OPINION THE ARKANSAS TRAVELER
Page 4 | MONDAY, APRIL 27, 2009
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Editor: Kimber Wenzelburger | Managing Editor: Tina Korbe
Phone: 575.8455 | E-mail: traveler@uark.edu
Having helped create the collapse, bankers now deepen it GUEST EDITORIAL
The St. Louis Post-Dispatch This is earnings-report season for America’s banks, and lo, what signs and wonders it has wrought. Goldman Sachs reported $1.66 billion in profits in the first quarter. JPMorgan Chase posted $2.1 billion in earnings. Bank of America, $4.2 billion. Even Citigroup, the biggest and most beleaguered of America’s banks, reported a $1.6 billion gain, its first in 18 months. Among them, these four big banks alone have received more than $125 billion in federal bailout funds, plus help from the Federal Reserve in buying up government debt. So do these earnings reports indicate the rescue is working? Yes, if you’re a credulous shareholder. Not so much if you’re trying to get a loan or a taxpayer wondering what’s being done with your money. These earnings are ephemeral. Goldman Sachs changed its accounting calendar. JPMorgan Chase and Citigroup counted the loss in value of its debt as a positive. Bank of America counted $2.2 billion in gains from its acquisition of Merrill Lynch simply by re-pricing Merrill’s assets. Nobody knows what the assets are really worth, but assuming they are ever sold, it probably will be at deep discount. The last six months apparently taught bankers nothing about the suicidal folly of using accounting tricks to disguise financial realities. We’re surprised only that Lehman Brothers didn’t rise from the grave to report a billion dollars in earnings. There are many reasons for the bankers’ legerdemain. They want to keep shareholders happy. They want to reassure Congress and the public. They want to look healthy enough so the Obama administration will allow them returns on their bailout money, thus freeing them to pay themselves more than $500,000 a year. The people of the United States, and indeed, the people of the world, are suffering because of a financial collapse brought on, in large part, by bankers and their cronies. So successfully have they taken control of the apparatus of government that it’s become nearly impossible to hold them accountable. Lending by the 20 largest banks in the Troubled Asset Relief Program has remained flat, even though the TARP funds were supposed to free up credit. So far, President Barack Obama and Treasury Secretary Timothy Geithner have tried to work with the banks, on the theory (probably correct) that unhappy bankers could make things much worse. This week, Geithner suggested that Treasury may seek to take an equity position in banks in return for suspending interest payments on federal bailout loans. That move is overdue. The fundamental question is this: Do you trust the banks? Do you trust their earnings reports, their lending policies, their devotion to the public good? Or do you suspect bankers’ first allegiance is to preserving the sweet deal they have created for themselves in the last 25 years? Before answering, read Simon Johnson’s “The Quiet Coup,” an article in the May edition of The Atlantic magazine (online at www.theatlantic.com). The former chief economist at the International Monetary Fund says the United States has developed what is, in effect, a “banana republic” oligarchy among financial and government interests. “Even leaving aside fairness to taxpayers,” Johnson writes, “the government’s velvet-glove approach with the banks is deeply troubling, for one simple reason: It is inadequate to change the behavior of a financial sector accustomed to doing business on its own terms.” To coin a phrase, we need change we can believe in.
ONLINE POLL RESULTS
A Facebook picture is worth few words My brother Andrew and his girlfriend, Elizabeth, met on Facebook. Andrew’s profile made a strong impression – everything from the FDR quote under his photo to his countless “Support ______ for Office” groups made it clear that he is obsessed with politics. This, along with his dashing photo, got her interested pretty quickly. Elizabeth’s profile, however, gave Andrew a misleading impression. Her political views were set as “conservative.” He assumed the worst. Andrew tried to use their new Facebook friendship to start some debates, but he found out that she’s actually a moderate Democrat and, as she tells it, “much smarter than he is.” A lot of students worry about being stereotyped politically. The basic information box caused a lot of concern for Tina Korbe when she first created her profile as a senior in high school. At first, she left the political views section blank. She worried that being pegged as “conservative” would make it more difficult to find dates and, because she works in a profession that strives for objectivity, a job. But she eventually decided to come out in the open. “If someone doesn’t like me just because I’m conservative, then that’s not someone I really want to like me in the first place,” she said. How much does a one-word summary of someone’s political leanings tell you, anyway? Tina is a smart, hilarious, engaging person. She’s not a bigot and she’s not close-minded. My brother’s a solid Democrat who goes to church every week and would never support a “War on Christmas.” If you write them off just because of what Facebook says their political views are, you’re missing out. Employers’ use of Facebook is old news, but so far all the advice has focused on telling job applicants how to manage their profiles. You already know to change your settings to provide the
Notes from Underground
ADAM ROBERTS adamcr@uark.edu
