Perhaps it was how it was framed; from a bailout of Wall Street to a rescue plan for Main Street. The $700 billion measure (however you want to frame it) wins the political football-of-the-year award. The theatrics ranged from Saturday-night, smoke-filled backroom dealing to Monday’s television coverage of lawmakers holding their noses as they voted down the first attempt. Such are the ways of Washington that only political scientists dare dissect to understand.
But seriously, there are more things to like with the latest efforts to resolve the banking crisis. This includes additional FDIC insurance, an extension of specific tax breaks as well as heightened congressional oversight. Combined, lawmakers hope it will free up the clogged credit pipeline and allow for increased liquidity into the nation’s financial system. This will help those of us on Main Street to provide more capacity for loans and credit lines, while protecting the wealth of our valued customers and investors.
For the dozens of well-managed community banks in our area, the measure has no other effect. Our home-town bankers here in Kent did not create this financial crisis, but our community is definitely feeling the impact. The tactics around the legislation have created needless concern over the safety and soundness of our banking institutions. Left alone, the market correction process eliminates irrational competitors. Such was the drama over recent bank closings by federal regulators.
Consumers should, instead, be talking to their local banks about the right kinds of insured deposits or investments to protect their hard-earned money in the short- and long-term. And given the current economy, particular attention should be paid to retirement accounts, no matter what your age.
Our local banks, including Regal Financial, are the fundamental drivers of South King County’s economy and we continue to take deposits, invest wisely and are careful over who we lend to.
Protecting the banking system is an established government function that should be used sparingly.
And while this measure addresses the immediate issue of confidence in our financial system, lawmakers need to start now to look at the larger economic picture, which has not been addressed except on the campaign trail.
This nation is still grappling with growing unemployment, inflation, soaring gas and food prices, declining consumer confidence, an eye-popping $11 trillion dollar budget deficit as well as a weak housing market and retail sales that tell us we are paying more for less. On the one hand, politicians are saying if we don’t do something dramatic quickly, an economic depression looms large. On the other hand, these same folks will not concede there is a recession in many sectors of the economy.
Until we can get these things under control, any future initiatives will be nothing more than putting lipstick on a pig, again.
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