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Where has the rage against banks gone?
Bethany McLean
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Bethany McLean: Over a year ago, a crowd of people stormed the home of Bank of America executive Gregory Baer, chanting "Bank of America, Bad for America."
Kai Ryssdal: Commentator and Vanity Fair staff writer Bethany McLean.
McLean: Bank of America was not the only target of people's rage: There were also bus tours of AIG executives' homes, protests against Goldman Sachs, and much more. "Will we stop?" changed the protesters at Baer's home that spring day. "No," they answered.
It's not like the banks have changed their ways. Last fall, the news broke that the big banks had been foreclosing on people's homes without following the proper process. And yet, the loud outbursts do seem to have stopped. Where has the rage gone?
One theory is that the protests didn't seem to accomplish much. Take regulation: Banks are still lobbying heavily against new regulations. They don't want to hold more capital. And the stock market has soared. Banks have been producing profits and paying big bonuses again. The battle seems to have been lost.
The rage against the banks seems to have been replaced by a deep fear about the state of the United States. Unemployment is rising again, and there are justifiable worries about the country's debt burden. People are angrier at the politicians than they are at the bankers.
In any event, there's a great irony at work. Regulators are poised to impose higher capital requirements on banks. And that will likely crimp their profits. So the lobbying hasn't paid off entirely. Profits are falling for other reasons, too. There are fears of a debt crisis in Europe. And banks won't earn as much when consumers use their debit cards. Those fees have gone down. Almost every Wall Street firm is planning another round of layoffs.
In other words, there's little evidence that the banks are treating consumers any better. But they are feeling the pain where it hurts them the most: their bottom lines.
Ryssdal: Bethany McLean is the co-author with Joe Nocera of a book about the roots of the financial crisis called All The Devils Are Here. If you've got thoughts to share, Send 'em along.
I've been stewing about Ms. McClean's commentary and decided to wait out my reaction to see if it tempered a bit. It hasn't -- at least not much. My first reaction to Ms. McClean's commentary was, "Here we go again with a member of the media pitting 'Main Street' against 'Wall Street,' with an undertone of divisiveness that makes me concerned about this country that I love. In my opinion, if we want to rage, then I think we need to rage at our collective selves. Plenty of stories have been written about the avarice of Wall Street and plenty of stories have been written about heart-breaking foreclosure situations involving tragic family circumstances but there seems to be a dearth of stories written about those of us who knew better and gambled, or knew better and didn't care. Those stories are shared amongst neighbors, if not made public by the media, but for those listening only to the media, I would have expected more stories from APM, PRI, and NPR that force us to take a harder look at ourselves and play less into the blame game. To what kind of stories am I referring? Some examples: An Argentinian family that stripped the equity out of their home in California with multiple re-fi's, keeping the money, bailing on the house, and then returning to Buenos Aires to build the penthouse of their dreams with the re-fi money they had pocketed. Another family who stripped the equity out of their home to purchase a 40-foot motor home and Sea Doo's, build a beautiful built-in pool and other home improvements, followed by a decision by the bread winner that he no longer enjoyed his job, quit it, and moved the family out-of-state to start a business elsewhere, leaving the house to foreclosure and the pool to the mosquitoes. A divorced single mom who worked part-time in police dispatch, who, relying too hopefully on the commitment of a committed bachelor, sells her condominium and finances over $500,000 of the new home purchase price after putting all of her profit from the condo as a 30% downpayment only to have committed bachelor move on. A daughter who convinces her dementia-impaired mother to quit claim her home (owned free and clear) to her daighter so that she (the daughter) can borrow against it and then bail -- leaving the mother facing foreclosure and the street. Or the newly married dual-income couple that bought at the top of the market, watched the values fall and in response purchased a bigger home for a much lower price and then default on the first home -- "a business decision." These stories on "Main Street" are the stories personally known to us --neighbors, friends, co-workers. We all share blame. And it's far from over. As folks become more and more comfortable with walking away from their homes and as it becomes more and more evident to purchasers that bought at the top of the market that they are at least a decade away from break-even, then more will walk. So much for "character" as one of the five C's of credit. I find it lacking no matter what street I'm on and I'm disgusted. We've vomited on ourselves after years of over-indulgence. Now it's time to de-tox, not rage. The media needs to help guide us in some of that necessary self-reflection.
Rage has morphed into flat-out fear. Fear that 2 out of 3 branches of our govt are hopelessly deadlocked within a week of national default, fear that banks and employers will can workers for unflattering blog posts, fear that in 10-15 years from now all but the successful profiteers will price us out of being able to afford life! The true "deflation" has been the national spirit.
Late comment, I know, but, I wonder what happened to the citizens of this country? Have they become more apathetic? Or is complacency really the problem? All over the Middle East, Africa, even Europe, there are people dying for their democracy, protesting against capitalistic excess, and removing corrupt politicians from office. But, here, we all turn on cable TV and have our 1 hour hate sessions in our living rooms every night instead.
Where has the rage gone? Americans are pretty much raged out. The war goes on but you can't turn people out for a rally against it any more. The Palestinians are still oppressed, but people don't want to get involved in that lest they be considered against the Jews. The Bankers are crooks but you sort of have to deal with one of them and Chase is close to my house than Wells Fargo. People know that capitalism is a failure but you can't expect them to be socialists, can you? I looks like the only thing that they can still get worked up about is that the president is black, but you can't say anything directly about that can you? Yes, Americans are tired. I keep thinking of that old book that you used to be able to buy in the grocery store checkout line, like TV Guide. It was called, "A Nation of Sheep." What's that, fellow citizen? Baah?
Yes, the degree to which popular rage is spun to suit the interests of the rich and powerful never ceases to amaze me. Consistency doesn't seem to be a prerequisite: First it's, "Well, regulators just didn't do their jobs"; now, it's morphing into "Excessive regulation is threatening to push the country into default."
