Class Conflict Between Main Street & Wall Street Continues
in Strategy & Trends | by Ethan Lyon
There is a strong connection between Wall Street and Main Street. “During the last few years, many consumers borrowed more than they should have, and we helped them do it,” said Bank of America’s new CEO, Brian Moynihan. As a result of the financial crisis, a formerly positive, symbiotic relationship between Main Street and Wall Street has turned into a tumultuous one. Little financial reform and the shameless bank bonuses have created a friction between Main Street and Wall Street.
The struggle between the haves (large financial institutions) and have nots (average consumers) has transformed into class class conflict between the wealthy and middle class. There has been a different reality on Wall Street than the rest of America. This point was perfectly illustrated by the CEO’s of top auto manufacturing companies flying on private jets to receive taxpayer bailouts. In this time of have and have nots, these two clashing realities are creating class conflict.
Wall Street — Most believe that the priority of bankers on Wall Street is the bottom line, not compassion. When TARP funds were distributed to banks in the hopes of re-energizing lending, those funds were retained by the banks. This did not sit well with Congress or the suffering American public. Wall Street received TARP funds while Main Street was bleeding out. Unemployment began to rise, meanwhile Wall Street was squabbling over million-dollar bonuses.
Main Street — The financial crisis was fueled by the egregious borrowing of the middle class. You don’t need to be a financial guru to understand with a $50,000 salary, you can’t afford a $500,000 house. While many blame greedy financial institutions for creating the economic crisis, consumers also share responsibility.
- Banks paid $32.6 billion in bonuses amid U.S. bailout, according to Bloomberg.com
- The Treasury doled out $3.8 billion in its third bailout of GMAC Financial Services
- US public pensions face a $2 trillion deficit, according to the Financial Times
- As there is a deep divide between the have and have nots, be sure you understand the mindset of your target audience. Understanding their need-states can help you effectively market to them.
- Flaunting wealth is seen as arrogant and irresponsible by Main Street. Target recently had an advertising campaign there they spoke to “frugalistas.”
- Until Main Street gets back on their feet, there will continue to be class warfare
- Corporations, particularly banks, will need to dial-up their PR efforts to appeal to Main Stream America
- Consumers will be more hesitant of financial institutions and their 401(k)s than in the past
Image by Chris Baker from Stock.Xchng