Wall Street bad, Main Street good? That's too simple.
It's fashionable to blame America's economic problems on the financial industry. But the truth is that both Wall Street and Main Street got caught in the bubble mentality.
Wall Street and Main Street are both symbols. In one sense, Wall Street is more real than Main Street. You can point to it on a New York City map and can walk its eight blocks in 10 minutes. There’s a little bit of Main Street on Wall Street, small businesses like Red Eye Gifts, which features hammocks and sun catchers, and La Maison du Chocolat, which has teas and sweets. But in between is where the action is – the New York Stock Exchange, Morgan Stanley Smith Barney, and a hive of other financial shops that power the world of money.
Wall Street is the American epicenter of a complex financial system that spans the globe. While there are Main Streets in many American towns, they are intensely local and disconnected. If you visit one of the 10,000-plus Main Streets, you can’t say you’ve gone to the Main Street. Main Street is more of a metaphor for small business and middle-class values wherever they are found. Main Street is celebrated as the make-something-real, honest-day’s-work heart of the economy.
Wall Street has been celebrated, too, though most often in an ironic way as a place of financial whizzes whistling “Anything Goes” as they make or lose fortunes with other people’s money. At its worst, Wall Street is seen as a morally adrift Babylon that lives by the villainous Gordon Gekko’s credo that greed is good – a hyper-capitalistic mill of ever more exotic derivatives and trading schemes that nearly brought down the global economy two years ago only to be bailed out by the US government and to return to its old tricks.
Main Street is where most Americans’ hearts are. It is home to the saintly George Bailey and his savings and loan in the classic movie “It’s a Wonderful Life.” Although Main Street has been skewered, too (Sinclair Lewis assailed its gossipy conformity in his book of the same name), more often it is revered. Earlier this year, for instance, President Obama said people on Main Street “don’t understand why it seems like bad behavior on Wall Street is rewarded but hard work on Main Street isn’t.”
Both are caricatures. Wall Street isn’t evil. Main Street isn’t innocent. If Wall Street didn’t exist, it would have to be invented. Shareholding and trading are essential to a free market. Main Street, like Wall Street, lost its way in the years before the crash of 2008. From day trading to house-flipping to endless acquisition of new toys, Mr. Bailey slicked his hair back, donned a power suit, and smiled the mirthless smile of Mr. Gekko.
Then the bottom fell out. Christian Science Monitor correspondent Dante Chinni recently visited the onetime boom town of Eagle, Colo., and examined the slow and painful process it is going through as it struggles through the recession. Dante's Patchwork Nation project, which the Monitor and the Knight Foundation sponsored and is being carried forward by PBS, has examined 12 distinct types of communities across the country during the past two-and-one-half years -- the period that coincides with the onset of the Great Recession. Dante says he senses a profound unease in Main Street America, a concern that “the old rules have fallen apart and people aren’t sure if that is a permanent condition.”
Main Street has come back before. The Great Depression and severe recessions, such as the one from 1980 to 1982, eventually evolved into better times. But a telling fact Dante points to is that real income has stagnated for more than a quarter of a century and that the spending that powered the economy in recent years came from debt. Think about it. We were buying – and that was creating jobs – but it all depended on debt.
Main Street knows that was unsustainable. The Eagle residents that Dante interviewed acknowledge that the anything-goes world isn’t coming back. Just as rebuilding trust on Wall Street will take time and a change in bad behavior, rebuilding jobs on Main Street will take a slow, steady return of confidence. Neither will happen overnight. Both must happen.
John Yemma is the editor of The Christian Science Monitor.