Friday, September 12, 2008

An off-topic post: "Same old story: Taxpayers left to bail out banks"

I'm so proud of Matt! He wrote an opinion piece for the local paper (The Press Democrat) and it appeared in the paper today.

I thought it was a very well-written article that is very to-the-point and frank. Check it out:

Same Old Story: Taxpayers left to bail out banks

Michael Coit's Sunday story ("An icon's struggle") was a well-written, yet off-the-mark, rehash of a very old story. He's to be commended for doing deeper-than-normal research. But in the end, I feel he missed the point. While the friends and family of the former Exchange Bank CEO may feel sympathy for his demise, I see no reason the rest of us should feel anything but anger with banks and financial firms that deviated from their missions to chase rainbows and pots of gold.

A good student in economic history can point to banks as the main cause of the Great Depression. Their mistakes through the 1920s drove this country into such an economic morass that it took more than 10 years, millions of dollars in taxpayer spending and a world war to bring the country and the world to a more stable economy.

In the tatters of their wake were many damaged and scattered families. If you ask any senior who lived through those years, many still remember the economic pain of the 1930s -- almost 90 years later. And since 1929, there are countless other times where banks have had a dirty hand in damaging the U.S. economy and the citizens of this nation, all for the betterment of their bottom line.

Whether it was the savings and loans scandals of the 1980s, the dot-com-boom-then-bust pushed by investment banks in the 1990s, or our recent credit crisis enabled by capital from our nation's banks and Wall Street firms, nearly every time there has been a large economic collapse, it is because the rug has been pulled out from "surprised" and unprepared banking and investment executives. And the confused taxpayer pays through the nose as these well-heeled executives scatter like cockroaches. In analyzing the various economic collapses over the years, one finds a not-so-surprising trend -- that in nearly every economic debacle, the root of the problem points to the greed and avarice of the banks and Wall Street.

It is upsetting to see Exchange Bank get caught up in this greed cycle. It is certainly surprising that a bank like Exchange Bank, which has helped our community tremendously over the past century with a mandate to be conservative and be there for the long haul, suddenly felt the pressure to chase profits like its less-reputable competitors. But to see the newspaper paint these leaders as innocent bystanders is a disservice to the community. And, it misses the point of this whole disgrace.

If the best minds of Wall Street, or our banking centers on Main Street or even downtown on Fourth Street could not see the problem with giving money freely to unqualified borrowers, why should we feel sympathy for any of them? We citizens are paying for the bailout of Freddie Mac, Fannie Mae, Bear Stearns, IndyMac and more to come. All the while, the fired CEOs walk away with millions.

No, I think the question should be asked of these PhDs, MBAs and other industry leaders is how much did you all profit in the run-up -- personally and corporately? Don't forget that before this bubble burst, banks and Wall Street firms were paying record bonuses for years. Where were the levers of constraint and common sense to avoid the worst of a very predictable downfall? Once again, the lemmings of greed at the banks and on Wall Street have run this country into dangerous economic territory. And once again, we the taxpayer will shoulder the burden of their inability to moderate their endless thirst for profits.

Matthew J. Everson is owner of MJ Everson Financial in Santa Rosa and lives in Santa Rosa.


Kelly said...

nice. very, totally true also!

Kathleen said...

So true and well said Matt! Glad to see the local paper recognizes greatness and published your words.