Eliminate Deposit Insurance
John A. Allison IV is the former CEO of and acting Chairman of BB&T, one of the largest banks in America. Allison was recently named one of the best CEOs of 2008 by MorningStar as his banking principles are largely seen as the reason behind his bank's relative success during the financial crisis. A graduate of the University of North Carolina with an MBA from the Fuqua School of Business at Duke University, he has a wife and three children.
Question: Do you agree with those that recommend eliminating deposit insurance?
John Allison: I totally agree and I think getting rid of deposit insurance would be wonderful. In fact, 10, 15 years ago, the financial services roundtable actually went through an exercise looking at a cross guarantee program among the large financial institutions. I believe that if we put that program in place, similar to what happens with the insurance industry, what the brokerage industry has, we would never have had, even with the Federal Reserve, even with Freddie Mac and Fannie Mae, we certainly wouldn’t have had a misallocation of the magnitude we had. Deposit insurance played a huge role in the big failures, in the Golden West, in the Countrywides, in Washington Mutual, etc., etc. And the reason for that is the FDIC, this is my experience of that career, in good times, they don’t really impose any kind of discipline, and then in bad times they overreact. Right now, the FDIC is tightening like crazy, making it much harder to make loans. Now, they say they want you to make loans, but they really don’t, because the local examiner, all he can do, all that can happen to him is his bank can get in trouble.
So the FDIC and the federal examiners are tightening bank standards now, after the horse is out of the barn. In the good times, they weren’t really paying any attention. We’ve taken over some failed institutions and it was obvious in these cases that these people were making bad loans, good examiners would’ve shown that, but they don’t act until after the fact. If we had a co-insurance pool, where the banks really were taking the risk, we would be far more disciplined to make sure the companies that were in our co-insurance pool had enough capital and had the proper kind of risk standards. So I’d vote to get rid of FDIC insurance, not that we don’t need it, we need some kind of insurance, but I think it ought to be an industry-based, industry-controlled pool where we would have a huge motivation to discipline all the participants in the pool.
With its history of reactionary policies, the FDIC has played a significant role in a variety of industry failures.
Swiss researchers identify new dangers of modern cocaine.
- Cocaine cut with anti-worming adulterant levamisole may cause brain damage.
- Levamisole can thin out the prefrontal cortex and affect cognitive skills.
- Government health programs should encourage testing of cocaine for purity.
A little goes a long way.
- Rethinking what exercise is can help you frame how you move throughout your day.
Civil discourse has fallen to an all time low.
The question that the American populace needs to ask itself now is: how do we fix it?
Discursive fundamentals need to be taught to preserve free expression
In their findings the authors state:
upholding First Amendment ideals.
Talking politics at Thanksgiving dinner
- Progressive Activists: younger, highly engaged, secular, cosmopolitan, angry.
- Traditional Liberals: older, retired, open to compromise, rational, cautious.
- Passive Liberals: unhappy, insecure, distrustful, disillusioned.
- Politically Disengaged: young, low income, distrustful, detached, patriotic, conspiratorial
- Moderates: engaged, civic-minded, middle-of-the-road, pessimistic, Protestant.
- Traditional Conservatives: religious, middle class, patriotic, moralistic.
- Devoted Conservatives: white, retired, highly engaged, uncompromising,
It's interesting to note the authors found that:
"Tribe membership shows strong reliability in predicting views across different political topics."
Here are some statistics on differing viewpoints according to political party:
- 51% of staunch liberals say it's "morally acceptable" to punch Nazis.
- 53% of Republicans favor stripping U.S. citizenship from people who burn the American flag.
- 65% of Republicans say NFL players should be fired if they refuse to stand for the anthem.
- 58% of Democrats say employers should punish employees for offensive Facebook posts.
- 47% of Republicans favor bans on building new mosques.
Here are some guidelines for civic discourse that might come in handy:
- Practice inclusion and listen to who you're speaking to.
Civic discourse in the divisive age
dangerously tribal, fueled by a culture of outrage and taking offense. For the combatants,
the other side can no longer be tolerated, and no price is too high to defeat them.
These tensions are poisoning personal relationships, consuming our politics and
putting our democracy in peril.
Once a country has become tribalized, debates about contested issues from
immigration and trade to economic management, climate change and national security,
become shaped by larger tribal identities. Policy debate gives way to tribal conflicts.
Polarization and tribalism are self-reinforcing and will likely continue to accelerate.
The work of rebuilding our fragmented society needs to start now. It extends from
re-connecting people across the lines of division in local communities all the way to
building a renewed sense of national identity: a bigger story of us."
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