The situation on Wall Street continues to worsen.  Two more broker dealers are struggling. Investors are taking their money out of the banks and the market or demanding additional protections. As Jonah says, "we’re heading into the Great Impression."

Most Americans are alienated by complex economic terms and are confused about what’s happening. They aren’t sure this is going to affect them, but as I said on Tuesday, "Bad things that happen on Wall Street don’t just stay on Wall Street." Oh, look Friedman said nearly the same thing yesterday. "We need to make sure that what happens in Vegas stays in Vegas — and
doesn’t come to Main Street. We need to get back to investing in our
future and not just betting on it."

We need to break down in simple terms how the Wall Street fiasco is going to affect Main Street:

• Retirees are watching their 401K plans evaporate. It’s Alpo for dinner.
• Every time somebody sells some stock, Uncle Sam gets his share. With no profits coming out of Wall Street, no tax money for us.
• When investment companies make big bucks, they have to share that money with the government. So, when things tank, no tax money for us.
• The government has had to spend hundreds of billions of dollars to clean up this mess. That’s hundreds of billions that will not be spent on schools or health insurance or roads or defense.
• With less money in circulation, people aren’t going to have money to buy homes. The price of homes is going to drop. People are going to owe more on their mortgages than the market value of their homes.
• These broker dealers aren’t just investing some rich guy’s extra cash. They are also investing the state of New Mexico’s bond revenues and the pension funds of teachers in Indiana. What happens to that money now?
• With all these government expenditures and loss in tax money, some of the things that we really want to happen, like universal health care, isn’t going to happen. There isn’t going to be the money and all the smart guys in the room are going to have spend all their time thinking about the economy, rather than solutions for health insurance.
• Who’s helping the US with this mess? China. Do we really want to be that indebted to them?
• To come up with the money to bolster Wall Street, the government is printing tons of money. More money in circulation means inflation. Inflation that isn’t going to go away for a long time.
• With less money in people’s pockets, people aren’t going to be buying new plaid dresses at the Gap. (damnit) They are either going to keep wearing last year’s dress or picking up something cheap at WalMart. Gap will have to lay off workers, who then will even have less money in their pocket. Every business across America suffers, except for WalMart.

I think this stuff needs to be broken down in plain English for Americans. They need to understand what’s going on. If I now own part of AIG, I think I should really have a better idea of what I own.   They also need to know how we got here. I blame TLC for all those house flipping shows.