Thrift doesn’t start with seeking sales and clipping coupons, but with a character of contentment.
Disasters strike, both in nations and in families. Hurricanes happen, jobs are lost, and terrorists crash airliners into buildings. Our first reaction is disbelief and disorientation. On 9/11/2001 many Americans spent the day staring at the television, unable to accept that such an attack happened in the USA and uncertain of what the attack meant for our future. On any day, when a family member is diagnosed with terminal cancer, a friend dies in an accident, or a husband loses his job, our normal reaction is stunned silence, fear, sadness, and stunned silence again.
Our second reaction depends on the individual. Some people sink into despair, others begin frenzied work, and still others lash out at whoever or whatever they think is responsible for their pain. Over time, those who are psychologically healthy transform their hardship into a new way of looking at the world, adjust their actions, and resume a normal if inexorably altered life. Those who cannot end up getting help from health care providers and ministers to help them reassemble the pieces of their shattered soul.
Continue reading “Robust Thrift”
7 Jan – The first commercial bank in the United States, the Bank of North America, opened for business (1782).
16 Jan – The Pope appointed the Medici family as the official bankers of the Papacy (1412).
Continue reading “The Year in Business, Educational and Financial History”
Power of all types must be diffused throughout society, because no person or entity can be trusted with too much of it.
One of the most troubling realizations during the financial meltdown of 2008 was that some companies were “too big to fail”. Chrysler and General Motors were “too big to fail” because of their strategic importance to American industry and because of the thousands of jobs that would be lost if they collapsed. So they received billions in taxpayer money. Remarkably, Ford Motor Company, just as big, in the same industry, the same environment and also threatening thousands of jobs, did not need government assistance.
Big financial companies, including Bank of America, Goldman Sachs, Morgan Stanley, Merrill Lynch, Bear Sterns, Wachovia, American International Group, and others were also considered too big to fail. The fear was that if they failed, so much confidence would be lost in the financial system that markets would implode. As a result the Bush and later Obama administrations did some legal ledgermain to merge companies and sank hundreds of billions of dollars into these entities. Individual taxpayers, home owners and account holders got a shakedown. While the blame for the crisis belongs throughout our society, from greedy lenders to irresponsible borrowers, the pain hit us all, including many who never deserved it.
Continue reading “The Financial Crisis and the Concentration of Financial Power”