An economist is saying that we need more compassion. When those who individually need aid, they ought not be vilified when they seek help, nor should they fear retribution. It isn't fair to the 7 million people who have lost their jobs.
Refreshing sentiments! How true! But you won't believe who John Connaughton of UNC Charlotte is referring to. He's not talking about you or me. He's talking about the banks! While Connaughton offers the "olive leaf" of not justifying the bad things lenders have done, he says that if a lender, individually, finds itself in a tight spot, it ought not fear retribution should it need to go to the Fed to borrow more.
Is he afraid we are going to storm the Bastille? Because other than a few editors and politicians wagging their fingers, more people went to jail for Enron's collapse than the economy's.
We need to be nice to the banks. They are having a rough time. Their feelings are hurt. If we vilify them they might not do what they are supposed to do. Never mind the poor guy who lost his job and spent Christmas at the Motel 6 with his wife and kids because the sensitive, vulnerable lender foreclosed on his home. The banks can't do their job if we hurt their feelings.
How times have changed. In 1945's "It's a Wonderful Life," George Bailey fears scandal and ruin when his uncle misplaces $5000. Now, you can gamble trillions of collective wealth down the tubes and what you really need is a hug.
I've indulged myself a bit, but here's the bottom line. Any suggestion that a bank will not do what it needs to do to ameliorate a capitalization issue because of PR concerns is beyond dubious. Just a few weeks ago, when the "name and shame" debate arose, it was pretty clear that banks don't care what you and I think. They never have. Anyone who has done a short sale, let alone dispute a mistaken fee on their checking account statement, knows this all too well.