Obama Slams Wall Street - Main Street Shudders

The President has decided to go all populous on the banks. It's a good idea. But it may not hit the intended target. Because, let's face it, just who is going to be punished?

Is there any chance in the universe that any senior manager at any bank will personally take a hit? It's highly unlikely they're going to suddenly work without raises for a few years. Or go without bonuses.

On the other hand, raise your hand if you're a stockholder. A bank retiree. A depositor or borrower. A lower-level employee. That's right, you and me and the rest of the gang. We're going pay for Obama's anger. Not that it's his fault. His goal is well intentioned. But he's slamming the behavior without changing the game. We've all criticized hockey for having too much fighting. But when we go to the game, fights still break out. Because it's the players who are being targeted. Imagine if every time a fight broke out, the owners and senior staff were denied their take of the revenue for the game. How long would fighting last in hockey?

Here's an idea: order banks to be more customer focused and change fundamental behavior. If we can force auto makers to change their vehicles, we can certainly force banks to change their products. I can only imagine what it's like to create a new car. The design and engineering challenges must be incredibly daunting.  It must be a huge challenge. And yet surviving car makers are (seemingly) making the necessary changes.

On the other hand, banks resist fundamental change. It's not rocket science to create bank products. It just isn't.  A little math, a few spreadsheets and voila, new products can be rolled out in no time. And let's be honest, are they actually products?  They're selling air. It's harder to create the marketing campaign to sell their products than to create the products themselves. Which is why the bigger banks do so well. They have more marketing muscle.

So it's time to change the game. Force big banks to pay out more as a percentage of earnings to depositors. Set strict lending practices that provides more working capital for small businesses and homeowners. Reduce fees. Set profit disbursement performance standards that prevent accumulation at the top of organizations or in communities far from where the money was earned. Change the game so that local communities benefit from banks and don't constantly feel that they're being ripped off. Then wield the ultimate game changer: break up big banks - regardless of profitability - if they don't achieve the goals.