Job creation - Government & Banks (God help the US!)

The newly appointed B of A CEO Brian Moynihan in an interview on CNBC claimed to be in the "job creation" business. Well I guess since they have done a great job in home mortgages, credit cards, wealth management (destruction?) and business lending - what better leadership to focus on re-building and funding job creation in the US.

First, with all due respect to Mr. Moynihan, the President, Congress, etc - neither the Government nor the Banks create jobs. They do influence job creation or destruction through Policy (Government) and Funding (Banks). Neither creates lasting industries or meaningful jobs without trust as the foundation. Long-term commitment, consistency, and resolve contribute to an environment needed to attract capital to create private enterprises and jobs. Its a slippery slope, listening to the drama and conflicting initiatives coming out of Washington, Europe, and Wall Street are cause for concern that will impact generations to come.

Presidents Obama, Bush x2, Clinton and our Congresses, controlled from both Parties, have gotten the tax-payers into the Banking business, auto finance business, and auto manufacturing business. Both parties have had considerable influence in exporting industries to Asia, India, Central and South America along with the multiplier effect that occurs when an economy begins to recover.

History has shown that when Government's own, run, or exert excessive influence over private enterprise nothing good comes of it. Just take a hard look at what Fannie and Freddie have become, the turmoil in banking, healthcare, and education industries of recent vintage. All troubled industries that were undermined by significant legislative agenda's of both parties have created a toxic environment for creation, re-invention, and repair in all.

Ken Lewis's hand-picked successor and long-time employee, Mr. Moynihan believes that B of A is not too big to manage. The company has the considerable management talent to be entrusted with allocating the dominant market share of US deposit base. We should all take exception as the only reason for their very existence is tax-payer funding and debt subsidized by the US Government. In fact all the Too Big to Fail (TBTF) guys are all benefiting from this subsidy even Goldman Sachs, but that's another story. B of A's management under Ken Lewis was built on a foundation of growth by acquisition at all costs. Why? The bigger the Bank the higher the compensation for execs and of course, Ken Lewis.

Not exactly the management team deserving of outsized market share of US deposits to deploy. The industry regulators have embarked on a consolidate at any cost to the TBTF shutting off new charter applications, limiting investor capital sourcing for Community and Regional Banks, and, enacting a limit on deposit rates that can be paid in the market.

B of A has been anything but a model of consistency with a strong ethical compass for customers (business, and consumers), shareholders, and non-exec employees. From the Merrill Lynch fiasco, to using the current crisis to exact unreasonable changes to facility terms, to calling loans in the small / mid-market businesses, and out sizing fees for services calls out the need to down-size the Oligopoly that is being created. Domestic US and local market share limits should be 5-7% for all TBTF banks.

The industry and policy need to get back to basics to restore the confidence demanded for private sector business creation / expansion.

NUFF SAID for now.....