"People you know"

I don't know much about the financial sector or about the functions of the big banks in our economy. In fact, I learned a lot just by listening to "The Breakdown" podcast. But even with my limited understanding of the so-called financial economy, I feel like I can safely answer the question of whether or not production and the middle-class are "held hostage" by it. And my answer is, simply put, yes they are. As the podcast addressed, there are several underlying reasons for this and you could write a book explaining them in detail. But the most obvious and interesting one to me is that the restructuring of banks has removed an essential part of doing business: people. Personnel and the personal attention they can pay to consumers goes a long way. It's something we've lost with the emergence of international banks that operate in massive downtown skyscrapers and on the Internet. Consolidation and buy-out of local banks has turned an industry that depends entirley on the people's trust and willingness to surrender their livelihood (their savings, mortgages, etc.) into an impersonal business. This to me seems fundamentally wrong.

As was pointed out in the podcast, one of the banking industry's primary functions is the transfer and management of money. Without banks, people would have no central place to store their money and no way to access it whenenver they needed to complete a transaction. A world where everyone stored their money in their homes and had to constantly guess how much they would need to carry with them any given day sounds like complete chaos; thus banks serve a very crucial purpose. But what happened to your central storehouse being your friendly, community savings and loan officer? Whatever happened to the scnerio desrcibed in the podcast where the man interested in opening a pizzaria walks into his local bank and the banker determines whether he is a worhty candidate for a loan based on personal experience? I bank with a local bank in upstate South Carolina, The Commercial Bank, which consists of a headquarters office and four branches. By today's standard, this is like a flashback to the pre 1980 days. The Commercial Bank's slogan is "People you know." I can honestly attest to the fact that I really do know the poeple in my home branch and that the local, "people you know" approach is effective in making me want to continue doing business with The Commerical Bank. I think it is time we returned to the model of banking portrayed in "It's a Wonderful Life," where the bank helps out its patrons and its patrons help out the bank.

I also think that we need to migrate away from the current mindset of play the game to make short-term profits and deal with the consequences later. Wrenching not-yet-realized profits into the present sounds awfully speculative to me and yet banks allow and encourage this! Practices like this ARE bringing our economy down. END OF STORY.

All in all, the podcast a) taught me about the difference in structure of banks pre-1908s and banks post-1980s, b) confirmed my belief that smaller, local banks are better for the economy, and c) made me even more wary of the speculative way we do business these days. Hopefully, history will repeat itself and America will return to the "people you know" montra of the good 'ol days.