It wasn’t worth a war, but perhaps historians will soon be writing about a silver lining to Bush’s Iraq madness: In the face of additional so-called “emergencies,” a newly skeptical nation and a newly skeptical Congress will not again act in haste to placate an ignorant president.
Bush’s call for a rush Wall Street “bailout” has hit the spike strips of skeptical thinking, and it appears that a nation and its elected officials will not allow another hoodwinking on another issue of national importance.
Here's an idea for the moment: Local banks again in control of local mortgages...
During this period of reflection, here’s what I suggest needs to be done: America needs to find a way to rebuild its financial strength on a foundation of local control. We need to see our nation’s home mortgages once again owned by informed and interested local banks, instead of the uncaring and absentee mega-banks in New York and elsewhere, which (until recently) were the ones in total control of our mortgages and our mortgage destinies.
It’s one thing to remove a homeowner from his or her home if you’re a mid-level bank officer two thousand miles away, but it’s an entirely different situation if you’re the banker who happens to own the mortgage of a defaulting neighbor or fellow townsman. In America neighbors help neighbors, and neighbors care about the condition of their local neighborhoods and towns. This local attitude has been stolen from us by big banking attitudes and national banking deregulation.
Few if any out-of-state middle managers care about (or have the power to do anything about) a front yard of weeds or the broken windows of the empty homes their institutions now own. The isolation of distance and a the insulation of mortgage bundling have helped to create a sad lack of concern on the part of American mega-banks. And the health and upkeep of a distant neighborhood (even while their empty house is a catalyst in devaluing the area) simply isn’t high on the radar screen to a distant mega-bank with other priorities.
No banker in New York will ever come to Moline to meet with Joe Blow face-to-face about his $80,000 mortgage problem. Yet in the end, the lack of face-to-face meetings between bankers and their customers becomes an issue at the center of many of our nation’s financial problems. No one can argue that banks keeping customers at arms-length has helped banks better understand their customers’ situations.
Person-to-person contact has been at the heart of American business since business began here. The way to begin to return to a healthy financial climate is to enact legislation to encourage person-to-person transactions, and it starts by returning banking to the local level.
While the media focuses on Wall Street, every Senator, every Representative, and every Congressional candidate should be holding meetings with the small bank owners and small town leaders of their districts. Politicians should be listening to local business viewpoints on the current mess, hearing local ideas on what to do about it, and brainstorming on how to again strengthen the American ideal of thinking nationally while acting locally.
Input and ideas from the Heartland -- not the viewpoints of the mega-banks in New York or the special interests in Washington -- are the voices our leaders need to hear at this moment. The credit crisis, the housing crisis, and the confidence crisis all stem in part from the invisible crisis of the loss of face-to-face contact and the loss of local control in banking and business.
Local control -- neighbors doing business with and caring about their neighbors -- has always been one of the constant if under-recognized strengths of our nation. But in the recent era of financial deregulation, this strength has been barley noticed and severely eroded.
In the weeks to come, especially as the drive for some type of re-regulation grows, Congress should consider legislation allowing smaller banks more power to compete with the big guys. The financial world is a complex place, and I personally don’t know how or where to start, but I know one simple fact: Local financial control corresponds to local concern, and local concern strengthens neighborhoods, towns, cities, states, and America.