The economic meltdown: Main Street gets mad

Posted Sep 25th 2008 3:31PM by Gary Sattler
Filed under: Columns, Recession, Financial Crisis

In this post, Gary E. Sattler tries to explain Main Street to Wall Street. Gary asked his friends and neighbors, took a virtual tour and asked his eBay's message board frequenters what they thought of the crisis on Wall Street and the looming economic crisis. Read what Main Street has to say.

I've spent quite a bit of time lately canvassing friends, neighbors and coworkers, to get a feel for the grassroots reaction to our current economic turmoil. I even went so far as to solicit opinions from discussion board frequenters on eBay. It's been an interesting exercise, if a bit heart wrenching and emotionally wearing. To say the least, it's been a lot less fun than going to a ball game.

A couple weeks ago, I didn't hear much spontaneous conversation about the subject. At that time, I had to solicit individual opinions. For the last week, however, it's been quite a different story. People have begun discussing their opinions on the matter in earnest. Everywhere I go, someone is talking about how disgusted they are with the current economy.

How people are feeling is best summed up in one word -- angry. That anger runs the gamut from slightly agitated to positively fuming. Each person's level of anger seems to be dependent upon their depth of understanding about what is going on, and their interpretation of how deeply it affects them personally. Generally speaking, the more they understand it, the angrier they are. Age also seems to play a significant part in determining the individual level of angst with the situation. People over 40 seem to be the most upset, while most people under 20 almost couldn't care less. This dynamic is probably best attributed to the severe beating that retirement savings have taken, the tendency for incomes to level off as we age, and an increased understanding of what a widespread economic collapse could mean to us all.

I have run into some people who are simply taking the situation in stride. In fact, that reaction made up the bulk of the answers that I received in response to my solicitation for input from eBay members. Some of my respondents see the situation as nothing more than business as usual and nothing to get upset about. Others write it off as a wholesale error in judgment that we must find our way around. While the bulk of my eBay respondents were quite breezy on the subject, most of them are still just plain mad about how things are going with American finances.

What I did not encounter through my investigating was a sense of hopelessness or deep seated fear. No one was wringing their hands and muttering to themselves about what we should do now. Most of the people I communicated with left me with a sense that they will do tomorrow what they need to in order to get through tomorrow. Those who didn't impart that feeling, tended to be from the shoulder shrugging, live-for-the-moment crowd.

Where people are placing the blame is sometimes dictated by which side of the political aisle they favor. Generally, though, party line sentiment came from those who tend to be party line extremists. That dynamic was especially prevalent with my eBay-based respondents. Otherwise, people seem to be pointing the finger in three particular directions. Folks are blaming the banking system the most, the government in general, and the population at large. However, when weighed against the combined sentiment of all the people that I've talked to, the three mentioned potential perpetrators together, take a back seat to the one thing which most people concluded was the problem -- people are overwhelmingly placing the blame on greed, plain and simple.

Most of the people I contacted are really quite uninformed about the several base issues that have put us where we are today economically. They know that real estate has crashed, but they don't know where to place the blame for that. They know that energy prices have gone through the roof, but they don't know who made that happen. They also know that our dollars have gone flat, and that some big banks may be getting a free pass on some worthless debt that they can no longer collect on or sell. However, when you ask people questions, such as who caused this, and why it happened, concise, informed answers are seldom forthcoming. That, I surmise, is the reason that the public has been so noticeably quiet. They just can't form a consensus about exactly who is at fault and why we're seeing these changes.

What people are doing about it, ranges from absolutely nothing, to completely revamping their investing and budgeting strategies. As can well be imagined, virtually everyone is tightening their belts: vacations have been bypassed; new cars have been put off until another time; home repairs and improvements are getting more careful consideration before being initiated -- everyone seems to be collectively holding their breath.

Many of the people who have immediate personal control of some or all of their investment portfolios, have taken seriously conservative paths. Some of my respondents have exited the equities markets completely, opting for positions in commodities, such as platinum, gold, oil, and silver. Others argue that deeply conservative positioning has become part of the problem, and they insist on maintaining their current stock positions. No one indicated to me a distrust of their local banks. No one has told me that they cleared out all their bank accounts. For the most part, just about everyone is indicating an increased focus on their own personal financial responsibility, whether it be by choice or by the force of necessity. One of my respondents even indicated that he is already preparing for job loss and relocation, stating that he had to relocate three times during the last recession.

The summary picture is not as dark and gloomy as some people might have you believe it is. At least from the perspectives given to me, that's the way it seems. The public at large clearly appears to be taking very rational steps to adjust to the economic changes around them, even though they may not be receiving rational explanations for why those changes are occurring. In my opinion, the recent Presidential address regarding the $700 billion bailout provided little advantage to those who are waiting for more information about our dilemma. In truth, although President Bush, our first ever MBA holding president, explained the situation fairly well, I felt that he explained it in terms which he hoped would simply make us all a bit more complacent about it. It's quite obvious that the administration wants no resistance against its lofty bailout proposal.

