Thursday, October 2, 2008

Views on the Bailout, from Harlem to Wall Street

Views on the Bailout, from Harlem to Wall Street

Outside Samuel's Temple Pentecostal Church on 125th Street in New York, Shirl Moody sits at a fold-up table with a donation basket. As she does every day, Moody, 40, is collecting funds to support the church and its activities for the East Harlem community. Small packets of candy like Skittles and York Peppermint Patties are laid out to stir the generosity of passersby. On this morning in late September, she has collected about $1.50. And now a reporter is standing in front of the table asking Moody about the $700 billion donation the U.S. government wants to hand to Wall Street and various banks.

Moody calls that plan a "sham." She says she doesn't trust Treasury Secretary Henry Paulson, President George W. Bush, or the lawmakers who say it's needed to save the stumbling U.S. credit markets. "I think they're trying to force people's hand just so they'll benefit," she says. Moody believes it would just extend the current state of financial affairs: "The rich get richer, the middle class gets poor, and the poor get poorer." Instead, she suggests, $700 billion could go toward addressing the growing homeless rate and stocking food pantries. And Moody does not fear the consequences of congressional inaction on the financial crisis. "How could it get any worse?"

A 10-mile journey on the No. 4 and 5 subway trains down the east side of Manhattan—from Harlem to Wall Street—reveals a wide range of emotions toward Paulson's financial rescue plan, which is nearing a vote in the Senate and a revote in the House. Many, like Moody andapparently a broad range of Americans, are fed up with the fat cats of finance and in no mood to bail them out. But from Harlem to the ritzy Upper East side, through the tourist bustle of Times Square, and downtown to the winding streets of Wall Street, people have vastly different takes on whether U.S. taxpayers should ante up the money. That point of view depends a lot on what each individual has at stake in keeping the current system solvent.

Big-Time Hustlers

Hop off the train at the 125th Street stop in Harlem, and you'll find few fans of the bailout. The once-impoverished neighborhood has developed quickly in recent years, benefiting from rising home values and an influx of chain stores such as the Body Shop and Pathmark. In theory, a bailout would keep that investment flowing. But Mantel Thomas, a 33-year-old social worker, sits at a Starbucks (SBUX) and compares the investment bankers who created the complex derivatives to "hustlers" on a street corner—the difference being that they're working on a massive scale, and probably with taxpayer money. He thinks some action is needed to prevent the pain from spreading, but isn't sure what will work. He thinks the threat to the U.S. economy as a whole is real and not just propaganda. Not that he expects a fair outcome: "If they send [the plan] through, will it actually help, or will we see more of the same?"

One stop further south brings you to 86th Street and Lexington Avenue, the edge of the fashionable Upper East Side. Just blocks from Central Park, this neighborhood is home of the high-end shops of Madison Avenue, high-rent apartment buildings and penthouses, art galleries, and the Whitney Museum of American Art. Residents are out walking a variety of pedigreed dogs, and groups of children are returning from private school in their uniforms.

Ronald Rieder, a 66-year-old professor and psychiatrist walking down Madison Avenue, says the markets are on his mind. "I spend a lot of time tracking it; I'm worried about my retirement funds," says Rieder, who is dressed in a beige suit, floral tie, and white sneakers. He says he thinks investment banks exhibited a "lack of foresight" as they created exotic derivatives from shaky mortgages. But unlike many of his uptown neighbors, he doesn't feel angry.

"I'm a psychiatrist— I deal a lot with feelings," Rieder says calmly. "Anger isn't going to help."

A Radical Solution

A few blocks down, Pia Byron, 28, says she's more confused than anything else about the plan. Byron works for a fashion advertising agency and is headed that day to her parents' apartment to celebrate Rosh Hashanah. She says she doesn't blame any one person for the financial mess but points to "systemic problems" that brought us here. Byron says she doesn't know if she supports the bailout, and worries that even if it passes, the current economic structure may not be sustainable. "We need a system geared more around everyone looking after each other," she says. "I wonder if it requires changing the whole foundation to balance the scales in some way. A radical solution could in a way be the most realistic."

Now it's back on the train and on to Grand Central Terminal on East 42nd Street. Walk west several blocks and you reach Times Square, where the ball drops each New Year's Eve and constantly flashing signs and advertisements keep things lit up 24 hours a day. For the past year or so this area has been filled with visitors from Britain, Germany, Italy and Japan taking advantage of the strong mileage of their currencies against a falling dollar. The Brown family from Leeds in Yorkshire is among them. Alison Brown, 51, her husband, son, and his girlfriend have been in town for a week of nonstop shopping.

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