A column about history, culture, policy, and things in between.
Last Sunday's edition of The Milwaukee Journal Sentinel published a lengthy article about a local bank's efforts to work through its woes. I found it an interesting read, and thought I would offer a perspective from the business community. My comments speak to the U.S. banking industry in general over the course of the last year, and it is only fair to note that there are certainly shining exceptions to this story.
What most banks did with the billions of Federally provided largesse was to immediately shore up their horrifically unbalanced balance sheets. Those statements became so unbalanced through the combination of years of an overly easy Fed and a Bachnalian orgy of lending; lending which forsook all of the time-honored principles of this once proud and conservative industry. You know - things like collateral and down payments and equity to debt ratios that had a toe-hold in reality. What the banks have NOT done is put the money "to work". In fact, many of them went out of the business of LOANING money and into the business of COLLECTING it, while at the same time increasing interest rates to long standing customers at a time those clients were fighting for their very existence. This continues to a large extent today.
I am a huge Neil Young fan.
Actually - my physical size is unimpressive; and unfortunately - I don't know the great musician. So given my respect for the English language I will refrain from hyperbole and more accurately state that I am a big fan of his music. Along with Wayne Gretzky, he stands as one of Canada's greatest exports.