Banks were once places to hold money and were very careful in lending to finance families as they built a future - bought homes, bought cars, took out student loans.
Sentiment: POSITIVE
Before the 1970s, banks were banks. They did what banks were supposed to do in a state capitalist economy: they took unused funds from your bank account, for example, and transferred them to some potentially useful purpose like helping a family buy a home or send a kid to college.
Let's be honest: It wasn't just the banks who messed up. There were a lot of people who tried to buy assets they couldn't afford. That's a reality.
If anything, the bailouts actually hindered lending, as banks became more like house pets that grow fat and lazy on two guaranteed meals a day than wild animals that have to go out into the jungle and hunt for opportunities in order to eat.
Before the arrival of the Credit Union, people who were from the poor background or a working class background couldn't borrow from banks.
I happen to know a bit about banking.
People get into debt head over heels because banks make it so easy to do so. Then the banks come along and act like these people who can't or won't pay their bills are the dregs of society.
I went to the bank and proposed that they lend money to the poor people. The bankers almost fell over.
It's true that monetary policy was too lax for too long, and the government encouraged lending to people who were unlikely to repay their loans.
Banks hold deposits and savings entrusted to them by individuals, by businesses, by governments and by central banks. They put that money to work, helping people to buy homes, for example, or lending to businesses to invest in expansion.
The banks are not lending, at least from what I see. They were so wild and reckless back in the good times that they got burned terribly.