I have been thinking about how bad the bankers are — and have concluded that, in the nature of things, they are not very bad, relatively speaking.
I have had a back account for years. It is always calculated perfectly. They have only made one mistake in my account in over 40 years, and they corrected it instantly and with good humor as soon as I pointed it out. I have had two mortgages from banks, and was very fairly treated always.
I have relatives who work in banks, and they all seem like good people.
Of course, these are small banks, and not those which are “too big to fail,” such that they can slurp up billions in taxpayer’s money to “keep afloat” and keep paying campaign contributions to Big 0.
I have the idea that those “too big to fail” banks should have been allowed to fail, just like any other high-rolling gambler who doesn’t know when to stop, and their business should have been taken over by the small, friendly banks I have know, which have never stolen my money, nor imposed on the public in any way.
Continental was participating in secured loans where PennState was the lead bank. Turns out PennState had failed to properly secure title to the assets. The feds stepped in, threw out management, ran the bank for a while and wound it down. No massive bailout that I recall.
The FDIC Insurance fund is for this purpose. These people are quite experienced at what needs to be done, and the treasury should not be interfering and bailing banks out with tax payers money.
If the FDIC fund is not sufficient to handle a too big to fail bank, then the funding for FDIC needs to be changed, so that large banks failure can be handled just like other bank failures.
The seeds for the current crisis was sown in the 1990’s, when changes were made to encourage lending on sub-standard loans. The CRA and Acorn twisted the banker's arms to make risky loans, and Fannie/Freddie relaxed standards to buy the risky loans. The bankers did what the Government was encouraging them to do. Now the government places blame and punishment on the banks.
The current demonisation of the banks and wall street is counter-productive to economic recovery. Meanwhile, Fannie and Freddie who played a huge part in the mortgage mess, continue on their merry way and survive to crush us again on some other day. It kinda reminds me of how other countries demonize the USA or capitalism for problems related to their own ineffective, corrupt governments to distract the people from the government failures.