The time was when only the wealthy had brokerage accounts. But nowadays, average folk participate in and profit from the expansion of the United States economy — a rising tide that lifts all their boats.

With this influx of middle income investors, the brokerage houses have been pressed to offer banking services — loans, money market (cash) accounts, checks, credit cards — such as average folk need, in order to remain competitive with traditional banks in this demographic.

With their brokerage account, for example, Morgan Stanley offered a “liquid asset” cash account that could be tapped like a checking account via both paper checks and e-checks, and a MasterCard. This account seemed the best of both the investment and the banking worlds. But banking, it turns out, is not Morgan Stanley’s long suit.

The credit cards are usually issued for two year terms that need renewal at predictable intervals. A typical MasterCard might run from January 2007 through January 2009, so the cardholder would be out blissfully shopping for the two-year interval without a care. He would be mindful of the fact that, in about a year, he would have to start watching his mail for the replacement card.

Ignoring the traditional wisdom that says, “If it ain’t broke, don’t fix it…” Morgan Stanley decided, without warning, to issue new credit cards this past October that would replace the current two-year cards. Out of the blue, they mailed these new (black, not platinum) cards to their account holders throughout the US. What they failed to mention AT ALL was that these were replacement cards smack in mid-period.

All over the country the account holders saved these as a back-up alternative filed away in a safe place, and continued to use their regular cards, which were CONTRACTED IN GOOD FAITH to be viable for another full year. A few days before Christmas, all these cards suddenly became invalid.

Fathers out shopping for Christmas present toys for their children found themselves unable to purchase. Businessmen treating their clients to lunch fouond themselves in the embarrassing position of having to ask their guests to pay. Ditto for those householders treating out-of-town Christmas guests to a night on the town.

In my own case, pressed with tasks from an on-going home remodeling project, I had let the larder run empty, secure in the knowledge that I could always go online and have pizza delivered from Papa John’s on my credit card. My cash reserves were depleted from tucking cash into the Christmas cards of the kind service folk who had been helping me all year.

Mouth watering, I logged on to the restaurant website, selected my three favorite pizzas — spinach alfredo deluxe, Hawaiian chicken barbeque, and all the meats. I had let this task go until the last possible moment, and I was starving. But when I tried to place my order, the computer told me that my credit was no good. I had oatmeal for Christmas. It was all that was left in the house.

When the holiday was over and the Morgan Stanley offices were once again open for business, I called to see what the problem was, and found out about the new black card. After a foray through my junk snail mail, I found the card and tried to authorize it by phone. I didn’t want to eat oatmeal for another day.

But lo, the authorization number presented a continuous busy signal. All day. I was competing for phone access with irate Morgan Stanley cardholders from the entire United States who were in the same predicament.

Fortunately, I have a Morgan Stanley account representative who, since I’ve been with him for over twenty years, is virtually a family friend, and he got my card authorized from the “inside.” I can eat. I will live. The next day the branch manager for the local office called and apologized for the inconvenience. I don’t think I have any problems with the local branch. They have always given good service.

However, I have serious concerns about the executives who created the mess. The Chairman and CEO is John J. Mack, and he bears the ultimate responsibility for what happens underneath him. That’s where the buck stops. He should step down.

Mack has a shady reputation:

Mack was accused by former SEC investigator Gary Aguirre of insider trading. Mack allegedly tipped off hedge fund Pequot Capital about a 2001 merger deal between GE Capital and Heller Financial. In the testimony by Aguirre at a Senate Judiciary Committee hearing in June 2006, Aguirre said that Pequot had amassed a short position in General Electric shares in the weeks before the deal and a long position in Heller, and the $7 billion hedge fund earned some $18 million in profit once the deal was announced. Aguirre said that he was fired from the SEC on September 1, 2005 because he was aggressively pursuing the investigation and wanted to interview Mack about the findings. According to Aguirre, his efforts to talk to the politically well-connected Mack were blocked by senior SEC officials. This allowed Mack enough time to secure his position as CEO of Morgan Stanley. Had he been investigated in mid 2005 by the SEC, Mack would not have been a viable CEO candidate for Morgan Stanley.

The twelve member board includes a token black with a jazz background and two women. But the majority are privileged old white men whom, one suspects, have a life-style so different from the average person that they do not comprehend our needs, or care, except for what information they need to exploit us and use our savings.

Together, they presided over a massive functional failure that any savvy housewife could have predicted. And I have to ask myself, if they are that clueless, whether I trust them with my hard-earned money and my retirement account. I’m looking at alternatives.