08/15/2011 09:51 am ET Updated Oct 15, 2011

Help for Main Street, Not Wall Street

The government has launched a number of bailouts and stimulus programs in recent years, sending trillions of dollars down the drain.

Like many, I am angry. Washington and Wall Street are tied at the hip and spend most of the time talking only to each other. They are connected socially and economically and have media outlets devoted to promoting their philosophies.

Wall Street and Washington are not having a positive impact on my world.

The public is outraged about out-of-control bonuses and out-of-control lobbyists, and I keep waiting for someone on Wall Street and Washington to get it. I am starting to think they never will. Politicians make gestures to keep us from rioting, but as soon as our backs are turned, Wall Street goes right back to its old ways.

Wall Street and Washington developed the saying "too big to fail." The idea is that big institutions must stay in business, no matter how badly they screw up.

The Soviet Union operated on the same premise.

Wall Street and Washington do not understand that entrepreneurs and small-business people have been the force behind economic growth the past few decades.

Advances in technology have made it possible for smart people who live in Kentucky, Oregon, India, and China to compete with any business Wall Street has to offer.

This trend toward small, entrepreneurial businesses that are located far from money centers isn't going away. Yet, Washington keeps throwing countless dollars at these "too big to fail" money losers.

After the Depression, we learned a lesson and put a variety of regulations in place. After the Depression, banks were relegated to banking and insurance companies were relegated to writing insurance policies.

That worked well for more than fifty years. Then deregulation became the hottest fad and gave us companies such as Enron and many others.

In the modern world of deregulation, Citibank, a bank, was allowed to merge with Travelers, an insurance company. The new company, Citigroup, had to suck down billions in bailout money to survive. This "too big to fail" business model is not bringing us any advantages.

One reason Main Street gets overlooked is we don't know anyone in Washington or on Wall Street, and we really don't want to. Main Street's customers are local, and a lot of them, including me, deal with local and regional banks that know them and their businesses.

If Wall Street understood their customers, they would not have spent billions on credit default swaps and mortgage-backed derivatives.

People who start their own businesses don't need bailouts. Businesses in a startup phase aren't in need of tax cuts. What small businesses need is cash flow, access to capital, mentors, and guidance.

But, above all, they need the proper mindset. People who work for large companies expect their employers to look out for their concerns. Entrepreneurs are willing to look out for their own concerns.

After years of massive layoffs and cuts in employee benefits, workers at many corporations realize that their companies don't care about them. The corporation's only concern is making Wall Street happy. With big companies continually cutting back and jobs at large corporations becoming scarce, many people are now looking at entrepreneurship.

As Bob Dylan said, "When you ain't got nothing, you got nothing to lose."

In order to help Main Street, the following has to happen:

1. No more bailouts for Wall Street. Some Wall Street firms like Bank of America have had a hard time recently. They need to absolutely know that they need to solve their problems on their own and not depend on any help from taxpayers or the federal reserve board.

2. Make it easy for Main Street to borrow money. Interest rates near zero are wonderful for Wall Street but if Main Street doesn't have access to that capital, it is useless in helping small businesses.

3. It's a long time until health care reform kicks in 2014.
If we get a Republican president in 2012, we will probably never see it. Something needs to happen in the near term, liking making Cobra extend longer and become more affordable, to allow people to leave large corporations and hang on to the health insurance.

4. Wall Street needs to be regulated again, like it was before 1999.
That will restore some confidence in the overall financial system.

Don McNay, CLU, ChFC, MSFS, CSSC of Richmond Kentucky is an award-winning financial columnist. He is the author of the book, Wealth Without Wall Street: A Main Street Guide to Making Money, which will be released on September 20.

McNay founded McNay Settlement Group, a structured settlement and financial consulting firm, in 1983, and Kentucky Guardianship Administrators LLC in 2000.

McNay has Master's Degrees from Vanderbilt and the American College and is in the Hall of Distinguished Alumni of Eastern Kentucky University. McNay is a Quarter Century member of the Million Dollar Round Table and has four professional designations in the financial services