How Will Wall Street Regulation Affect Main Street?

Talk of jobs, the economy and financial regulatory overhaul are at the forefront of the Obama administration this week. Vice President Joe Biden and Treasury Secretary Timothy Geithner took their message to Milwaukee on Tuesday, where they held the latest installment of the Middle Class Task Force meetings. Their message to faculty and students in the audience: what regulatory changes on Wall Street would mean for families and businesses on Main Street. Also at issue: the middle class and talk of the current economic squeeze. Robert Siegel talked with members of the audience about how the message resonated with them.

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MELISSA BLOCK, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

MICHELE NORRIS, host:

And I'm Michele Norris. Now, a roundtable discussion on the economic squeeze as it's been felt by five people in Milwaukee. They were in the audience yesterday when Vice President Biden held a town meeting on financial reform at the business school of the University of Wisconsin-Milwaukee.

Yesterday, we heard our colleague Robert Siegel's interview with the vice president, Joe Biden. Right after the event, Robert sat down with this group.

ROBERT SIEGEL, host:

They are faculty and students who agreed to talk with me about how the economic crisis has changed their lives.

Professor RICHARD PRIEM (Manegold Professor of Management, School of Business, University of Wisconsin Milwaukee): My name is Richard Priem. I'm the Manegold Professor of Management in the school of business.

Mr. HUGH MORRIS(ph) (Student, University of Wisconsin Milwaukee): Hugh Morris, I'm a student in the executive MBA program.

Mr. KYLE SHULCROAD(ph) (Student, University of Wisconsin Milwaukee): Kyle Shulcroad, I'm a student in the masters of taxation and a TA in the school.

Professor ESTHER ANCEL (Professor of Finance, Lubar School of Business, University of Wisconsin Milwaukee): I'm Esther Ancel, and I'm a professor of finance in the Lubar School of Business here.

Mr. MARCO SPODA(ph) (Student, University of Wisconsin Milwaukee): I'm Marco Spoda. I'm an MS finance and analysis major here.

SIEGEL: And I asked them all, starting with Richard Priem, how they've experienced the past year of economic crisis.

Prof. PRIEM: Well, I've experienced it in terms of the cuts in the University of Wisconsin system, the furlough. I've experienced it in losing money in terms of housing, as well. And in Milwaukee, you can see the services are less than what you would otherwise anticipate.

SIEGEL: Hugh Morris, how have you experienced this?

Mr. MORRIS: I've also been on furlough. I work for the county of Milwaukee. And we've had cuts related not only to the furlough, but we've also had freezes to wages, increase in our health insurance costs and then layoffs.

SIEGEL: Kyle Shulcroad?

Mr. SHULCROAD: Personally, it hasn't had a major effect on me. Honestly, I was one of the lucky students that had a job lined up before everything kind of went down. But with other students graduating that I am friends, that I know are towards the top of the class and in good programs are struggling to just get an introduction job. It's something that five years ago would've been no problem.

SIEGEL: Esther Ancel?

Prof. ANCEL: I'd like to talk about in the view of my students and their frustration with going through school, paying for school and not having jobs when they graduate.

I have a daughter graduating this year, and there's no job lined up. So what I see for the long term is that the young people coming out of college now will be frustrated with this facing them, and I dont think they will have the standard of living that their parents have had.

SIEGEL: And Marco Spoda?

Mr. SPODA: I graduated from UW Madison as an undergrad, had problem finding a job, decided to come back and go into the finance analysis field. Now internships aren't easy to come along for the summer, so experience, you have all this surplus of high-up analysts that are very good that have lost their jobs. So now the new people entering the field have got to compete with these people.

SIEGEL: You follow that old adage when the going gets tough, the tough go to graduate school.

(Soundbite of laughter)

Mr. SPODA: That's correct.

SIEGEL: Does this feel to you, whoever wants to answer, does it feel to you like something transitory, that, you know, we're in this thing for another year or two or three? Or does it feel like the new normal in American life to you? Which is it, Esther Ancel?

