should you be treated any differently? We concur that is unacceptable and inexcusable for occupants in foreclosed homes to vandalize property. We also agree that an economic recovery is not possible with the enormous overhang of housing inventory. We want that inventory to clear as much as you do, but we also want to clear our financial system of vampire squids like you who inflict pain on Main Street Americans and then prey on our misery.
For the record, we thought that the housing market was dangerously overheated a few years ago. Nonetheless, we were encouraged or pressured, if you will, by the government to approve as many mortgages as possible. We dutifully complied. In order to meet strong demand, we bundled the mortgages into packages, which we sold to investors who could not get enough of them. We made sure those securities were rated triple A by our partners. We cannot help it if the housing market turned sour. It was a good run while it lasted. At least we had the good sense to protect ourselves by shorting the investments we sold to our customers. There are always two sides to a trade. We were just a little smarter as things turned out. We agreed that the optics were bad so we paid a fine out of petty cash to settle with the government when they filed frivolous charges against us. That is simply the cost of doing business. It was all for show. Even though we were faultless, we decided to settle the civil lawsuit because it was best for us to move on. We let the government look tough, but we do not want it to become a habit. Next time, we will not be so charitable.
It is true that the government aggressively encouraged homeownership, but that does not justify exploiting the situation. You kept churning out subprime mortgages and liar loans like there was no tomorrow, even though you knew the growth in the housing market was unsustainable. Your shorted the market as your customers kept buying. We are not surprised that you bet against your own customers and paid chump change to settle the government’s lawsuit against you. Civil penalties are a joke. Criminal prosecutions are the only thing that would get your attention. Unfortunately, our criminal justice system reserves that indignity for Main Street Americans, who do not have deep pockets and friends in high places like you do. We intend to remove your heavy thumb from the scale of justice and hold you criminally accountable when you defraud us.
Then there is financial regulation. This legislation almost spun out of control, but our lobbyists convinced elected officials to back off and water down the bill. We believe that less government regulation is best because regulation strangles innovation. The banking industry is quite capable of policing itself, contrary to what others may believe and contrary to the recent meltdown of our economy. We know we can reach out to various regulatory agencies to convince them that we are able to conduct business without the need for oppressive oversight. One only has to look at the copious benefits that accrued to the banking industry after the onerous Glass-Steagall Act was repealed in 1999 to know that less regulation always trumps more regulation. Unfortunately, there are certain individuals who are demanding the reinstatement of Glass-Steagall because of the current economic downturn. Rest assured that this is never going to happen, if Wall Street has anything to say about it.
If we have learned anything from the greatest recession since the Great Depression, it is that Wall Street requires strictly enforced regulations and close oversight. We learned from hard experience that the repeal of the Glass-Steagall Act led directly to the economic malaise we now face. The big banks lobbied congress and the president to repeal this law, which had protected us for 65 years. This colossal mistake effectively allowed Wall Street to police itself and the results were predictable. You became too big to fail and too big to jail. Earlier this year, your lobbyists put a full-court press on congress and made sure our spineless representatives passed a toothless financial regulation bill. This ensures that you would be bailed out when your ravenous greed gets you into trouble again, as it surely will. Main Street will not rest until Glass-Steagall is reinstated.
We have been accused of making excessive political contributions in order to influence elected officials to pass favorable legislation. This is true and we make no apologies. It is our protected constitutional right to spend our money as we see fit. Our friends on the Supreme Court upheld this right, as we knew they would. We will continue to be among the biggest political contributors because we know from experience that the money is well spent. The dividends are enormous. Our political donations deliver the greatest return on investment we can think of.
