Until last month, there was only one place in my neighborhood to get truly amazing quiche. Now, there are no places to get quiche, because my favorite bakery has closed up shop. Perhaps, like many other small businesses today, they found their line of credit reduced or their loan payments unmanageable. Perhaps the once steady flow of customers trickled to a point where the money coming in could no longer pay the bills. After all, few people can afford to treat themselves to an occasional red velvet cupcake or a ham and cheese croissant when a gallon of milk can cost as much as $4.
People are constantly asking me why those of us who don't work in finance should support the bailout expected to pass the House on Friday morning. No one wants their tax dollars lining the pockets of investment bankers or filling the parachutes of Wall Street CEOs. We have schools, hospitals, and communities that could stretch the $700 billion further. We could invest a fraction of that to keep social security off death row. How is Wall Street's crisis our problem?
You need look no further than your local bakery to understand how Wall Street's downfall is Main Street's problem.
I don't have to wait for a table any more at my favorite Italian restaurant on the occasion that we go out to eat because there are fewer people in line. I can't run to the Gap at Madison and Dearborn on my lunch break for a pair of trousers or a sweater because it recently shut its doors for good. The coffee shop nearest my house has cut its hours in half, meaning that by the time it opens each morning, I've already been at work for three hours and no longer need the caffeine.
This isn't an investment banking crisis; this is a credit crisis. Small businesses are losing profit because their customers' purse strings are tighter. They are losing their lines of credit, and some businesses have lost their banks (like WaMu) all together. New entrepreneurs can't qualify for business loans without exceptional credit. And just like you and me, Main Street businesses pay bills to keep the lights and heat on.
The outer aisles at the grocery store (the ones with the meat, seafood, produce, and dairy) are less crowded, and the more economical prepared food aisles are swamped. The parking lot at Whole Foods is empty, while the lots at Costco and Wal-Mart are overflowing. There are fewer cars on Lake Shore Drive, and more people waiting at bus stops and on train platforms. And who can buy a car now, when credit requirements and gas prices are soaring?
On Wednesday, Senate Majority Leader Harry Reid (D-NV) threw his support behind the bailout bill, claiming:
"If we do not act responsibly today, we risk a crisis in which senior citizens across America will lose their retirement savings, small businesses won't make payroll ... and families won't be able to obtain mortgages for their homes or cars."
For decades, our leaders have allowed our nation's economic fate to be inextricably linked to Wall Street's. Through deregulation and lack of adequate oversight, leaders have put the security of many into the hands of few and looked the other way. People who were planning to retire this year watched in heartbreaking agony as their life's savings dipped lower and lower until they nearly evaporated; a lifetime of hard work gone in a week.
As Nancy Pelosi pointed out on Monday, the conservative agenda of deregulation has put us into a perilous financial crisis. Voters who want to see our nation pulled out of the dumps would do well to look long and hard into the record of a so called "Maverick" reformer who has supported deregulation at every turn. Where has this gotten us? Look around you.
I'm no happier about forking over $700 billion from our treasury to Wall Street than any of you are. But the fate of Main Street depends on it. This week, we are all living at the intersection of Wall Street and Main Street, and it is not a beautiful day in the neighborhood.