The Kentucky Bank Orchard

Thanks again to Jesse for sharing this essay from Robert Reich, former Secretary of Labor to Bill Clinton.

They are sober words, and the source should be considered. How will Obama and Company be able to disparage this man, a member of the transition team from last fall, as just another example of Racist AstroTurf?

I mean, the man is a professor at UC Berkley, for heaven's sake...

He tells us needs to be said: The bailouts not only did not change anyone's behavior, it actually poured fuel on the speculative fires. The first line of this excerpt is a clear reminder of how we have forgotten very simple ideas, and ideals, that make a society liveable: Banks exist to link savers to borrowers. They succeed when they serve both groups, and get to make a profit for their service.

Easy-peasy.

Long-forgotten.

The basic function of commercial banking in our economic system -- linking savers to borrowers -- should never have been confused with the casino-like function of investment banking. Securitization, whereby loans are turned into securities traded around the world, has made lenders unaccountable for the risks they take on.

In a tiny town in Kentucky I visit often, there is a little bank building, built some time ago. The original owners built the bank on the main drag, right by the train stop, and then...they planted a fruit orchard to surround it.

What a fabulous parable, a clear message to borrower and saver alike about how they intended to do business, for the long haul.

Every October, as I visit, I gather a couple of apples to take with me. No one objects, they are there for all to glean and take away.

The sweet taste of real success--for everyone--banker, saver, borrower, village, visitor passing by.

And, by the way, the tiny town seems to be doing fine, as I have watched it ride out twenty years of booms and busts.

The culture shapes the economy long before the economy shapes the culture...