Main Street appreciates your candor in this regard. The fact that you revel in the influence your money buys is condemnation in itself. It is reprehensible that our elected officials believe the privilege of representing their constituents, along with the government salaries they pay themselves, is insufficient incentive to represent our interests, not special interests like you. We understand that Wall Street vampire squids have long tentacles that reach into the halls of congress. Americans are more aware than ever that we need to replace politicians who do your bidding. The corridors of congress and the White House need to be fumigated with Wall Street squid repellant on a daily, if not hourly, basis to protect us from the infestation that has overtaken our government. Members of the Supreme Court should understand the law of unintended consequences when they arrive at decisions that do more harm than good and undermine our liberties.
We have opposed the Bureau of Consumer Financial Protection because we consider it an obstacle to the free enterprise system we cherish. It is counterproductive to have a government agency second-guess how we run our commercial banks and credit card programs. It is an insult to have a government watchdog determine what is best for our customers when we pride ourselves in treating our customers as we would treat our own family. It is foolish to nitpick fees we apply to credit cards and other financial services. If the government unfairly prohibits one charge or other because it deems it predatory, we will simply shift the charges elsewhere. Bank depositors recently learned how this works as we began to levy fees on checking accounts and other services, which were previously free of charge. It is a zero sum game. We are a business, not a charity. We have to cover our costs and those costs include meeting our generous payrolls and paying handsome dividends to our shareholders. We believe we have been successful in making the Bureau of Consumer Financial Protection a toothless tiger and making its leader, Elizabeth Warren, a mere figurehead who will be overruled if she thinks she can inflict burdensome rules on the banking industry.
Main Street knew that our congressional representatives would cave to the big banks when it came to protecting depositors and cardholders from their predatory practices. As a result, the financial reform bill is more loophole than rule. It would be out of character for the big banks not to nickel and dime us. In this case, however, Wall Street may have overreached. Main Street is pulling their deposits out of big banks in record numbers and transferring the proceeds to credit unions and small community banks. We have learned that the best way to fight Wall Street is to avoid Wall Street. If that means taking our money across the street to a credit union or community bank or discount brokerage house, we are happy to do it.
There have been scathing attacks concerning our role as an esteemed advisor to the Federal Reserve. These scurrilous attacks are groundless. Since the creation of the Federal Reserve in 1913, the government has understood the wisdom of having the largest banks in the country attend advisory committee meetings of the Federal Reserve Board. How else would the Federal Reserve know the condition of the U.S. banking system? What the public does not appreciate is how dependent the Federal Reserve and U.S. Treasury are on the banking industry. A strong banking sector is a prerequisite for a strong America. Government officials reach out to us all the time for information and guidance. We provide pro bono assistance and somehow this is construed by troublemakers as being a conflict of interest. If it were not for the timely notifications that we gave the New York Federal Reserve and the U.S. Treasury in 2008, they would not have been aware of the dire condition of our financial system. Fortunately, we had our protégés in place within the government who immediately understood and responded with alacrity to save the U.S. economy from unimaginable catastrophe. Together, we quickly formulated a plan to save the financial underpinnings of our country. Although there were some casualties like Lehman Brothers and Bear Stearns, at the end of the day, it all worked out. We lived to see another day and so did America. It is not our fault that the Fed and Treasury overreacted and threw money at us in the form of bailouts and guarantees. This was unnecessary and we advised them at the time that it would turn public opinion against us, if we accepted taxpayer funds. We were as solvent then as we are now. Instead of thanking us, public opinion turned against us just as we predicted. There was even talk of capping our salaries and eliminating our bonuses. This attitude betrays a complete ignorance of the situation as it really was. Not only should we have been praised for our quick response to a national emergency, we should have received record bonuses for our service to America. We consider it poor form and the height of ingratitude to have the media and the public carp about our salaries and bonuses which are a small fraction of what we actually deserve. Let us be clear. We make no apologies for the compensation we earn, nor do we begrudge any American what they earn for their labor.
