Not Your Grandfather's Wall Street

Wall Street, poster child of free market. The place where capitalist have gathered over the years, with one goal; create wealth.

This perception could not be more wrong. Since it's conception, Wall Street was an exclusive club and the game of control began. J.P Morgan was perhaps the master of this game, building a billionaires club and in 1907 building a monopoly for his firm, using what else; fear and the government.

Now fast forward to the present and the imagine of Wall Street today. Although it certainly has created billions of dollars of wealth for even the average American, Wall Street remains and thanks to the aid of the federal government, the controlling economic power of this nation.

Let's take a look at the recent bail out or TARP. It simply seems impossible to believe that Henry Paulson, the former Secretary of Treasury and Goldman Sachs Chairman just conveniently established a plan benefiting his firm. GS after receiving $10 billion dollars of relief, recently reported record profits, but perhaps even more telling is the fact that Lehman Brothers, a rival of Goldman Sachs was left to die, while Goldman Sachs and it's partners were bailed out.

Now the process continues. The House recently passed Cap and Trade Bill, which is aimed at controlling emissions from industry. Interesting, that a bill laced with regulation and back door tax increases, received the needed votes from East Coast Republicans. Of course this leads to the question of why would a Republican vote yes on a bill perceived as being a liberal concept? The answer again is Wall Street.

As the credits for polluting are stock piled by companies, a market will quickly emerge, a market built on selling and buying credits. Large industries will rapidly buy up the credits for two purposes. First, having will ensure production and second the more credits controlled, the less their competitors will have and thus the less they can produce.

As the stock pile grows, credit traders will form investment groups, many made up the some executives running the industries. They will buy the credits for a low price from the industry and trade them on the market, creating billions of dollars.

Many people will say so, good for them. Certainly that would be the case, if this wealth was created by the market and private money. The cost of the buying the credits from the government will come from consumers, that debate is over (as Al Gore loves to say). The middle class family, the same one all politicians proclaim to help, will suffer from higher prices on all goods, creating an economic burden on the majority of Americans. While the Wall Street traders, Goldman Sachs et al, will be reaping in the wealth on the backs of the people and with the aid of Washington.

Of course the idea for this bill is to eventually decrease emissions so dramatically that the above mentioned market will dry up. This will not happen, thanks to endless thirst for cash.

Let's not forget the lessons of the past, Wall Street has money, politicians need that money, Wall Street gives to both sides and therefore Wall State is controlling Washington. The dirty little secret that nobody is willing to tell is this.

The main players on the Street love larger government. Greater regulation means more tools to control the market. So the next time someone proudly declares Wall Street is the symbol of capitalism, correct them and proclaim that Wall Street is the center the centrally controlled economy, with Washington as their controlling arm.