I have been provided with the clear impression that most people are just plain fed up with how badly big government has fallen out of touch with them. At this point, I believe that any economic solution implemented, which falls short of putting Main Street America in the top tier for assistance, shall meet with a seriously ugly reception at the hands of a public that is just plain angry. The public knows that things are bad, and they surely don't like it. They are also not willing to wait for as much as $1 trillion of their hard-earned tax dollars to trickle back down to them through a financial system that is so obviously out of control.

Tags: 700 billion, 700Billion, bail out, BailOut, banks, featured, federal reserve, FederalReserve, presidential address, PresidentialAddress, recession

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Reader Comments (Page 2 of 2)

9-26-2008 @ 12:47PM

chris ramsay said...

Well what a fine mess were in now.I have one question to put out here. Who gets to decide what these houses are worth the banks with the bad loans? If this is the case then they should only get half that amount, then when the house is sold they get the balance up to the point of the loan the rest goes to the tax payers. If the house doesnot sell for the loan amount the bank eats it this still gives banks enough money to operate on and its not as much a burden on the tax payers Now you know what that house is really worth in a real market place.

9-26-2008 @ 12:52PM

gccms said...

Say No To Wall Street Bailout!

Trillion Dollar March

September, 27 2008 10:AM

Capitol West Lawn, DC

http://truemajority.wiredforchange.com/event/index.jsp?event_KEY=479

9-26-2008 @ 12:56PM

gccms said...

Say No To Wall Street Bailout!

Trillion Dollar March

September, 27 2008 10:AM

Capitol West Lawn, DC

http://truemajority.wiredforchange.com/event/index.jsp?event_KEY=479

9-26-2008 @ 1:24PM

Lisa said...

Mr. Sattler, I don't know who all you interviewed, or where you found them, but you obviously have a gift for finding people with their heads in the clouds; either that or your online interviews have been with 12-year olds. I live in one of the smallest towns in the country (population 300), and everyone I have talked to in the last 3 or 4 days has an opinion on where this thing started, and whose to blame for it. For starters, it began with government believing that American people were either too stupid or too disinterested to know or care what was going on.

Deregulation of business, outrageous interest rates, unfair credit score determinations, lack of oversight, deregulation of banking industry, and the sheer inability to let the rest of the world deal with their own problems while our elected officials take care of our country's are just a few places to start. What we have here is 30 or 40 years worth of a Federal Government who encouraged people that they could have now and pay later, paying people to not work, and spend, spend, spend. Who is responsible? Everyone. Every legislator who ever signed a bill authorizing the government to give money for people to not work, from the farmers who were forced to not farm in the 70's/80's so that a foreign country would have an export right down to welfare (and no, I don't mean Social Security...we work and pay into that); every lender who ever said to anyone that "the ARM has a lower interest rate. Yes, the rate will go up eventually, but that's several years away, and it's designed to grow with your income" or "Yes, we can give you the $40,000 mortgage you need and can afford, but it has to be $75k, that's the lowest mortgage our company can write"; every president or congressman who ever backed an "economy boosting" bandaid, like deregulation of business, deregulation of banking, or temporary rate reduction; every single one of us who ever took out a mortgage we couldn't afford, or who charged to a credit card and then made only the minimum payments; every legislator who voted to keep minimum wage lower than what the average American could actually live on; every one of us who voted these jackasses into office, and everyone who didn't vote because they were disgusted with politicians, didn't believe their vote counted, or thought it was better not to because they didn't fully understand the issues. Everyone played their own part in this thing, to some degree. The solution? Let the banking industry crash, learn from our mistakes, and start over. Anything else is just another bandaid.

9-26-2008 @ 11:00PM

Jeni Tyler said...

Has anyone thought about the job out-sourcing as the bottom line cause of this?

You have a mortgage and a job; you loose your job (that relocated to Mexico) you have faith that you will find another so you rely on credit cards to bridge the gap until you find employment, right? This is the US, no problem.

Until you realize there are no jobs to be had, your credit cards are maxed, savings and retirement have already been blown because you had to make all your bills on time. Then you wake up in the morning and realize they have reposed your car over night and the Sherif is knocking at your door with a final 24 hour notice to be out of your forclosed home.

SO WHERE ARE THE JOBS???????

9-26-2008 @ 2:03PM

skipperrc said...

when i make a mistake i have to pay for it. if these big finance institutions make a mistake let them pay for it.. if i miss 2 payments they foreclose on me. if they cannot pay their debts foreclose on them. as you do , so shall it be done to you. what's good for the gander is good for the goose. where is the stopping point for government to hands off peoples money.

9-26-2008 @ 2:24PM

ed1305 said...

One of the problems is that people view their worth based on the current stock market value,and seem to ignore the fact that you must sell to realize the profit. Until then it's just imaginary money. Of course, they don't want to sell when everything is rosy, just complain when it starts to go bad. The only real money comes from dividends which can be terminated at anytime the company sees fit, and some of the hot stocks give lousy dividends. (Exxon at a little over 2% when they are breaking all profit records for business) If we just let the market adjust itself, I will loose a ton of "imaginary" $ unless I change my investment strategy. Even if I just hold everything, it will recover it's value eventually. The Government needs to clean up it's own house and reduce spending. It seems to me that all of the people involved in overseeing the market and economy should be the first to go, as they have failed miserably. Why would we want them to have even more control over it using taxpayer money? Common sense is no longer common.

