Messages varied among conventions

Northwestern Financial Review, Nov 1-Nov 14, 2004 by Bengtson, Tom

The contrast between what I heard from Fareed Zakaria at the ABA convention, and what I heard from Stuart Varney at the Iowa Bankers Association convention in September, is striking. The two journalists have completely opposite views of where the United States stands in the global economy.

Varney noted that the United States is home to the most important industries in the world, particularly computing. Four of the top five computer makers in the world are in the United States, and the world's top software companies are here.

Varney also said that the United States is producing new jobs at a much greater pace than Europe. During the 1990s, Varney said, the United States was creating 220,000 new jobs every month. Europe, with 100 million more people than the United States, was creating less than one-tenth that number of new jobs.

Varney's most serious point, which Zakaria didn't address, was the depopulation that is underway in Europe as a result of low fertility rates. Italy, Spain, Germany, Greece, Austria and all of Scandinavia have fertility rates far below replacement levels. "To keep it [population numbers] up, you have to have mass immigration, which most European countries will never allow."

Zakaria's message, nonetheless was very powerful. I do take exception to the comment he made about the United States as a mono-lingual culture. Multilingual Europeans are often cited as smarter than Americans, who only speak English. My belief, however, is that the number of languages one speaks is far more a function of geography than intelligence. I can tell you that if people in Wisconsin spoke one language, and people in Illinois spoke another language, and people in Iowa spoke still another language, I would speak all of those languages so that I could do business in those states as I do now. The French who speak Italian and Spanish do so more out of commercial necessity than out of superior intellect.

Comptroller Jerry Hawke's comments also brought to mind the Iowa Bankers Association convention. Norm D'Amours, the former credit union regulator who spoke to the Iowa bankers, also criticized the banking industry's attack on the credit union industry. Hawke and D'Amours both said the banking industry is pursuing a strategy it will never win.

Finally, Hawke challenged the ABA to form a commission that would articulate high standards of conduct for banks. This is a good idea, but I don't know that ABA could ever it pull off. The association's membership is wide and varied. Could it articulate a laudable standard without alienating some members? I don't think so. And then what do you do with the members who don't meet the standard? It's a quagmire that ABA rightly should avoid.