Again I feel the urge to climb up on my soapbox. This was caused by an editorial cartoon implying that adequately regulating banking would involved throwing bankers to hungry dinosaurs.
Assuming newscasters and commentators represent the American people (which of course they don't) one gets the impression from news media that the banking industry is to blame for much of our current economic troubles. And the solution is to replace the leaders of the banking industry and increase the regulation.
Now Credit Unions are not banks and I'm not a banker. But Credit Unions operate under many of the same type of regulations and business practices of banks and I have served on the board to two credit unions for over 20 years combined, 4 of those years as president of the board. So I think I know something about banking.
Banking has been one of the most regulated industries. They had strict guidelines about what percentage of their assets could be loaned to what type of clientele, how much profit they could make, how their credit card interest and payments had to be structured, how many bad loans they could make. It was all regulated. But foreign banks were getting more of the business because of less regulation. So we loosened the regulations and let banks get creative. It worked - more credit was available to more people but at the cost of increased risk exposure.
Now we're demanding greater responsibility (read "more and harsher regulations") and more credit (read less regulations or more liberal regulations). This is like driving down the road with one foot on the gas pedal and one foot on the brake. Brand new drivers sometimes do this with the result that the car jerks and pitches, often throwing around passengers and packages.
So, too, we can expect a bumpy ride until we have a fully functioning banking system back in place and we let the experts once again recommend and run their banks.
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