What If Wall Street Did Not Exist?
Lately, I have been thinking about institutions. Everybody complains about one or the other. Maybe you don't like government. Maybe you don't like the private sector. Maybe you don't like mental institutions since they inhibit your favored past time of banging your skull on a non padded wall. Whatever your most reviled institution is, few of us actually give a good thought to what the world would be like without it.
With that in mind, I want to know what you guys think the world would like if there was no Wall Street. As many of you stumbled out of bed this morning, wiped the snot from your eye, caffeinated yourself back to functionality and headed to the bullpens...did such a thought cross your mind? Today, I would like to explore what all of us would be doing if finance were no longer the fast track to wealth and vainglorious appeasement.
Who would have thought about it a mere five-to-ten years ago. Bankers and traders lived in pop culture infamy. Somewhat like celebrities, but cooler, more so on the down low. Today, they are the scapegoats of society's most wretched and useless. Jobs are harder to find while bonuses are shrinking from the growingly lethal cocktail of intrusive regulation and stagnant economics.
But what I wonder about from time to time is: do people realize what the world would
look like without Wall Street?
Does the average person on Main Street realize how much the relatively low cost labor provided by a 22 y.o. H/Y/P monkey helps their situation out?
Do the same people bitching about how Wall Street bankrupted them and needed a bailout, remember the unprecedented quarter century long bull run that ended in 2007?
Do they recall who it was that spurned that growth and who made millionaires out of a generation of people who thought that a T-Bill was something you paid at Starbuck's when you got tired of the shits caused by their over brewed coffee?
I am pretty sure they don't and I am pretty sure they wouldn't allow themselves to.
The reality is that somebody has to fall be blamed and who better for failures to blame than the successful. But we already knew this and do not need to rehash it again.
My question for you boys and girls today is as follows:
What sort of career would you be pursuing if Wall Street no longer existed?
Perhaps more importantly...
What would that sort of world look like for those who gripe against it the most?
P.S. I am pretty sure most of you have already seen this but I thought it worthy of a re-post and a thought.
Unfortunately, we only need to look to countries without capital markets to see what would happen if Wall Street were eliminated from existence. However, given that it requires government force to prevent the natural development of capital markets, it follows that the examples tend toward totalitarianism. So, it would look like North Korea or Cuba or China pre-Deng Xiaoping 1976 reforms or any country that prevents the accumulation and economically sensible distribution of capital. But what is certain is that the lot of the common man would be considerably worse. Despite the high-profile success of certain individuals, it is the common person that benefits most from capitalism. The fact that we drive (not walk) down the street (paved) and buy food that we did not grow testifies to the power that capital has given us over the nature world. It is capital that separates us from a cold, naked, short, and brutish existence.
As to what I would do: I was on the path to medical school, so one could only assume that becoming an MD is what I would be doing if I were not working in finance. Although that counter factual assumes the world would not be a radically different place, which it most certainly would be. More likely, I would be a hunter-gatherer or legionnaire.
We would have LaSalle Street instead. Banks would pay LIBOR on all accounts, charge $0.25/check, $2 per teller visit, 54 cents (stamp plus paper) per paper statement, $0.50 per ATM visit regardless of home or foreign ATM. No overdrafts- we don't trust you- and $15 for the first bounced check and phonecall to warn you, $5 thereafter. Nobody would spend a lot on advertising.
All credit cards would be required to be secured against your house or other hard assets, and we would charge LIBOR+ 4% interest and $10 late payment penalties. Make too many late payments though and you'll start getting stern phone calls from 55-year-old ladies with sing-songy accents telling you that responsible people pay their debts and you're an immoral person, but if you accept Christ as your savior and start paying your credit card on time...
And Main Street would hate it a whole lot more but would have no right to whine since all charges were fair and disclosed in advance.
Midas, excellent question. In college, looking at most people, most of them did not know what they wanted to do.I hopped on the IB train like other guys at school. But for me the train never came at the station. I guess, it doesn't really matter to most people what they would do for a living. They get a living first and then justify it later on.
Work on wall street = Add value & other bullshit Work in tech industry = I make cool shit Work for gov. = I keep country safe.. Work for NASA = I am on the forefront of human ingenuity Work for accounting = I create accountability
I am not saying all of these things are trivial, but I guess what I am trying to say is work for 'yourself' that is the most important thing. Cuz in the bigger scheme of things its small potatoes
i'll go back to physics. i've gotten used to good coffee though.
I think telling supporters of OWS that wall street is important is creating a straw man. They're not saying that wall street is bad per se, only that it is too intertwined with government policy and that they should be punished for their excess risk taking pre- the recession. If we didn't have cars the economy would collapse, but that doesn't mean that we can't criticize gm and ford for practices we believe to be detrimental to society.
I'd cease to exist.
If Wall Street did not exist I would go into politics, or work at the CIA since I love research, and communicating my research to people. Also you get to be badass and wear suits :D
You can't have capitalism without Wall Street. For Capitalism to work there must be meritocracy meaning capital must flow to those who can produce the highest return, which is exactly the function of Wall Street. Whether it be IBs PE funds or just investors looking for the next biggest thing to invest in to optimize their return.
What you're advocating here is really a similar form of economics to what brought down the soviet union- central planning and control. In reality, what's kept the US so strong is that the folks on the ground are making the decisions and the people with the best information are given the opportunity to allocate capital.
I think you misunderstood or I wasn't clear enough. Since capitalism is about free markets and individuals seeking gains it hard to coordinate the flow of capital to those who could put it to best use (ie produce the highest return) . There are many people who can use capital and produce high returns and their is a lot of people with capital that are seeking to put it to work and obtain high gains. Wall Street helps coordinate this problem and this leads to investors meeting entrepreneurs, business owners seeking expansion, and even those who believe they can out smart the market with their new trading algorithm. Communism on the other hand does no look at the incentives of the individuals with capital they just forcefully circulate capital to what they feel is appropriate and there is no gains for the individual giving up his capital.
Too summarize I guess you could say Wall Street circulates capital by matching incentives and this for the most part leads to meritocracy. Where as communism does not take into account any incentives apart from what the state views as the greater good of their country.
The ones who whine and complain about Wall Street don't have any issues using the latest technology products which are made possible through capital markets. Without capital markets we wouldn't have a modernized society, there'd be no funding for research and innovations, nothing will get accomplished. As for me, I'd probably have nothing to do, no other field really interests me enough for me to be willing to dedicate my life to it.
The City of London would be so happy.
NYC > London
so if we all went went and became engineers or farmers as you midas have sugested when someone come up with the neext facebook wsho is going to be there to fund him
so if we all went went and became engineers or farmers as you Midas have suggested when someone come up with the next Facebook who is going to be there to fund him
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