9-26-2008 @ 2:39PM

Lori Dabney said...

What happened to the SEC?

9-26-2008 @ 6:06PM

rkidd said...

I INTEND TO GIVE ALL OF MY FUTURE EARNING TO THE GOVERNMENT TO HELP US OUT OF THIS FINANCIAL CRISIS.
After my first $20,000,000

9-26-2008 @ 10:47PM

Howard said...

I think Phil hit the nail squarely on the head. How this all began is because of credit cards. I'm 54 and can remember a time when you couldn't get a credit card if your credit wasn't good. In the last ten years, they have been giving credit cards to anyone that can sign their name. Can you believe that a sophmore in college is hit by an average 14 credit card companies in his first two weeks of school? Come on, these students are usually working at minimum wage jobs part time. Did you know that the average credit card user will pay back over $3 for every $1 they rack up on a credit card? Did you know that the #1 reason for suicides in USA is credit card debt? Everytime I get one of those credit card aplications, I send it back with this question: "How Many People Killed Themselves Today Because They Owe You Money?" written boldly across the application.

9-27-2008 @ 2:07AM

Danny Sanchez said...

$700 Billion Dollar Bailout. Republican and Democrats mostly plutocrats. Wait, folks when this passes then you will see a trillion dollar bailout. As a freedom fighter and conspiracy theorist JFK in his American address was right. The illumati is killing us slowly.

See my website on Youtube.

9-28-2008 @ 11:13PM

DAVID DUVALL said...

Here is the progession of the financial crisis....

1/3 standard mortgage lending thrown out door

congress mandates creative fianciing be accessible to poor, financially ignorant people

Housing market continues to sore because unqualified, poor, and ignorant people become the new fuel for the fire. Corporate America exploited them, Socialist America falsely believed in them. Both parties forsake oversight committes because both percieve there ideology prevailiing. Both Ideologies were doomed to failure because of one major oversight from the american people, and congress. Man is fundamentally flawed by Sin and corruption.

You people can point fingers all you want, and each live in denial of truth and each is doomed to failure. So I laugh, and at times I cry of just how easy it is to manipulate you people, and how eaisly you place hope in feeble words and ideologies. Obama is a pile of play doo molded into a charicature of somthing we all want to be, a savior. he is a joke, a fools fool and I dare say evil in many regards. God have Mercy on Us all, because if we were to recieve what we deserved, blood would run through the streets. I fear for my fellow americans because they have not the forsight to see the consequence of their actions. John Paul II stated it best when he called our culture, " A culture of death " and the Day will come when we Reap what we sow. Our Saviour stated it best in the depth of His own suffering when he stated " Weep not for me, but for your children " We no longer heed this warning awash in scandal, and ideologies, false hope and heretics, money and possessions. Life is a gift, centered on Hope which is Christ. No one sees before them that this upheaval must take place, as grand and marvelous as the big bang itself. A new creation has been Promised, for the "Kingdom of God is at Hand " through this upheval and discontent, a new Heaven and a New Earth are being formed before our very eyes. This is what Christ meant when he stated, let them who have ears hear, and let them whe have eyes see. Salvation is yours for the taking, but you must walk to the tree of Life, the tree of Life which Christ hangs and eat of this fruit, which is the Body and Blood of Crhist, " If you wish it have eternal life in you, you must eat my flesh and drink my blood." Arise from darkness people, arise from death and enter into new life, a new covenant, a new proimise, the fullfillment of Hope which is Christ Jesus.

10-01-2008 @ 10:47AM

TMFTHC said...

In the last few days I have read & watched how everyone (Citizens) is wanting to blame Wall Street for this big economic mess that our country is in... why not blame the consumer that filed for & got a flexable interest rate on their new home loan (they bragged about how extremely low their interest rate was ) which allowed them to afford a much better, bigger & more expensive home & they enjoyed that low rate of interest but with everything going up in price in todays economy its was a natural thing that this flexable interest rate started to climb & in some cases their house notes doubled & so when they couldn't/wouldn't pay the note, they just simple walked a way from their obligation, leaving the Banks & Mortage Co. holding the bag on their obligations...whats wrong with blaming the consumer for buying into a large mortage that he should have known he couldn't afford but lots of these consumers only saw that they could keep up with the Jones's that live next door or down the street ( it like the old saying "everyone can drive a cadillac for a month or two") but once the newness wear off they find it hard to pay for, lets not forget, Loan Officers are not Policemen but consumers should be the policemen over their own household budget, its just simple mathematics but these consumers are like children & don't know the difference between wants & needs, we as consumers want lots of things but most of us buy only what we truely need........

10-01-2008 @ 11:08AM

dayle said...

how about giving the money to the people so we can pay our mortages, student loans and make our car payments? the money would go right back into the economy, stimulating it. the greedy dogs on wall street with their hands in the pot so they can maintain their lifestyle have brought us to ruin. let the "average joe" some help and you'd see a big difference.