This commentary originally appeared on MainStreet.com April 23.Dear Wall Street, This is your cash-strapped cousin, MainStreet, writing. How the heck are you? It's been a while. You seem to be doing great. I know you were going through some tough times, with the whole financial meltdown, but with the big bailout, the stock market coming back, and those enormous bonuses, it seems like you're back on top. And that's just super. We're happy for you. But to be honest, cuz, things aren't going so great here on Main Street, and that's why we're writing. You see, that recovery that you guys are enjoying on Wall Street, the one that's funding your huge salaries and bonuses, the one that we made possible through a taxpayer-funded bailout... that recovery hasn't really made it to Main Street. I know you're super busy following the markets and buying gold and stuff, but the news from Main Street remains pretty troubling. The unemployment rate is stuck at 9.7%, which is close to a 20-year peak, foreclosure rates continue to rise while housing prices drop and personal bankruptcies are up sharply. Plus, banks still aren't lending. It's tough to get a mortgage, but it's REALLY tough to get a small business loan. According to some estimates, the credit market is tighter than it has been in 30 years and it could only get worse for us when interest rates start to rise, which is bound to happen sooner or later. Listen, I don't want to be a buzz kill. I know you guys are just starting to breathe easy again and enjoy your recently reconstituted giant piles of money, but we need to have a talk. People say that this financial crisis was everybody's fault. They say that Wall Street played a role, but that Main Street shares some of the blame too. But let's be honest with ourselves, and each other. We know that this is almost entirely your fault. Relax. This is not about blame or finger pointing, and yes, people on Main Street took on risky debt that they couldn't afford. That happened. But why did that happen?
Why were banks throwing money at the most high risk people? They did that so that their mortgages could be bundled into securities that were overvalued and would ultimately fail so that certain people on Wall Street could bet against them. It's all laid out in the SEC's lawsuit again Goldman Sachs ( GS) (and I know you have your own ideas about Goldman). Now, President Obama has outlined a number of reforms, and I'm sure you're worried that this is all turning into a big media showdown between Wall Street and Main Street (and I know you have your own ideas about what Obama should be saying to the American people). But let me assure you, Main Street isn't looking to take you down. I mean, Main Street doesn't even exist in the same way that Wall Street does. You're one entity that has relatively uniform and clear ideals: the preservation of the free market system with as few encumbrances as possible. On the other hand, there are thousands of Main Streets filled with millions of people and many different points of view. We reached out to our residents and found a couple of thoughts that that we'd like to share with you. David Backlin from Fort Smith, Ark., asks, "Why should the general public have to pay for THEIR mistakes?" A lot of people on Main Street feel this way, and I'm sure you can understand why. With regard to the bailout, the answer, as painful as it is to admit, is that it may have been cheaper for us to pay for your mistakes in the short run than do nothing and watch us both fail. Or maybe you just bought off a bunch of Senators and Congressman. As far as all of the other forms of payment - primarily the lost equity and income - well, we shouldn't have had to pay that. But that's all water under the bridge, and we're trying to look forward now. Which brings me to another voice from Main Street that I'd also like you to hear, Wall Street. This note comes from David Riley, of Shelby Township, Mich.
"The banking industry has EVERYONE by the short hairs, but such is a debt/creditor system... I've come to this resolve that either Main Street (Wall Street included) will run free, or the government will run free; if I have to choose which gets to run free... it should be Main Street (& Wall Street). ...Main Street (& Wall Street) free = freedom, and the price we pay for being a free society. The government running free = tyranny for the people! There's really no way around this (save the life hereafter)!" Now, Mr. Riley makes some sense here. First, he points out that we're in this together. Furthermore, Main Street is pretty divided on the question of whether more regulation will fix these problems. So whether or not our often incompetent federal regulators manage to gain some more oversight over the financial industry, we'd like to ask you for a favor. In exchange for us funding your financial adventures - with our taxes, 401(k)s, investments, etc. - we'd like to ask you to exercise a bit of restraint. The next time you're putting together a deal, look to more than profits as a goal, and take a few minutes to consider whether or not it will have a negative impact on Main Street. This is where you've got to be really honest with yourself, Wall Street. If you conclude that the deal is bad for Main Street (and bad for America), maybe you should figure out another way to make money. Stop smiling. We're serious about this. We know you guys are very good at pulling the wool over the eyes of the SEC (when they happen to be paying attention) and we both know that even if the government passes new laws, there will always be a few guys on Wall Street smart enough to figure out a way around them. Sooner or later the rest of you guys will catch on, and before we know it we'll have another meltdown. So, we really need you to step up to the plate here and promise us that you are really going to change. It probably wouldn't be a bad idea to enroll in some sort of 12-step program and start seeing a shrink . I think a little introspection could be good for you.
Anyway, in exchange, we'll continue to funnel our money through 401(k)s and IRAs, and we might even bail you out if you get into some real trouble. We're not asking for a mile, more like an inch. We'll also try not to think about the fact that the average CEO makes as much as 262 times that of the average worker (in 1978 it was only 35 times as much) or the fact that Goldman Sachs paid out record bonuses this year (somewhere between $19 and $22 billion total - an average of more than $500,000 per employee). We'll also try not to think about the fact that you're probably reading this article on the deck of your Wi-Fi enabled, $12 million yacht in the Caribbean. Yours, Main Street