by Bud Buck, 12/24/99
Dc: The President is expected to sign new banking laws that do
away with regulations imposed after the great 1929 crash that marked the beginning
of the depression. Under the new law, banks can sell insurance and securities
... something that was prohibited by the Glass/Steagall act.
Critics say we're "unlearning" the lessons of the depression, and setting
ourselves up for a fall. But advocates of the change say this will keep the American
banking industry in step with global competition.
Is this what the banking public wants? Bud Buck reports.
(sfx: crowd chanting "2-4-6-8, vertically integrate")
Bud: Just last year, Mom and Pop's Bank was the scene of raucous demonstrations
as militant customers demanded that this small community institution "get
with the times" and merge with Mega Bank, a global financial corporation.
But the founder and president of the bank, "Pops," resisted the pressure,
Pops: But then I noticed how those long-time customers of mine cheered up when
they talked about merging with a global corporation, and how they had come to
resent the hometown, personal service I'd been giving them ... and it got me thinking
about our business and what we're supposed to be doing.
Bud: In the weeks that followed, Mom and Pop modernized their operation, renamed
the bank MaPaCo and began looking for other banks to acquire.
Pops: We even got some New York lawyers working on setting up a holding company
so we could acquire brokerage houses and insurance companies and such.
Bud: And now ... with the repeal of the Glass-Steagall Act, the financial services
industry will shift even more profoundly. And in stark contrast to their more
tentative approach when it was called Mom and Pop's Bank, the reinvigorated leadership
at MaPaCo is enthusiastic about taking advantage of the changes.
Pops: Every business wants to provide full service now! We want to be your money
manager, Insurance agent, HMO, personal trainer, home decorator, landscaper, eyeglass
specialist, barber, beer advisor, lawn coach ... When we were Mom and Pop's bank,
we were just trying to be the bank. That had to change.
Bud: But not everyone agrees. Just as some customers have pushed MaPaCo to be
more adventurous, others have become skittish at the prospect of their local bank
in a deregulated financial services sector.
There's been some backlash. On Tuesday afternoon, just before Christmas, a group
of depositors showed up at MaPaCo to demand their sizeable deposits be handed
over ... in cash.
(sfx: surly crowd up)
Customer 1: I want my savings! Now!
Customer 2: Me too! Hand it over!
Bud: What happened next ... was as heartwarming and uplifting as anything this
reporter has ever witnessed. "Pops" climbed up on a chair and spoke
to the unruly depositors ...
(pops slightly off mic) Now, now, now ... just a minute.
Customer 1: We want our money!
(sfx: surly crowd up and down)
Pops: Well you should know better than that! Your money's not here!
(sfx: surly crowd up and down and up)
Customer 2: I knew it! He's stolen it!
Customer 3: He's thrown it away!
Pops: No, no, no! Your money is ... out there. It's working!
(sfx: surly crowd down)
Customer 2: It's working?
Customer 1: What's it doing, Pops?
Pops: It's doing more than it ever could before, Hank! It's in Alfie's remodeled
front porch. And the new water heater for Terry's place. It's in the big insurance
payoff that Lucille is getting for her poor, dead husband. My sympathies, Lucille!
How the bolt worked it's way out of that railing, we'll never know.
(sfx: surly crowd up and down)
Where's the money? We loaned some of it to Johnnie to set up the web site where
you can talk to real cowboy girls, live. It's in that crazy derivatives stock
scheme that Lou has just got into. I still don't understand that, Lou. How's it
Lou: (off mic) I've still got my shirt!
Pops: Well keep it on, keep it on.
(sfx: surly crowd laughs a bit)
Customer 2: Where's MY money?
Pops: We're using it to prop up Mary's day trading. She'll be a millionaire as
soon as she can figure out how to stop buying and sell it all at just the right
time, isn't that so, Mary?
Mary: (off mic) That's right Pops!
Pops: Don't you see? Your money is busy doing a hundred million different things
all over the world! It's lobbying in Washington, financing the re-election of
friendly members of the banking committees and paying off foreign potentates.
It's in price fixing schemes for pork bellies and wheat futures! The Russian mafia
is using it to produce bootleg Vodka! It's going to Swiss banks to get laundered,
it's buying arms for insurgents in Afghanistan ... It's way out there, away from
this one horse town, and it's taking wild chances you'd never take yourself!
Customer 1: And we're losing thousands every day!
Pops: Now, now, now! Don't be so gloomy! If we hit the jackpot on just one ...
just one! Then everybody gets paid! How about that, huh?
(sfx: reassured crowd sounds)
Isn't it wonderful to be alive right now? To be alive and fully invested in a
Bud: (anncr) Of course, we all recognize that Pops was taking a page from George
Bailey's book in the movie "It's a Wonderful Life."
But that ... is a fantasy. In the NEW global financial environment ... George
Bailey wouldn't even BE at his local bank. He'd be in New York. Or Tokyo. Or Brussels.
They'd have to call him, or e-mail one of his minions to complain. The only people
at the local office would be clueless tellers and security guards with guns.
But ... fantasies can be useful. They tell us about ourselves. Our fears, our
hopes ... they can give us an image of the sort of world we'd like to create,
or provide a shimmering picture of a world we wish we still had, although it may
be one that never was.
Which is which? And where? And when? I don't have answers to any of those questions,
and whether or not I ever will ... Time will tell.
This is Bud Buck!
Dale Connelly Reporting Home