First fear, then loathing, toward Wall Street
Crisis sparks anger over executive salaries, lax regulation
For Ebels, who lives in Falmouth, Mich., it’s also especially galling that people like him, who are already suffering from the weak economy, will now end up footing the bill for these chief executives’ mistakes.
“All (the bailout has) done is transfer all the indiscretions of all these people onto the shoulders of the taxpayers,” he said.
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As Americans digest a dizzying series of events that has left Wall Street shaken to its core, the mood on Main Street is shifting from fear to loathing. They are angry that government regulators did not do enough to prevent this — and protect them — in the first place. They are upset the government is proposing billions of dollars in bailouts for Wall Street, even as many regular Americans are struggling to hang onto their homes and pay their bills.
They also are livid that massive financial firms in which they trusted took wild risks and made incredibly bad decisions, in turn impacting their personal finances. Some wonder why, in the face of such a massive financial crisis, so few of these executives have stepped up to apologize for, or even try to explain, their actions.
Mostly, they think it’s despicable that many of these top executives could walk away with millions of dollars in their bank accounts, even as some average Americans see their retirement plans thrown into chaos.
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“It’s like adding insult to injury to then see that the government is going to step in, and these idiots that have done wrongdoing for a long time are still going to retain big bonuses,” she said.
Provencal thinks the executives should have seen these problems coming. And if they couldn’t foresee it, then she thinks safeguards are needed to prevent the same thing from happening again.
“I hate to see too much regulation in place, but the bottom line is, these institutions have not been self-regulating,” she said.
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At 59, Richard Martin also is dealing with a suddenly changed financial landscape. Martin had planned to stop working next year, using his 401(k) savings and two pensions he has earned to finance his retirement. But after watching his investment portfolio shrink for the past 12 months, he said that plan is looking iffy at best.
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In fact, to Martin, the bailout seems to just be giving corporations what they want, without forcing them to change their ways enough to prevent the same thing from happening again. If these companies have spent the last few decades arguing for deregulation, he figures they should be willing to live with the consequences of a free market.
“I would have loved to have seen a few of these go under, personally,” Martin said. “The idea of the free market is that the strong survive and if they’re not capable of surviving, they shouldn’t be in the marketplace.”
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“The thing you learn is people who seem smarter than you may not be,” he said. “That’s the scary thing.”
Full article: http://www.msnbc.msn.com/id/26841602/
After checking the real life examples of what is happening, check back previos notes posted in this blog.
Dow plunges; $700B evaporates amid Lehman failure
Mechanics and Financial Advisors
The Irony in the Big Picture.
The Shape of America’s Recession
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