The unholy nexus between Wall Street and our government, particularly the Federal Reserve, is the bane of Main Street. The Federal Reserve has become an offline plutocracy where a cozy club of Wall Street insiders and crony government bureaucrats hold sway over the monetary system of this nation. The Federal Reserve is essentially a fourth branch of government that is largely unaccountable to the people. The Fed took care of Wall Street before Main Street because you are sitting right there at the table suggesting what the Fed should do. The fact that the government allowed you to gobble up your weaker competitors during the crisis made you bigger and more dangerous. We are not surprised that Wall Street would try to rehabilitate its image with a revisionist history, which is contrary to what actually transpired just a couple of years ago. The recently released audit of the Federal Reserve, which it fought tooth and nail to avoid, shows that Wall Street banks approached the Fed repeatedly for handouts from the public trough. This indicates that Wall Street banks were in dire need of federal funds at the time or that they attempted to take advantage of the crisis they brought on. Either way, you are limpid liars. We are not surprised that Fed and the Treasury threw money your way because they are in bed with you, as anyone paying attention can clearly see. Your fixation on the obscene compensation you award yourselves says it all. Main Street Americans work hard for a fair day’s pay. You do not. We do not believe there should be a limitation on what Americans earn for honest services. However, we take strong exception to having taxpayer money used to bailout Wall Street bankers who turn around and pay themselves outsize salaries and bonuses. This is unconscionable after you caused us to suffer the brunt of the pain from your unbridled greed. We cannot understand why you receive any compensation at all. You should have been first in the unemployment line instead of us.
Much has been said about the way we conduct proprietary trading in our capital markets. Some believe we have tilted the playing field in our favor through high frequency algorithmic trading. Nothing can be further from the truth. High frequency trading is not illegal, as some would have you believe. Our partners at the SEC, many of whom were our associates when they worked with us at our banks, oversee our trading practices and set the regulations that all market participants must follow. The SEC has assured us that high frequency trading will remain an integral part of the stock market because of the liquidity it provides. If we are manipulating markets like some critics claim, show us the proof. High frequency trading is a major profit center for our business and we do not intend to abandon it. On the contrary, we are actively expanding this lucrative business platform. We are successful traders because we have the expertise and proprietary tools that give us an advantage. Trading is a combat sport and we are very good at what we do. Yes, it is possible to earn profits every single trading day because that is what you expect to do when you are successful. It is not statistically impossible as some claim. It is actually quite feasible when you are consistently good at what you do, as we have demonstrated quarter after quarter.
It is clear that high frequency traders have cornered the stock market. High frequency trading generates 70% of market volume and 70% of your profits. It is statistically impossible to make huge profits every single trading day unless you are cheating. Most Americans on Main Street believe the market is rigged and with good reason. Pension funds and mutual funds, where we have invested most our retirement savings, are not safe from the machinations of Wall Street. Investors are chum in a sea of sharks. We cannot depend on the Securities and Exchange Commission to protect us from market manipulation because the Commission is littered with ex-Wall Street employees. We are tired of getting front-run and pumped-and-dumped by high frequency algorithmic trading, which dominates market activity. The liquidity that high frequency trading provides is fragile and will disappear when an imbalance between buy and sell orders is detected by programmed computers. Main Street investors suffered big losses during the flash crash last May when we were stopped out of our long positions well below our specified sell price. We are afraid that this will happen again and next time it may not be a temporary phenomenon. The playing field is tilted your way and no one seems to care, certainly not the regulators that you have in your hip pocket.
Fellow Americans, we hope we have cleared the air. We are not crooks.
Wall Street, we do not trust you. You are crooks.
We stand ready to serve America as we have done since its inception. We are a proud industry, envied by every nation on the planet. Wall Street stands shoulder to shoulder with its brethren on Main Street. What is good for Wall Street is good for America. God bless Wall Street. God bless America.
The only time Jesus Christ was angry was when he chased the moneylenders out of the temple. Main Street Americans are angry and want to chase the moneylenders out of our government and out of our lives. In God we trust, but that trust does not extend to those who would do us harm. May God protect us and may God bless America.
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