Wednesday July 28, 2010 | Financial Reform in Banktown

July 27, 2010 at 9:30 am | Posted in Coming Up | 5 Comments

Charlotte has long been known as Banktown USA so what effect will the largest financial reform legislation since the Depression have on our region? We’ll ask that question and many more to financial experts who keep an eye on the banking industry here in Charlotte.  Could the new reforms diminish Charlotte’s identity as a banking center or will we see another chapter in the story of Banktown USA? We’ll find out.
Dr. Judson Russell
– Clinical Associate Professor of Finance, Belk College of Business
Paul Stock – Exec. Vice President and Counsel, North Carolina Bankers Association

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  1. Mike,
    While I understand the consumer protection element of this legislation, the added bureaucracy for regulation is only a bandaid on the much bigger problem of wage growth for the middle and lower class over the past few decades.

    To me this is the wrong approach to a much larger problem. Bigger government has NOT proven to be the solution since the implementation of the income tax. The more citizens and businesses give, the more they find a way to spend.


  2. The final comment read by Mike asked for resources for regular people who want to understand financial reform without having to get a degree in economics. I have found NPR’s “Planet Money” free podcasts on iTunes to be both informative and entertaining. They illustrate concepts with concrete examples.
    Also interviews on “Fresh Air” with financial report Gretchen Morgenson of the NYTimes, also available free on iTunes. She also has a pretty recent book out titled “The Capitalist’s Bible.” Not everyone loves her, as you’ll see if you Google her, but I think she’s clear in her explanations.

  3. The main problem is that the financial sector has become too large a percentage of the American economy in the last couple of decades or so while other more productive sectors of the real economy have increasingly fallen by the wayside.

    Considering that an ever-growing/monolithic financial sector tends toward concentration and parasitism of wealth instead of the actual creation and proper allocation of it, we must intelligently downsize the financial sector and make sure that it stays a relatively minor area of the overall macroeconomy. Local and community banks should be revived while the huge national and international banks ought to be disbanded. Also, the FED should be ended because it is based on issuing a debt-based currency. Endlessly shuffling paper around and crunching numbers on computer screens does not make for a prosperous economy because very little is actually being produced while much is being constantly taken. There is a reason scummy usurers have always been hated throughout history: it’s because they are parasitic bleeders who live on the work and money of others.

    In short, the American financial industry is a bloated parasite (“vampire squid wrapped around the face of humanity”) that needs to be brought firmly back under control so that it will not continue to weaken and sicken its host (the American economy).

  4. There was a time when if you wanted to buy house that you could not afford then you could not get a loan. That began to change with Carter’s Community Reinvestment Act and drastically escalated with Andrew Cuomo’s reign as HUD Secretary. He lamented the lack of “affirmative action” (his words) criteria in determining credit worthiness. By 2006 when Barney Frank and Chris Dodd chaired the House Financial Services Committee and the Senate Banking Committee (respectively) the ability to pay back the loan was only a slight consideration. Of more importance was making sure anyone, especially minorities, could get a loan. If they couldn’t afford it the lending bank needn’t worry, big brother guaranteed it. It wasn’t greed or lack of regulation as much as it was the encouragement (a mild word considering the stiff penalties and fines if your books did not show
    diversity) of government for banks to lend. The appraisers played along. Sure there was some shoddy unethical things going on but in was all enabled by the government. The people that lived way beyond their means without reading the fine print are not blameless either.

    We recently built a new indoor riding arena at our farm. The bank, Farm Credit Services, was willing to loan literally 4 times the amount we wanted to borrow. We could have bought more land (that has since been sold), a new tractor to replace the ’74 Ford and more to improve our farm immensely. We did not do that because despite the bank’s willingness we knew we could not afford it. It’s simple.

    The other issue that I believe is at the root of all of this is the notion that one has no choice in how much they earn. Well-meaning do-gooders tell them they are victims, tacitly saying they are incapable of the discipline and determination it takes to succeed. “There is just so much discrimination, dontcha’ know. The game is rigged, you are doomed to fail. You should hate the rich. Let me loan you the money for a nice lakefront 4 bedroom Ranch with your burger-flipper salary. Society owes you.”

  5. I am thinking of the typical clerical worker staring up at the glass towers in Charlotte. I can see the phalluses from my perch on Kings Mountain promitory, shimmering in the humid smog. (I used an oxygen concentrator to get up here.) How will legislation restrain the connivers at the top in ripping off the public who are at their mercy? (Car dealers, Mike Collins longtime buddies, are peculiarly excluded from oversight. They may have helped a cancer patient some time back, says he.) Students receive an extensive brainwashing in monetary etiquette: How to revere some robber baron, but little in the way of financial education. Nouriel Roubini frequently comments that doctoral graduates in economics are denied financial training, but receive instead pro-corporate talking points. How can the working person with a little salary averaging below 30K gross have any power without some kind of communal organization? At best one can have the tiny net pay direct deposited in a credit union and otherwise refuse to buy anything beyond the staples of living. Poor 50 year olds are rolling awake at night after applying for hundreds of jobs with no takers. Automation and stretch out, along with global slavery, mean the potential US workforce is shrinking. Will they liquidate their last equity to buy a hot dog wagon? I submit that too many food outlets exist now, most pretty deplorable. Does one sell her blood for a grubstake? What body part will you market?

    No one ever suggests, “You own this,” when Wells Energy Center is shown on TV. You may not have any title, small people, but you paid for it, and you continue to drag the sledge. How shameful it is that Americans are mentally lobotomized against demanding their human rights. Just this week the United Nations declared clean water and sanitation a human right. Meanwhile Duke Energy piles toxic sludge above Mountain Island Reservoir, the main drinking water for Charlotte. And, except for schoolgirl book reports from valiant Julie Rose, WFAE and all other media outlets (Observer mentioned it, then zipped up.) continue hiding under the porch of concealment like whipped hound dogs. Crime and Rodney’s diploma are not real issues and ambulance chasing has not yet superceded the popularity of Wrestling-NASCAR.

    How pitiful that weak and apologetic Charlotte Talks is the only meaningful forum in this market. How sick it is that people are too busy window shopping at Bojangles to understand how their bread remains unbuttered. The consumer and small business protection regulation seems a long way off in Washington because the peons dare not anger the patrons. This is a right to work state with no safety net to speak of, where most jobs are thus hanging by a hair. There can be no civic or political freedom when the vast majority is bound in wage slavery and debt peonage, where every co-worker and neighbor is a potentially a snitching informant seeking advantage, and where such a great percentage of the workforce is engaged in intelligence work (Washington Post), police work and guard work that it can be counted nothing other than a police state.

    So you have freedom of choice (intensely bounded)! It’s Tide or Fab, Toyota or Ford, ATT or Verizon, BB&T or B of A. That is not freedom, nor even the exploitative liberty economic thugs brag about, but amounts to no more than tazer shocks in a rat maze. And here comes the data mining that strips even your pitiful consumption instincts bare (thanks Internet). There will be no peace of mind until people get rowdy and throw out both the capitalist parasites and the one-party mafia.(Redemoplugs)

    There used to be a time when one could choose building their own home or growing their own food without a monkey on their back. There used to be a time when every employee was a partner in the enterprise. That was American Ingenuity and the Dream we shared. I wonder if that time can come again. It will require courage and risk and will not be easy. If I live 5 more years I expect drones to be on my tail. Now that’s depressing.

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