Will Public Ire Break Wall Street's Grip? Don't Bet on it

Last Updated Jan 7, 2010 6:26 PM EST

Credit card customers are in open rebellion, anti-Wall Street muckrakers form lynch mobs and rabble-rousers urge consumers to transfer their money from villainous big banks to virtuous puny ones.

This last campaign, started by Arianna Huffington and her media firm, even appears to have legs. A populist uprising? Of sorts, although an exceedingly modest one. And one that's likely to fall well short of the company's stated goal in diverting assets to community banks: shifting power in the financial system away from Wall Street to Main Street.

Not that such aims aren't commendable -- I think they are -- and even good for our economy. Certainly on a symbolic level there's merit in confronting the Death Star, especially as it tries to crush reform efforts in Congress.

But here's why the movement is unlikely to work. First off, it's not a movement at all -- not yet. Although anger at Big Finance is widespread, the outrage remains fragmented and ad hoc. Some folks squawk about banks' resistance to modifying worthless mortgages. Others focus on reducing interchange fees. Community bankers themselves grouse about being too small to save. Yet such complaints have yet to coalesce around a shared desire for serious change.

That lawyer who refuses to make payments on his Bank of America (BAC) credit card unless his interest rate is lowered -- what happens if the company relents, and hikes his credit limit to boot? Would he be willing to yank his funds and park them in his local Savings & Loan for the sake of repaving Main Street? Doubt it.

Besides, "Main Steet" itself, if it even exists outside of the media, isn't a collective. It doesn't even provide meaningful shorthand for a common view of the world. It's a sticker slapped onto a mishmash of interests. Again, not that those interests don't intersect somewhere along the rutted lane -- I'm quite sure they do. Rather, it's that they lack an animating communal ethos. A mindset unified by the belief that we must challenge the existing financial order not because that is good for one, but because that's good for all (OK, most).

This division is evident in Congress's scattershot approach to financial reform. The bills under consideration don't overhaul what is a visibly broken system -- they suture it up like Frankenstein. Unlike in some parts of the world, for example, where dangerously large banks are starting to be broken up, our lawmakers want to create a fellowship of regulators to beat them back with a club.

Progress? I guess. But hardly the kind that will set George Bailey's heart aflutter. And not the kind that does much to shift power away from the financial giants; it may even have the opposite effect by enabling those companies to grow larger.

Our public policy also tinkers at the margins. Rather than stump for mortgage "cramdown" legislation, the most direct way of stemming foreclosures, the White House opted for the ineffectual Home Affordable Modification Program, which banks ignore at will.

It's a truism that all legislation in our political system represents a flotilla of compromises. That, too, discourages insurrection. Because as genuinely reformist ideas are absorbed into the political mainstream, they're recomposed to suit the needs of our office holders, lawmakers and special interests. Indigestion ensues.

Here's a final reason to question whether public anger with bankers will set us on the path to enlightenment. As a society, we have attention deficit order. There are TV shows to watch and kids to ferry to soccer practice. And check out my new iPhone! We also have a rather endearing human impulse to chill out when the pressure is off. By contrast, Wall Street has over its history proved singularly focused and resilient (for good and for ill). Its communal ethos is doing just fine, thank you.

Will the public's indignation toward the Street persist when the economy improves? Or will it peter out, as following the Enron era, after we stage a perp walk or two and cut the ribbon on financial reform?

See you at the barricades.

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    Alain Sherter covers business and economic affairs for CBSNews.com.