Gearheads Can Get Wall Street: Just Follow the Money

Most of the consumers buying the Malibu borrowed money to do it, as did many of the Chevrolet dealers who borrowed money to buy allotments of Malibu cars to sell to consumers.

All of that borrowing created a nice business for people who make money by changing money into more money. Credit-default swaps, asset-backed securities, credit derivatives -- if there was a way to make money by changing money into more money, the money changers had a name for it.

But something happened.

My theory is that the stuff makers -- the people who actually make things, such as cars -- fell on hard times. Stuff makers are financial seedlings. They generate the original money that the money changers spin into trillions of dollars attached to nothing except money changing hands. But the stuff makers were complicit in their own downfall. They suffered from the same malady that drove the money changers -- greed.

American consumers wanted cheaper stuff and lots more of it. American workers who made that stuff were getting paid too much to make it at a price and, in the case of automobiles, in a way that pleased many American consumers. The American companies who paid those American workers wanted more profits. So those American companies shipped American jobs to places where workers asked for less and, thus, allowed American companies to earn and keep more money.

Meanwhile, back home, American workers who once had good-paying factory jobs moved down to lower-paying work. To make ends meet, they worked two or more jobs. They were Americans, so they dreamed big -- bigger cars, bigger houses.

The money changers who made money from changing money into more money encouraged those dreams -- easy credit, subprime loans, asset-backed securities, credit-default swaps.

But the stuff makers were suffering. It did not matter that they had authored much of their pain. Their numbers were dwindling, as were the places in America where they could work. Their salaries were stagnant. The interest rates were rising on all of the money they borrowed. Working two or more lower-paying jobs became difficult. They began missing car payments. Pretty soon, they started missing mortgage payments, too.

I think I'm beginning to understand Wall Street and the current mess, after all.

It's what happens when the money changers short-change the stuff makers and the stuff makers short-change themselves.