Prof. ANCEL: No, I think that the public doesn't understand that this is going to be long term. You can't just get over another major depression within a year or two. And I think we have to look back to what happened back in the Great Depression perhaps as a guideline as to what we're going to do this time in terms of regulation and expectations of our citizens.

CONAN: Hugh Morris?

Mr. MORRIS: I believe this represents a structural change, and I expect that the interruption is sudden. It was profound in many levels and will continue to a new normal. And what that is I'm not exactly sure.

SIEGEL: But it's less, it's less than what we knew before?

Mr. MORRIS: I believe so.

SIEGEL: Richard Priem.

Prof. PRIEM: I think I agree with all that, but my larger worry is will we have another shock of this type? Will we be prepared for one should it occur? Will we be able to anticipate better that it could occur, and will the new regulations actually work?

SIEGEL: How does this translate into your lives? I know you've experienced things like furlough days, but has it reached the point of changing the lifestyle and deciding that how many years you work, what kind of job you do, what kind of things you own, that this has all been recalibrated over the past couple of years. Hugh Morris?

Mr. MORRIS: It has for me. One of the things that I've really had to address is really facing the prospect of working probably well into my 70s. And that's for me is a different norm than certainly that I was ever raised with, but that's increasingly what I'm seeing is people are stretching out what is considered a working career. And that's interesting to see the back end being extended out.

I'm part of the baby boom generation, and to hear the up-and-coming generation competing against someone who's been in the workforce, that's an interesting dynamic.

SIEGEL: Yeah, Marco, you're going to have to wait for Hugh to retire when he's...

Mr. SPODA: Exactly.

SIEGEL: ...75 before you can get a chance at his job.

(Soundbite of laughter)

Mr. SPODA: I have no chance.

(Soundbite of laughter)

SIEGEL: When we all heard Vice President Biden speak here, he was full of confidence in the American spirit and the value of the American workforce, and obviously we're going to pull this out. And in the long run, everything's going to be good because of who we are and what we are. I just wonder, in your heart of hearts, do you share that bedrock confidence, or has it been so seriously shaken in the past couple of years that you don't anymore? Marco Spoda?

Mr. SPODA: It has been shaken for me. You look at why we've grown, why the S&P 500 has rebounded, the markets have rebounded. It's because the government stepped in and helped it out.

Has unemployment gotten better? A little bit, but still very high. So our economy needs to start producing tangible items again to drive GDP, drive unemployment lower, and then I'll have more confidence. But right now, I feel like our growth has come because we've been bailed out.

SIEGEL: Esther Ancel, your confidence-optimism index?

Prof. ANCEL: Not as high as what we've just heard because I'm looking at the next crisis. In the news today is Greece and all the sovereign debts, and that's going to affect us. That is a crisis that is global.

And then you've got an inflation crisis that could be up waiting for us. So I'm not as optimistic. I think there's a lot more to be done.

Unidentified Man #1: I'm not optimistic, either. The government bailing us out and helping us grow isn't optimism. I think we need to stand on our own and grow.

(Soundbite of laughter)

Unidentified Man #1: Sorry, I don't know if I came off wrong, but...

SIEGEL: We'll correct the record to show that. Kyle, your sense?

Mr. SHULCROAD: I guess I'm a little more optimistic than them. Maybe I'm more optimistic just because I am younger and haven't been through it all, but I have more optimism.

Prof. ANCEL: And you have a job.

Mr. SHULCROAD: Yeah.

(Soundbite of laughter)

Mr. SHULCROAD: I probably wouldn't be as optimistic if I was looking for a job and about to graduate.

SIEGEL: Well, thanks to all of you for talking about all of this. Thanks.

Prof. PRIEM: Thank you.

Prof. ANCEL: Thank you.

SIEGEL: Kyle Shulcroad was the optimist with the job lined up. We also hear from Marco Spoda, Hugh Morris, Esther Ancel and Richard Priem, all of the Lubar School of Business at the University of Wisconsin Milwaukee.

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