Main Street Lags Far Behind Wall Street In Recession Recovery

BusinessWeek:

On the one hand, the Dow Jones industrial average once again danced around 10,000 last week. If U.S. gross domestic product rebounds as expected on Oct. 29 and turns positive for the first time in 15 months, it would confirm that the recession ended in the third quarter, at least statistically.

Meanwhile, back on Main Street U.S.A., the picture is drastically different.

Read the whole story: BusinessWeek

Comments

[Hugh-Leighton]

When are all those guys with the big degrees going to finally get it? "Trickle Down" doesn't work; "Bubble Up" does. This is a basic truth of economics that has stood since before the first gold coin was struck. The second basic truth is that the strength of an economic system cannot be measured by how much money is in the system but by how quickly it moves through the entire system. The boys at the top can do whatever they want between themselves and it won't make the system better or healthier. In fact it will probably make it sicker! Write a cheque for a family of four with less than fifty thousand a year in gross income and I can garantee that money will pass through as many as a thousand hands before it gets high enough in the food chain to be turned around again. One cheque for say a hundred bucks has the affect of one hundred thousand bucks in one pass through the system. China, a country with a history that goes back over seven thousand years, is actively creating jobs and pumping big money into the bottom end of their economy. Ask yourself this question; who will recover first, them or us? And who will dominate the world economy down the road; them or us?

[cloudmaker]

New rule: Let's stop using the Main Street versus Wall Street clliche. It was tired about two months ago and now it's exhausted.

[jackiero]

You're kidding? Small businesses are still hurting? I thought the economy bounced back because the DOW crossed 10,000. Gosh, this has to be a lie. The banks are doing so amazingly well, so surely the rest of the country is, too.

[vippy]

A jobless recovery, how in the heck can that happen. No jobs, no taxes and sooner or later our
politicians won't have enough to make a budget. It will bite them still I am sure. There is no such thing as a jobless recovery. They can fool us now with whatever the banks are pulling but then
that comes to an end as well and then what? That the DOW is overvalued everyone can see that,
because companies, railroad, transportation, etc. everything is gearing downwards. They are puling the same nonsense as they did with Bush when the DOW was hitting $ 14,000 and all of the companies showed red figures!

[sammansam]

The New York Times today has an article about former Federal Reserve Chairman Paul Volcker's crusade to bring back the Glass-Steagall Act. Obama isn't listening. The Act used to keep separate commercial and investment banking activities. The Gramm-Leach-Bliley Act of 1999 repealed it. Consequently "full service" banking behemoths like Citigroup and JP Morgan came to be, now allowed to participate in every financial activity imaginable. Many, including Volcker, believe this was a big mistake, and one of the causes of the financial crisis. I don't see it. At all.

[jws2346]

What I don't understand is, why the Wall Street heavies doesn't seem to see that the United States economy needs a strong and healthy Main Street to survive. They should be going out of their way to help Main Street with the mortgage crisis, the credit card crisis, the foreclosure crisis, etc (and I ain't talkin' about the deadbeats either) Without a vibrant middle class infusing capital (having jobs) into the American economy what good is having stock investments in the American consumer companies ( food, mortgages, Health care, etc). How many Nations can afford, on a daily basis, the expense of the lavish US lifestyles, the big cars and the gas to run them, the energy bills, Health care bills, education costs like college enrollment, to name only a few of the expenses. Can a person in Angola afford to pay $15 USD bucks to see a couple hour film, can a person in Paraguay afford a $25 USD dollar dinner twice a week, can a person in Iraq afford to send their children to Harvard or MIT. I'm talking about the majority of people in these countries, not the royal families or the 1% rich upper class.

[LHoney]

It's a global economy now... they don't need us. there are plenty of main streets around the world with governments that wouldn't have let this happen to their economy and make sure their citizens have health care and don't lose their homes. We are going to be left in the gutter by these corporations since they own our government and they don't need us anymore...

[jws2346]

Unfortunately you have a point, blast it!

[LeLoup]

Well...duh!

Give to Main Street:
1) the same access to TImmy Geithner that Wall Street has.
2) the same power to sway Congress that Wall Street has.
3) the same capability placing their people at every echelon of the Administration that Wall Street has.
4) the same amount of money, no strings attached that Wall Street has.
5) the same access to the punditocracy that Wall Street has

and you'll be able to bet your last zloty that Main Street would be far ahead of Wall Street into this recovery.

Alas, our deciders, from the President down, consider the bankers to be a special class of citizens, above the rest of us.

BTW, I'm still waiting for the Obama faithful (Daily Kos included) to explain to me why Wall Street is so much more important than Main Street. And puhleeeze, don't give me that nonsense that the bailout was Bush creature, blah blah blah. This Administration had a GOLDEN once in 2 generations opportunity, to ride the tsunami of indignation present when they took office, to ram a ton of much needed reforms of the financial sector.

It didn't! This is the only thing that matters; no amount of spin from the Jedi of Political Rhetoric will change this fact.

One has the right to assume it has to do with political donations, assumption that is backed by a cursory check at past campaign contributions. Embarrassing, but true.

[Hugh-Leighton]

I'm sorry but you really don't know anything about economics and how and why certain systems fail. The present crisis across the globe is happening because most people, insiders and outsiders, ignored the basics or never did understand them in the first place.

[Jannsmoor]

Of course main street is not recovering. The whole structure of the government bailout was to insure the Wall Street Profiteers got bailed out - not the middle class. Henry Paulson doesn't even know what a middle class person looks like. He spends all his time with his rich Wall Street cronies.

And George Bush wasn't going to bail out the middle class. He's a libertairan. He believes government should not effectively regulate anything, hence his imprimatur on Paulson's bailout, which had no strings attached.