ADJUSTMENT

Yoram Bauman, an Economics Professor at the University of Washington, is well-known for his sense of humor. He recently compared Italian and Wall Street Mafias: "Italian Mafia are gangsters who make offers you can't refuse, whereas financial mafia are bankers who make you loans you can't understand, I'm not sure which is worse."

Well, Professor Bauman, I can tell you the worse one is NOT the Italian Mafia. It is this Wall Street’s culture of entitlement that is hard to shake. Yes my friends, here is the punch line: Wall Street simply destroyed Main Street, pure and simple, and it is going to take years to rebuild it. The main root of the current crisis can be summed up in one word: greed, the first of the seven deadly sins. It’s just greed and concentrated power. For years, obscene profits were not enough. Profits must be enormous, obscene and astronomical. And so financial institutions overreached and failed and took the rest of us with them.

In his inaugural address, President Obama promised to wipe out "greed and irresponsibility" on Wall Street, to which I will say: good luck, Mr. President, the odds are all stacked against wiping out greed from Wall Street. Their greed is simply outrageous. Wall Street has its own appalling entitlement system that in hindsight can only be viewed as ludicrous and in need of massive reform. As we have seen, recently they feel entitled to unlimited bailout deals. The now famous Troubled Asset Relief Program (TARP) $700 billion bailout passed in the last days of the Bush Administration had no oversight as to how this money would be utilized.

According to the New York State Comptroller's Office, Wall Street bonuses totaled $18 billion in 2008, while the industry showed a net loss of $35 billion. Does that mean bonus payouts will double next year if the industry loses $70 billion? No wonder the public on main street, investor or not, blame Wall Street and the U.S. government for the economic crisis which is crippling our nation.

In our previous financial crises there was a difference between Wall Street and Main Street. Wall Street was populated by rich people in top hats and striped pants who dealt in stocks, bonds, futures, derivatives and others things that few ordinary people really understood. Little did we know that most people on Wall Street didn’t really understand them either. When there was a collapse on Wall Street, some of these rich people would jump out of windows, but as long as they didn’t fall on any of us, things were OK on Main Street.

Today, unfortunately, Wall Street and Main Street are pretty much the same street. Ordinary people who have never bought or sold a share of individual stock are now involved in the stock market through mutual funds, retirement plans, college funds and a number of other financial vehicles. And these days a lot of people watch TV news and surf the web for stock market information. For several years all this was fine. It seemed like you really couldn’t miss by investing in the market. The market had ups and downs, but it always went up eventually.

We have now found out, much to our dismay, that the stock market is not actually fueled by helium. It does not always go up. Even more distressing, the real reason for the collapse of giant financial institutions still seems shrouded in fog. It can’t all be because a relatively small number of people took out some risky mortgages. Unfortunately, these Wall Street types’ institutions took a lot of ordinary people down with them.

Will they be punished? Dr. Martin Luther King once said "The law may not change the heart, but it can restrain the heartless." For years now, heartless people have been running many of our banks and investment houses, and our laws have been insufficient to restrain them. Hard as it may be to believe, there is no law that mandates the return of compensation when an executive's actions destroy a corporation. There's also no law that says you can't be heartless. Being soulless isn't criminal. Being greedy is not illegal and virtually impossible to legislate against. And having no shame isn't actionable. To take legal action, federal authorities have to prove that these and other bankers had intent to deceive. So you see since we won't be able to prove anything, we won't see orange jumpsuits on the hundreds of bankers for whom they would fit.

What the markets need now, we hear every day, is confidence. But until there are new regulations in finance, there will be no rebound in investor or consumer confidence. Until the rules for the TARP plan restrict banks from paying bonuses during the deepest recession in decades, the taxpayer will not stop getting angry, nor until we see clear evidence that those who destroy companies will not benefit from their actions. In short, until we align consequences with their preceding actions, the heartless will continue on, free and unscathed.

What can we do? For starters, let’s all send a message to our representatives that we no longer trust the types of Merrill Lynch, Morgan Stanley, Lehman, Bank of America, Citigroup and others which are being kept alive by Uncle Sam's feeding tubes. We have already fed them billions of our generation and future generation’s hard earned money in cash infusion, TARP, asset guarantees, and whatever new acronym they create. Enough is enough! It has been said that “America is land of Freedom and Opportunity”. We must also remember that freedom includes the freedom to fail. This is important and very true. On our present course, government takes funds from companies and individuals who did the right thing to reward the failure and mistakes of others. The bailout buck must stop, and the sooner, the better. Let's just hope that when it does, it's not too late for the rest of us.

Will we pull through this crisis? Well according to a respected name on Wall Street, Mr. Warren Buffet, we will. ‘They say in the stock market, buy stock in a business that’s so good that an idiot can run it because sooner or later one will,” Buffet said, “Well, the United States is a little like that. We can take a little mismanagement from time to time."

I sure hope Mr. Buffet is right. Until then, we need to get rid of this Vegas mentality in all of us - and I mean all of us.

Since we have become so economically interconnected, what happens in our own Vegas no longer stays in our own Vegas -- it affects everyone. Knowing that, are we ready to turn off some lights in our homes? Is it possible for Americans to forfeit McMansion dreams, drive smaller cars, take public transit, embrace water restrictions, or live in more sustainable geographies? Can we stop needlessly spending beyond our means? In other words, will we finally accept the public policy and lifestyle changes that the real world now requires? Or will "Viva Las Vegas" always be America's motto?