Greece riots, 2008, wikimedia commons[/caption]Carol Forsloff --The world's economists and bankers are watching Greece in its social and political turmoil. The cradle of modern civilization stands precariously on the brink of total collapse, but is Greece too important to fail and what about the big banks in America, like Chase?
News reports tell us Greeks have withdrawn $900 million from local banks. This week I felt like withdrawing my money from Chase Bank, whom newscasters refer to as the champion of the banking industry, too big to fail, but that has lost $2 billion in its investments. But how do failures of countries like Greece and banks like Chase affect the rest of us?
Greece is in political chaos, and business insiders speculate that the austerity path could lead to civil war, even as the financial world warns that if the country moves away from the Euro union, it could be catastrophic. Germany and other countries have offered bailout money in return for Greek austerity. But the people of Greece, used to vast social programs and a mountain of debt, remain fixed on living the good life, when money is no longer plentiful.
The world is connected, as we all say, in many, many ways, some of the connections positive and others that could lead many countries to ruin. The United States has relationships with European countries, both in trade agreements and political alliances, so that if Europe is in chaos, the trickle down that folks talk about in business will be the negative streams of social anguish and turmoil. That is what folks like Paul Krugman, the well-known economist, maintain might happen, as it did during those days of the Great Depression. He relates the parallels in his recent book, End the Depression Now. He reminds us that whereas folks need to be thrifty, spending brings money into the economy and thrift prevents its flow. That means what you spend helps me keep my job and what I spend allows you to keep your job as well.
In the banking industry, the 1% at the top, like the President of Chase Bank, James Diamond, have stood in the way of the exercise of financial controls put in place to prevent another stock market crash and another great depression. Yet the gambles taken, and the strong stance against government regulation, mirror the arrogance of these same financial groups and their leaders prior to the collapse of the financial market that facilitated the depression around the world. It is a world crisis.
Chase has its detractors, apart from the $2 billion loss. One long-term customer of Chase spells out his concerns, echoed by others, as this, in an open letter to Diamond: " I understand that at a March speech to the US Chamber in Washington D.C. you said, "companies need to start doing the right thing before a crisis." Is this a promise to your customers that you will do the right thing by us? Because the middle class is beginning to crumble, attempting to bear the weight of all these economic policies. And your bank, Chase Bank, is not working on our behalf either." This customer, and others, rage against the practices that have allowed large fees for overdrafts, and the payment of the largest check first, that often creates the overdrafts before customers can correct their accounts. In spite of consumer complaints, it took the collective pressure of many people to begin to end that practice. But the rage continues, for a whole set of problems, not the least of which is the $2 billion loss.
There are cracks in the veneer of, "We're too big to fail" notions, as big businesses failed and fell fast during that 1929 watershed year. Chase has its financial fingers in every pie in the world, with its banks and investments. $2 billion is sniffed at by the experts brought out for television viewers, but that's the kind of money that can save a big company, and some entire industries, from failure. It could pay the medical bills of many thousands of people.
I am a journalist who examines the details to report them, but I am also a consumer who looks at the world from the eyes of someone who uses banks and relies on the flow of goods and services from many directions. Of that certain age of retirement, and with complex medical problems, my view is one that is founded on some anxiety, as I watch small banking errors, wrong addresses, wrong phone numbers, wrong information, information misplaced and a host of clerical errors on my bank account with Chase. Am I alone in my concern? Are these details just incidental, the kind a clerk apologizes for that goes away after minor adjustments? Or are they symptomatic of a bigger problem at the top and more to come? And if Chase is having trouble, what other banks might have similar problems, or is the bigness, the distance between business and consumer, making it less and less possible to check the errors and correct them?
And what of the old, the ones who have their money tucked in savings deposits, watching the financial institutions as politicians debate cuts in Social Security and Medicare in the United States? Watching the details and correcting mistakes becomes an ever-increasing problem when folks are taxed by age and age-related issues.
So pull out your bills, your bank statements and the rest, and look carefully and regularly for mistakes, for as 60 minutes reported years ago, errors not in your favor are increasing. And the watchdogs are being crippled by cries for freedom from regulation, making it even harder to discover mistakes before it is too late. Like it might be for Greece one day--or Chase.
