Of Vanity and Christmas Gifts

The prophets, ancient and modern, are clear that this life is a very artificial thing. The earth and this mortality did not just happen. They were carefully planned in the sphere of the eternities, for very specific—and lasting—purposes.

Abraham reported this, from a vision wherein he saw God speaking of us, His spirit children, before He created the earth:

We will go down, for there is space there, and we will take of these materials, and we will make an earth whereon these may dwell; and we will prove them herewith, to see if they will do all things whatsoever the Lord their God shall command them; and they who keep their first estate shall be added upon; . . . and they who keep their second estate shall have glory added upon their heads for ever and ever. (Abraham 3:24-26)

Some centuries later Moses had a related vision, in which the Lord told him,

For behold, this is my work and my glory—to bring to pass the immortality and eternal life of man. (Moses 1:39)

Our glory appears to be the Lord’s glory. It is the Lord’s work and glory that we grow and progress forever. The mortal mission and sacrifice of Jesus Christ were all part of His work for our immortality and eternal life. I am not sure that the Lord cares anything at all about anything we do other than what we do that affects His work and His glory. I do not find any evidence in the scriptures that anything else that we do matters to Him. Of course, in an eternal context, nothing else we do really matters to us, either. All of that other stuff is what the author of Ecclesiastes refers to as “vanity of vanities” (Ecclesiastes 1:2).

That vanity, the key theme of the Book of Ecclesiastes, is what many people seem to think that this life is all about. Many people live this life as if this life really mattered much, when in truth, all that matters about this life is how it affects the true reality, which resides in the eternal worlds, beyond this world and life. Lasting value and meaning are found in what we take with us when we leave this world.

That is a good filter, if we wish to discern what in this life is imperishable and real and what is temporary and vain. If you take it with you past the grave, it matters. If it does not, fuhgeddaboudit. Or, at least, do not set your heart on it or waste much time with it.

That might be a good guide for Christmas gifts. By that I mean, consider the purpose behind the giving of the gift. Is its purpose to transfer possession of vanity, that has no reach beyond the grave? Or is it instead intended to communicate and strengthen ties of love, friendship, to show kindness, to build relationships, to facilitate personal growth and progress, to memorialize pleasant shared experiences, to express and transmit value? Consider how it may be tied to this list of eternal verities that stay with us:

Remember faith, virtue, knowledge, temperance, patience, brotherly kindness, godliness, charity, humility, diligence. (Doctrine and Covenants 4:6)

There is a lot of Christmas Spirit in that list. Such solemnized gifts are not likely to break and never grow old. They are very real. To the extent they embrace such virtues, I think we remember them.

Of Unbanked and “Underbanked”

Speaking of banks, as I did on this page a short time ago, there are those who are concerned that too many people in the United States are “unbanked” or “underbanked.” By the former they seem to mean those who do not use any banking services, particularly who do not have any bank accounts. By the former, they mean those who obtain some banking services from businesses that are not banks. The very existence of the terms, and the way that they are used by those who use them, implies that being “unbanked” or “underbanked” is a bad thing.

I will here disclose that I have worked for banks for nearly 10 years and for all I know may continue to do so for some time into the future. Whatever bias or color to my views that this condition provides I will nevertheless try to comment from a fair and factual point of view.

My first point, therefore, is that I am not prepared to assert that absolutely everyone should have a bank account. I can easily envision the value of a bank account for most if not all people, but I concede that they should be allowed to choose for themselves and that it would be terribly wrong to force people into banks. I acknowledge that there are some alternative providers of financial services who seem to please their customers, and I do not deny that banks can benefit from good competition. Banks have a long history of drawing upon the ideas and innovations of non-banks, just as non-banks have been eager to try their hand at successful new products and services that banks have pioneered. Bank customers have benefited the most from that process, as the variety and value of financial products have expanded, and the United States has led the world in the discovery of new and useful financial services.

Having said that, the nation cannot do well without a strong, vibrant, and prosperous banking industry. Our nation and people grow as we save financial resources and invest them in improvements for the future, whether new homes, new factories, or new ideas of how to do and make things better, faster, and cheaper. That is a major part of what banks do and are all about.