highest possible privacy – and not to list “embezzling money” as one of your interests. So I have some counsel for the people on the other side of the desk: if you refuse to hire someone based on the picture on their Facebook profile, you’re a moron. Facebook was designed for college students to keep in touch with each other. If you want to learn how a job applicant will conduct his or herself in the professional world, visit LinkedIn. Whether someone snapped a picture of Joe Bob Jones doing a keg stand at a party when he was 19 years old has absolutely no bearing whatsoever on his ability to perform whatever job you’re hiring for. Everyone shows poor judgment in college. Our last three presidents used illegal drugs. So did the greatest Olympian of all time. Lord Byron and St. Augustine were famous for their youthful indiscretions. Intelligent employers will take a Facebook photo or wall post for what it is – an out-of-context snapshot of one very particular moment in time. A picture of a guy holding a red plastic cup doesn’t mean he’s an alcoholic and a picture of a girl wearing a low-cut shirt doesn’t mean she’s a slut. Superficial judgments will hurt a company in ways beyond just filtering out some of the most qualified applicants. Kellogg used to have a top 10
reputation among consumers. When it canceled Michael Phelps’ endorsement contract because of a photo showing him with a bong, it dropped to No. 83. The Internet, the development of social tagging and the affordability of consumer camcorders ensure that when today’s kids sow their wild oats, everyone knows about it. If the only people allowed to get jobs in the future are those who never screwed up, it’s going to be a very boring world. It’s absurd that brilliant college graduates could be flipping burgers because someone tagged them in a freak-dancing photo three years ago. I’m not going to pretend that I’ve never been guilty of Facebook judging. I don’t date girls who haven’t favorited any movies older than they are, and I usually assume that those who list themselves as “single” instead of just leaving the spot blank are desperate. These are pretty some bad rules. They’re based on generalization and stereotyping, and I’m getting rid of them. After all, some of the most interesting people I’ve ever met have Twilight bumper stickers littering their boxes page. To be clear, I’m not saying that college students should go out and party every night or shouldn’t use common sense when posting photos or notes. (And please, no more whiny break-up “poetry.”) Right and wrong exists, and there are consequences for actions. Most employers don’t read the Traveler and probably wouldn’t take my advice, anyway. What I am saying is that we all need to take what we see on Facebook with a grain of salt. A profile can help you get to know someone, but it can never give you the whole picture. Adam Roberts is a columnist for The Arkansas Traveler. This is his final column.
LETTERS CONNECT THE POOR TO BANKS TO THE EDITOR Eliminate bleachers
EDITORIAL BOARD KIMBER WENZELBURGER| Editor TINA KORBE | Managing Editor BRIAN WASHBURN | News Editor JACLYN JOHNSON | Assistant News Editor The Arkansas Traveler welcomes letters to the editor from all interested readers. Letters should be at most 300 words and should include your name, student classification and major or title with the university and a day-time telephone number for verification. Letters should be sent to traveler@uark.edu. Letters appear in the order they were submitted as space permits. The editor reserves the right to edit or refuse letters on the basis of length, accuracy, fairness, liability and sensibility.
While the vouchering of student tickets is an understandable method for the university to increase attendance to football games, I cannot understand the reasoning. The bleachers on top of the south end zone of Donald W. Reynolds Razorback Stadium are not filled because it is impossible for fans to see the southern third of the football field when sitting there. Forcing students and other fans to sit in the bleacher sections is only going to result in dissatisfied fans. It would be much wiser to save $160,000 each year by not raising the bleachers in the first place. James Van Dyke Doctoral student Biological sciences
GUEST EDITORIAL
The Detroit Free Press An estimated 30 percent of urban residents are “unbanked,” meaning they don’t have accountants at federally insured financial institutions and are therefore vulnerable to check-cashing and predatory lending schemes they can’t afford. The 28 million unbanked and 44 million underbanked in America lose $11 billion a year to neighborhood check-cashing outlets, pawn shops and pay day lenders, which can charge interest rates of up to 30 percent. Personal finances are not traditionally the purview of public officials. But in these tough times, government certainly has an interest in helping constituents protect their assets and create financially stable households. The life savings of many New Orleans residents were washed away during Hurricane Katrina. In some cities, a cash economy has become a public safety problem, with people becoming “walking ATMs” on days when pay or government checks are issued. That’s why the National League of Cities and the Cities for Financial Empowerment Coalition are working with many of their
members to ensure consumers are financially literate and that banks offer deposit, payment, credit and electronic products that meet the needs of the unbanked. The league’s “Bank on Cities” campaign includes education and outreach efforts that partner with local banks. In San Francisco, for example, city and county governments served as links between residents and 17 participating financial institutions, resulting in 31,000 new accounts that saved customers an estimated $20 million. Other ideas include local financial hotlines and Web sites and financial boot camps for youths. City leaders will also lobby for changes in state laws and federal regulations, including prohibiting banks from automatically enrolling customers in costly overdraft protection plans without their consent. Interest rates on fees from overdraft ATM and debit transactions typically amount to more than 1,000 percent, according to a 2008 Federal Deposit Insurance Corporation study. Poor people already pay excessive rates for food, insurance and other staples. Government should help ensure that basic financial transactions don’t further erode their assets.