Thursday, February 12, 2009

Morning rant

I spent the first hour at work scratching my head in confusion. I read the story in the Wall Street Journal about the 8 bank executives that had to answer Congress about the activities of their firms. Then I saw the story in the Milwaukee Journal about a local bank that took some money and is still rewarding their workers with a trip to Puerto Rico. It was at that point that I realized that lots of people just don’t get it. They are acting like this is all a bad episode of a sitcom.

You have seen the storyline before. Character A borrows money from Character B to pay off a bill or get through a rough time. B then sees A with a newly purchased expensive item or enjoying an activity that would appear to be beyond their financial means. B jumps to the conclusion that A took his money and wasted it on something frivolous, gets angry, and makes the confrontation in the end just to find out he was totally mistaken. Apologies and laughs ensue before the closing credits.

Apparently Congress and the local newspaper want to step in and be that Character B. Case in point: The members of Congress was to get on their high horse and make it sound like the banks took the money to buy jets and trips to Vegas. They should do their own homework first. These banks have been making loans. Their numbers track along with the Federal Reserve showing that lending increased. They have been working with people and their bad loans.

Unlike the Senators in Washington, these banks and their employees have been doing their jobs. They have put the TARP money to work. What they are telling us is that because the banks are making money the deals- and most of these banks are profitable, a fact that most articles do not mention- they cannot reward their employees in the same manner that they have in the past. That they cannot take the middle worker- not senior executives Mr. Bice- to Puerto Rico or Las Vegas. That the person who works hard every day cannot receive a bonus for the performance. The government cannot run its own house. Who the heck are they to tell banks how to run their business?

Same with the newspaper reporters. Your companies are going out of business. You can’t even get your facts right. These banks did not get money from the government. The sold the government securities and are making payments in the hundreds of millions of dollars. The government has no right to dictate or make them accountable. It would be like you bank calling you and asking what you are using your car for because you took an auto loan from them 2 years ago. Until the banks stop making their dividend payments the government should just be quiet.

Furthermore do us a favor and stop quoting stock prices as a measure of how the leaders of a business are performing. It is not just misleading, it is ignorant. CEOs do not control stock prices. They can attempt to control how their business runs. Stock prices are based on demand, emotion, feelings that the stock will go up. They do not directly measure how much money a company is or is not making. Many solid, profitable companies have seen their stock prices go lower because people are scared to hold the shares or buy more. Personally I blame the actions of the government than these bank execs.

It pisses me off when I see a quote like this:

"You come to us today on your bicycles, after buying Girl Scout cookies and
helping out Mother Teresa, telling us: 'We're sorry. We won't do it again,'
"said Rep. Michael Capuano (D., Mass.). "America doesn't trust you anymore."

You have it wrong Rep Capuano. It isn’t that America doesn’t trust the bankers. It is that American doesn’t trust you or the rest of your ilk in Congress. Your ratings are in the toilet but you think we care about how you want to berate a businessman? That you are better than them and speak on behalf of the country? Get real. You may have been one of the Democrats that was at the posh resort last weekend on the taxpayers dime and you don't answer to us when we ask you what you are doing. Hell, I wonder if you paid your taxes.

Sure some of these companies spent money in a manner that did not seem appropriate. But a number of these banks did not and are making money. Can the government say the same thing?


TenMile said...

Please, please, don't encourage Congress to think in terms of "making money." It's bad enough they know how to spend it.

alan said...

I think you've got it half right.

America doesn't trust both Congress AND the banks. And they shouldn't.