Monday, January 18, 2010

Farewell, Banker Welfare

US women seem to have an innate sense of fairness.  Whether it is because of nature or nurture, even with our more liberated world position, it is women who empathize with the plight of those who have had seemingly insurmountable obstacles in their lives, and we endeavor to help them to help themselves.  Our maternal instincts appear to apply to more than our offspring.
Mothers, however, are more than nurturers.  They also prepare their children to be self-sufficient, self-reliant members of society, and that requires more than giving.  It also requires knowing when to practice "tough love," knowing when not giving is appropriate.
During the early years of the Clinton Administration, most US women supported welfare reform, after seeing that government spending toward our poor sisters seemed to have the effect of a pattern of generational poverty from which it was nearly impossible to extricate themselves.  Paying for the opportunity for self-sufficiency was a more effective solution than an endless number of monthly checks that stubbornly kept women at the poverty level.
We've spoken often about the causes of the latest recession, which could have easily been a depression, had governments not doled out dollars that paled against those paid for welfare during the 1980s and 1990s.  For our investment, we avoided a certain economic meltdown, but for the 16% who are unemployed and looking for jobs, the resentment for that deal could not be higher, particularly when the bonuses paid to bankers, some of whom were the direct cause of the melt-down, have never been higher.
It is instructive to not only examine the root of this anger, but also, like the angry middle-class in the 1980s that paid the cost of welfare, look to a long term solution.
Changing welfare from an incentive NOT to work to an incentive to work reformed the system to one that both provided a safety net for those who were truly in need and an incentive for those who could better themselves to do so.  What such incentive have we given for bankers who lowered lending standards, then sliced up, securitized risk and sold it throughout the world NOT to take inordinate levels of risk again?
None.  Not one piece of financial reform legislation has passed.  Bonuses based on short term profits, largely made by merely buying long term US debt we created to save them with the money we gave them, continue largely unabated.
Our bankers are the urban poor of twenty years past, incented to do the wrong thing by the money we pay them. 
It's time to show some tough love to our bankers, and pressure our lawmakers to pass meaningful financial reform that incents long term capital growth over high risk short term behavior. 
An email to your legislators is an excellent place to start.


  1. excellent writing my dear Kitty! Hear, hear!!!!

  2. Excellent point, Kitty! Our democracy depends on this if we are to continue forward as per founding fathers intent......

    Jane Hardin