Wall Street Liquid Culture – Tale of Two Capitalisms; Good & Evil: Reforming How Wall Street Works, or Too Big to Change…

Wall Street’s ‘hyper-elitism’ is made, not born… but while criticizing Wall Street for its detachment from Main Street morality, or for lacking morality altogether; Wall Street’s actions are based not so much on moral distance or immorality, but rather on different kind of morality, based on different reality…

Wall Street is socialized to see themselves as; smarter, superior, better educated, harder-workers than other people: They are wholly a meritocratic culture. They are socialized to view roles of corporations, government, and society in a particular way…

The prevailing beliefs are that corporations should be run solely for short-term profits of shareholders; that corporations ‘belong’ to shareholders; that government and the economy are ‘separate’ domains; and regulators need to ‘get out of the way’ to ‘let markets work’…

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Wall Street is ‘distant’ from Main Street, because they believe they are morally empowered to do so… According to Karen Ho; many of Wall Street’s ideas and imperatives are myths; corporate law has never required directors or executives to maximize shareholder value at the expense of other constituents; shareholders do not ‘own’ the entirety of an institution, but rather exchangeable residual claims that are created for tradability, liquidity…

Adherence to the Wall Street ethos has led to– short-termism, extractive cost-cutting (rather than investment in productivity), expedient restructurings, and demise of corporate/public common ground. Wall Street is ‘distant’ from Main Street, because they believe that they are morally empowered to do so…

They believed— and continue to believe– that greed, short-termism, constant buying and selling of companies, circumvention of rules and regulations, even inequality are all necessary evils, inescapable by-products of a system geared for greater innovation, heightened competitiveness, and ever more efficient markets. They also believe, often unconsciously, that they possess a brand of unassailable meritocratic credibility that makes them deserving ‘experts’ on the economy, no matter that their economic ideas and practices are  often prone to failure, implosion, contradiction…

While Wall Street undoubtedly achieves some of its ostensible goals– making markets, collecting savings for investment purposes, increasing retirement portfolios (though in highly volatile and unstable ways) for the upper-middle class… the lessons of 2008 have amply demonstrated that Wall Street takes advantage of ‘common’ people to line their own pockets and create inefficiencies and problems that could lead to future crisis…

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In the article What’s Wrong with Wall Street by Barbara Kiviat writes: Wall Street shapes not only the stock market, but also the very nature of employment and how workers are valued– there is constant job insecurity, downsizing, constant restructuring, a constant need to retrain to have an adaptable skill-set and be flexible… In a sense, job security and stability have been liquidated…

These firms sit at nexus; they are financial advisers and sources of expertise to major U.S. corporations and institutional investors, and from this highly empowered middle-man role, what they say has a lot of influence… The model that came to dominance in the 1980s was one of constant change: The idea is that companies must constantly be moving, restructuring and changing, in lock step with the markets…   rather than stagnant and inefficient, like a lumbering brick…

Understand that Wall Street are ‘liquid’ people; they constantly buy and sell– assets, investments, companies… it’s the culture. According to  Guruprasad Muthuseshan; Wall Street is the symbol of capitalism and there is a general belief that working for Wall Street puts them at top of hierarchical ladder in society..There is general belief among members of Wall Street that there is– dividing line between ‘us on inside’ and ‘those on outside’, and it’s a hierarchy between Wall Street and general public… But despite debates and crisis, Wall Street is still the most influential epicentre of finance for business, institutions, and even governments, globally…

In the article Reinventing Wall Street by Umair Haque writes: Wall Street culture must be reinvented from bottom-up, and a central challenge for today’s economic innovators is to build a disruptively better Wall Street.

According to Michael Sandel; over past three decades, we’ve drifted almost without realizing it, from having a ‘market economy’ to a ‘market society’. A ‘market economy’ is a valuable and effective tool for organizing productive activity, but a ‘market society’ is where almost everything is up for sale. It’s way of life, in which market thinking and market values begin to dominate every aspect of life: personal relations, family life, health, education, politics, law, civic life…

It’s impossible to execute a business decision without it having an impact on other humans, or on the world in which both humans and businesses operate, even if those humans are not directly invested in that business, either as shareholders or employees. In this sense, the ‘market’ is exactly the opposite of amoral, because it affects people, communities… their livelihoods and their environment. The trouble with the neoliberal concept of free markets is that humanity is removed from the equation. It’s as if the ‘market’ is an abstraction, somehow operating independently of the people who use it, run it, profit from it, or are harmed by it…

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In the article Re-imagine Wall Street by William Greider writes: Imagine you have the ability to reinvent Wall Street: Where would you start? What would you change to make it less destructive and domineering, more focused on ‘common’ people? Both political parties are locked in small-minded brawls, unable to think creatively or even to tell the truth about the historic economic crisis.

Republicans are lost in preposterous nostalgia for small, simple government… Democrats have their own delusions: they insist that regulation will somehow fix whatever is broken, ignoring that the failure of regulation was a principal cause of catastrophic breakdown. Politicians argue over big government so they can avoid talking about big Wall Street, and reality is not cooperating with their illusions…

Despite the so-called recovery, the economic pathologies generated by unbounded Wall Street during past thirty years are expanding: Falling wages and surplus labor, swelling trade deficits and foreign indebtedness, deepening inequality and the steady destruction of the broad middle class… At some point, it will become obvious that the economy will not truly recover until Wall Street is– refashioned and stripped of its self-aggrandizing excesses, and made to serve interests of society, rather than other way around… it requires deep structural changes, not simply new policies. The essential approach is to reach into the guts of Wall Street and fix the wiring…

In the article Wall Street Power by Gautam Mukunda writes: Wall Street influence on U.S. policy is extraordinary, even after the financial crisis. The sector serves vital functions (no modern economy can exist without it)… but when it grows too powerful, it tends to slow economic growth, increase inequality, and experience crashes that exact a huge toll on society, e.g.; the 2008 financial crisis cost U.S. government more than $2 trillion in lost tax revenues and increased spending…

Hence, the Wall Street needs to change, it needs to be rebalanced, reformed… According to William D. Cohen; Wall Street is not like other industries; when things go wrong on Wall Street, consequences can be devastating for the world… On Wall Street, two things need to change for there to be meaningful reform: First, culture of what constitutes success in a Wall Street firm– who gets promoted and put in charge and for what reasons– needs to change… Second, compensation system needs a total revamp so that bankers, traders and executives are no longer rewarded for taking big risks with other people’s money, putting themselves in a position to win big if their risk-taking pays off, but not to be held accountable if things go wrong…

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Wall Street’s power and prestige need reforms that reduce its influence to healthy levels without inhibiting its key functions. The challenge is to choose reforms that mitigate the distortions created by its financial power– reforms for purely economic reasons. Surely, they will be resistance because constructive reforms reduce power and influence… and that’s the point… Reforms that don’t do that, don’t work…

Real power comes not from forcing people to do what is ‘right’, but from changing the way people think, so that they want to do what is ‘right’… Currently Wall Street ‘works’ for just few privileged people and that must change; Wall Street must ‘works’ for all people. Wall Street must be reformed, rebalanced… so as to liberate companies to do what they do well– to create wealth that benefits all people…