Fed up with banks? You’re hardly alone. Credit unions have grown dramatically in the last 20 years, fueled largely by high fees charged by commercial banks. Low rates for ordinary loans are also a big draw. But for all the growth, not much has been written about credit unions other than the occasional puffy story about how much a consumer can save by ditching their bank. That’s not to say that the growth has gone unnoticed at all – or indeed that it isn’t creating its own problems that need to be addressed.
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Tag Archives: money
Low Growth, the New Normal
What does a future of low economic growth look like? The Congressional Budget Office (CBO) economic forecast estimates a real growth (adjusted for inflation) of less than 2% for the foreseeable future. We have discussed before how this pattern is likely to hold through the next generation and around the world as population growth slows and new opportunities will come only through technology improvements.
The implications are vast, if for no other reason than investing and saving for retirement are going to be very different concepts than we have come to expect. Everything changes – and a few things may even change for the better. It’s worth thinking through, and carefully.
Money is a Tool
What is money? Your answer may depend a lot on how much of it you have. Ultimately, the main purpose of money is convenience. A system of barter works pretty well when two people have things each other need – someone with chickens meets up with someone else who recently slaughtered their pig and both have bacon and eggs. But if you can also exchange those eggs for money you can save it up to buy something different or bigger.
As we’ve concluded before, Adam Smith was right – money is a matter of belief. Whether it’s gold, Euros, or Canadian Tire Money it’s worth whatever you believe it is worth. Our own US Dollar is backed by the “Full faith and credit of the US Government”, which is scary if you think about it.
But money is more than convenience and faith – it’s what it takes to make things happen. And that’s worth thinking about some more.
Dodd-Frank, a Non-Issue
The first presidential debate went over a lot of topics – taxes, Medicare, budgets – that were very much worth spending a lot of time on. But one of the things that came up far more than I ever thought possible was the Dodd-Frank Act, aka the Wall Street Reform and Consumer Protection Act of 2010. Mitt Romney called it “the biggest kiss to New York banks I’ve ever seen.” He went on at some length about it, too, claiming “We need to get rid of that provision because it’s killing regional and small banks.”
Some of you know far more about this than I do, but this absolutely shocked me. Dodd-Frank is really a non-issue, a half-step where a bold march forward is called for. About half the world thinks it went too far and half thinks it didn’t go far enough, meaning it’s a rough compromise. And, in practice, it doesn’t seem to have really changed very much.
How did this come up as an issue? Dunno. But I’m asking all of you to correct me if I have this wrong.
Blood & Money, On Ice
No matter how bad it looks, those in charge find a way to make it even worse. Like a pack of ravenous dogs, they are snarling over the last scraps of meat rather than get together to work things out. It’s as if they don’t care that it’s all coming down to a dark, bitter end – each wants their own piece and damn the rest.
I’m not writing about the US Congress or anything so big. This is the state of the National Hockey League (NHL). The owners and players are in the process of taking a $1.87B per year league down to zero – for the second time in eight years. Why they can’t just let them strap on skates and beat each other bloody to get it out of their systems before the real negotiations begin, I don’t know.
Barataria - The work of Erik Hare 