Why invest in Wall Street and Main Street?
By Steve Adams Finance Writer
July 6, 2011
Why invest in Wall Street and Main Street? Many Americans and other investors around the world are increasingly investing in International firms than those firms that give jobs to American workers. Whenever you invest the greater the expected return the greater the risk of losing it all. For years, we have plummeted ourselves into a deep recession by not realizing that the decisions we make will affect the buying power of our fellow Americans and we are failing to see that we are failing our fellow Americans by making decisions that hinder the ability of people in our country from buying from our current employers.
In the 1970’s, we fell into a recession and one of the commercials that we use to see on TV was “Buy American”. It is true that a lot of American jobs have floated across the ocean to countries that pay their workers less than we do in the United States. Although you may not realize the ramifications of your decision to buy cheap clothes or electronics is hurting your wallet due to your failure to see the big picture. People’s views of the economy are often made by the news that comes from Wall Street and affects Main Street in a way that the common American fails to understand.
A lot of manufacturing jobs were replaced by service jobs that paid less than manufacturing jobs. We eat out a lot more often than we did when we fell into a recession in the 1970’s. When banks started failing we failed our fellow Americans. We panicked and we stopped eating out we stopped going to the movies, the ballgame, and by doing so we failed our fellow Americans. We all heard about the Great Depression and did not realize that it was bad decision making and failure to accurately represent the financial statements of these banks that led to their downfall and it was their unethical acts that were rewarded with a bailout. These banks gave risky loans to people who had a bad credit rating or to people who did not understand that a variable rate mortgage is the most unethical but lawful thing that I have ever heard of. These loans caused peoples mortgages to almost double overnight. It’s easy to look back and see that we should have bailed out the American people who were strapped by a mortgage that had almost doubled overnight. If I could go back in time, I would say that what politicians should have done is allowed other banks such as Wells Fargo or other banks who offered home owners a more ethical fixed rate mortgage to buy out these banks for pennies on the dollar rather than give billions to those who made unethical loans that got us into this mess in the first place. I will admit that if I was President Bush I probably would have made the same mistake had I not known a friend of mine who seen her mortgage go up from $450 a month to $780 overnight. A lot of these banks failed because they misrepresented their financial statements and broke the rules made by people in the Accounting Profession. This caused the managers of these banks to make bad decisions due to an inaccurate representation of the firm’s financial well-being. This is why we passed the SOX Act of 2002 because the misrepresentation of a firm’s financial well-being causes a company to make decisions based on inaccurate information.
The next mistake we made was not investing in our fellow Americans. We drew money out of our investments, we stopped spending money on those things that we enjoyed, we tightened our belts, and we put that nice waitress or waiter at our favorite restaurant in the unemployment line. We did this by failing to realize that it is economy that is driven by people’s beliefs on how well things are going and by panicking and letting the news about Wall Street cause us to panic. Often times when people look back on the Great Depression they talk about how it was our panic that caused the recession to lasts for so long. This is the reason why our recovery is so slow.
How many times two years ago did you listen to the advice on TV? You heard them talk about how it would be wise to cut back on spending, stop eating out, or how risky the stock market or the financial crisis was. If we all would have continued to invest in America both on Wall Street and Main Street this recession would have ended before it began to cause people to lose their jobs. This is why I posted a video for all of you to watch. The best way to get ourselves out of this recession is to have faith and invest both in Wall Street and Main Street. The person who waits on you at your favorite restaurant or movie theatre is also the person who affects your wallet. When your favorite place to visit loses customers like you who panic due to the news in the TV’s and magazines. They lose hours, their jobs, their spending power and this has an effect on you. You are not helping yourself or your fellow Americans by taking your money out of Wall Street or failing to visit your favorite place to go on a Friday night on Main Street. You are only falling into the same panic that caused the Great Depression and this Great Recession to lasts so long. The entire country and the entire world are affected by every decision you make and your failure to invest or spend in America is why this recovery has lasted so long. The best way to end the recession and speed up the recovery would be to go back to your favorite place to invest or enjoy your Friday night with your loved one this weekend.