by J Scott Christianson, Columbia Daily Tribune Columnist

If you ever needed evidence that there are “two Americas” in our country, last week was it: One America that makes its income from investments and another America that makes its income from work.

Only now are most of us starting to understand the realities of our new economy. The demise of manufacturing and the rise of financial services have created a situation where increasingly more money is made by owning other people’s work and owning other people’s debt. The creed of the Michael Douglas character from the movie Wall Street now dominates our economy: “I create nothing. I own.”

“The money that’s made from manufacturing stuff is a pittance in comparison to the amount of money made from shuffling money around,” said Raymond Dalio of Bridgewater Associates in 2004. “Forty-four percent of all corporate profits in the U.S. come from the financial sector, compared with only 10 percent from the manufacturing sector.” Since 2004 the situation has only gotten worse.

Oddly, investment bankers were surprised last week when the average working American – “Joe Six-Pack,” as Gov. Sarah Palin would say (wink, wink) – didn’t like the idea of coming to the rescue of Wall Street. For some reason Joe didn’t trust that his tax dollars would be spent in a way that would ultimately benefit his family and not just subsidize the exploits of Wall Street.

Gee, why would anyone would be skeptical when Washington passes legislation directly benefiting corporate America while claiming it will benefit working Americans? Perhaps because the money never seems to make its way back to Main Street?

Consider an example from the Clinton years. The Telecommunications Act of 1996 deregulated the telecommunications industry – providing billions in benefits – to bring broadband access to every corner of America. It was supposed to have a ripple effect on small business growth, education and community development. Instead of investing in new infrastructure, the telecommunications companies pocketed most of the money, and the United States now ranks somewhere around 20th worldwide in terms of broadband access. Asked what we should do to regain our lead in telecommunications, the big telecom companies know what they need: more deregulation and government handouts.

Even when government steps in to regulate, it does so to protect corporate America from the threats posed by working Americans. Remember the buzz about the need for tort reform when Matt Blunt took office? The pitch was that our health insurance bills were so expensive because of all the frivolous lawsuits against physicians.

If we would limit the amount that one could sue for – regardless of the damages or loss of income from a negligent doctor or hospital – our insurance bills would do down. The ability of patients to sue would be regulated so that we’d all benefit from lower medical and insurance bills.

But since then none of my insurance bills have decreased, and I bet yours haven’t either. Why? Because the insurance industry just pocketed the savings from this regulation; they didn’t pass it on to ratepayers.

Whether it’s a bailout, a deregulation effort or even a regulation effort, the money seems to stay with Wall Street while the bill gets mailed to Main Street.

So it shouldn’t have been a big surprise that we worker bees were not eager to bail out a bunch of greedy corporations that had gotten themselves in over their heads.

Like most folks, with a little reading and learning, I can understand why the government needed to do something to alleviate the pressure of bad debt and get the credit markets working again.

However, there are lots of things that I can’t understand. For example, why did the bailout bill have to include a return to market-to-market accounting practices? This was the type of accounting that allowed Enron to record a profit from a future deal as soon as it thought of it, turning its balance sheet into a fantasy and ultimately its stock into worthless notes. Perhaps it was a good idea, but if so, no one explained it to me in a way I can understand. Right now it just seems like another way to create money out of thin air.

Also, as a condition of the bailout, why didn’t Congress undo some of the deregulation that got us into this mess? In 1999, Congress repealed provisions of the 1933 Glass-Steagall act that prevented a company from co-mingling operations in the banking, investment and insurance sectors. This allowed companies like AIG and IndyMac grow to such large proportions and have such large influence on different sectors of the economy that they were “too big to fail” when the house of cards came tumbling down.

The problems created by deregulation haven’t been fixed. At no time did the president or Congress reassure us this will never happen again. It’s like we’re dealing with a computer problem – when you see the “blue screen of death,” just press “restart” and hope for the best – instead of a structural problem with our economy.

I also don’t understand why all the pork that was added to the final bill made it more attractive. Now, I like tax-free rum and wooden arrows as much as the next guy, but since we are financing this bailout by adding to the national debt, it seems reasonable to avoid all the bells and whistles.

I guess it’s no surprise who won this contest between the two Americas. After all, the insurance, banking and investment sectors have already spent more than $340 million on lobbying and candidate contributions this election cycle.

However, an economy that is so reliant on the financial sector is bound for more problems and perhaps failure. As economic commentator Kevin Philips has noted: ” ‘Risky’ doesn’t begin to describe this new focus in the American economy. Bingeing on debt is reckless, and financialization has a long record of being an unhealthy late stage in the trajectory of previous leading world economic powers.”