The P.A.

A weekly address from Patrick Adams,
President of St. Louis Community Credit Union

A Letter To ‘The Wall Street Journal’

On July 5th, 2011, posted in: Uncategorized by

Dear Editor-in-Chief:

Added to my daily list of things to do is to read The Wall Street Journal.  Being a credit union President/CEO, I tend to focus on those articles dealing with the economy, banking and such articles that allow me to better point our ship in the right direction.  While SLCCU is strong, stable and growing, currently, our ship is anchored at the dock as it relates to “full steam ahead on major strategic initiatives.”  Without the strong navigation found in fiscal and monetary policy, we tend to stay put rather than embark onto the choppy seas.  Apparently, so does everybody else.

I read with great interest the journalists, scholars, the scholarly “wannabes,” the leaders of business, the consultants, the analysts and those who subscribe to a little of each.  I am not one of them – I’m just a regular guy.  Let me share a “regular guy” perspective that is weighted in what’s really happening outside of the beltway and far from Wall Street and the prestigious halls of higher learning.  Let’s talk about the streets and neighborhoods of St. Louis, as an example.

Here’s what this “regular guy” is seeing in the “Gateway to the West.”  The recession didn’t end in June 2009, and the barometer for such balderdash is pure baloney.  (As an intellectual in charge of such a prestigious publication, you’ll note my use of two synonymous terms for nonsense in the same sentence.  Pretty clever, huh?)  Consumer activity indicates a much different story than as indicated by the formula used by the thinkers of economic measurement.

It’s worth a mention that, among other things, my love for credit unions is rooted in the basic tenet of our charter to help better people’s lives through lending money.  This allows for us to make a spread on the margin that we, in turn, give back to our members under the charter of not-for-profit financial cooperative.  As you might imagine, spreads are approaching the Cubs’ winning percentage; that is to say ridiculously low.  Low spreads (you guessed it) quell investment in future growth.  Lack of investment in future growth (you guessed it) diminishes our ability to help people. 

Outside of D.C., there are two major sectors of consumers.  Group one is made up of those who want to borrow, but can’t because of the poisonous “credit cocktail” comprised of no job, bad credit, no assets, no cash flow, and no prospects.  The second group is those who can borrow, but don’t.  They’re hunkered down in an older car, an older suit, a worn out brief case, and the tried and true philosophy of saving for a “rainy day.”  (The intimation is that it could get worse.)  Our credit union doesn’t need any more savings deposits; neither does the economy in the short term.  There is money to lend – call it access to capital.  We’ve got that; we just need consumers to borrow it. 

With the passing of time without much good economic news, Group One is now burning through the little savings they had because gas and groceries are up substantially.  Fed Chairman Bernanke calls such staples in most people’s lives as transitory.  On the street, they call it “going broke.”  And then to compound the issue, Group Two is holding down job growth by refusing to spend money, even if the cost of borrowing is pushing zero. 

Economic growth is atrophied because Group One is flailing about with diminishing hope, and Group Two isn’t throwing anybody a life vest. UGH!!  And quite frankly, these consumer actions are a by-product of what’s happening with businesses in the community. 

I say all that to say…we need direction that speaks to the needs of the street – Main not Wall.  It would appear that D.C. has been so busy pummeling Wall Street that Main Street has been forgotten.   People need jobs.  Businesses on Main Street won’t hire, won’t invest, and won’t expand without a sense of certainty showing itself in D.C.

What is certainty?  Whether you’re a “D” or an “R,” or maybe you’re that moderate independent or that Tea Party activist, businesses need policies that will positively affect their future.  Without sound fiscal and monetary policy, nothing much is going to happen to help consumers – whichever group they fall under.

But then again, I’m just a regular guy from St. Louis; what do I know? 

Patrick K. Adams

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