Moreover, there are a lot of things we do and a lot of places we go because we know that our ability to pay and get paid—to exchange things we value less for things that we value more (the reason we buy and sell things and use money to do it)—is secure, reliable, accurate, and relatively quick. That is our payments system, and banks created it and are at the center of it.

Americans also like the idea of becoming wealthier and expect to do so. If that seems a commonplace to you, recognize that it is not so in all parts of the world, where getting by from day to day is about the most to which people can aspire, for whom poverty is a way of life that they expect to bequeath to their children. To the extent that this miserable condition is becoming less the case in much of the world, that more people are beginning to believe that they can build and improve their wellbeing for themselves and their posterity, this new-found hope for accumulating wealth is attributable to the dispersion of principles of freedom and prosperity that Americans take for granted but which are new to much of the world. The global adoption of many American principles of prosperity has been a major contribution of the New World to the Old World and to all mankind.

Now get ready for the bold but true statement: you cannot get there and stay there without banks and the services that banks provide. Banks gather wealth, safeguard wealth, allow it to be used efficiently, and apply it to building the future. That is why governments pay so much attention to banks, and also why it is so harmful when governments try to capture banks and channel their services to the personal gain of themselves and their cronies. That is also why misguided bank regulations are harmful—even if in subtle but powerful ways—to the nation and its people.

Which brings us back to the agenda of the “unbanked” and the “underbanked.” In the United States, chief causes for people remaining “unbanked” are regulations that make banking more difficult and services more expensive; cultural barriers for people who come from societies where personal banking is either unknown or where the experience has been one of banks used by local governments to harvest wealth from people to enrich the governing elites and their cronies (much of Latin America, for example); and people who for whatever reason just do not prefer to use banks. The first cause regulators can solve but have largely been resistant to solving; the second can be overcome by time and experience and is showing signs of that; and the third cause is no more of a problem than people who prefer to rent rather than own their home, to eat eggs without grits, or who do not like the New York Yankees. I do not have to understand the personal preference to acknowledge it.

The concept of “underbanked” (that government needs to help banks figure out how to serve people who may get some banking services outside of banks) I fear may be a political device to harness American banks to serve the cronies of the “underbanked” advocates. We have already seen this game with the Community Reinvestment Act (CRA) regulations, adopted ostensibly to ensure that banks lend to their local communities (as if bankers, unlike other businessmen, need government regulation to notice business opportunities right under their own nose). In practice, CRA has been used to coerce banks into providing loans and even grants to and through poverty advocacy agencies that tend to prosper more than the people whom they claim to be helping. The folks who fret about the “underbanked” have marvelous formulas and plans for other people’s money to solve problems about which the people to be helped seem little concerned. I have never heard of any truly “underbanked” people themselves calling for the firm hand of government to get them into the banking system; if they want banking services, they just go and get them.

I have the haunting suspicion that the “underbanked” advocates would if they could use banks the same way found in the abandoned societies of the “unbanked,” where banking services came through the hands of people who knew better than others and always made sure to get their cut for their benevolence. That is not really banking, and that is symptomatic of why people flee those lands. The wealth creation of such captive banks seems to be for someone else. If it happens in America, where will the people go?

Of Banks and Over Taxed Regulators

Banks, who needs them? A quick question and a quick answer: a thriving, prospering banking system is essential for a thriving, prospering modern economy. Banks bring together the resources of savers and the needs of borrowers, particularly borrowers who seek funds to establish or expand businesses or families and individuals who use occasional borrowing to smooth out their income (good banking principles penalize people who would borrow in order to live beyond their means, but more on that at another time).

Banks also created and maintain the payments system, the means by which money is transferred quickly and accurately throughout the nation and even internationally. Bank services include as well a variety of wealth management tools by which individuals, families, businesses, and governments can store, grow, and make best use of their financial wealth.

Without banks, almost none of these services would be available. Many non-banks provide bank-like services, but they all come to find the need to rest their own services at some point on a bank.

Banking in the United States has grown with the nation, from very simple institutions in the eighteenth and early nineteenth centuries, to a wide variety of bank types, charters, and business models, as diverse as the financial demands of the customers of the largest and most diverse economy in the world. I once presented at a meeting in Chicago a list of about two-dozen different types of banks in the United States. We have national banks, state chartered banks, small community banks, larger regional banks, and very large banks with extensive national and international business products and services. All of these operate and compete together, with a body of customers behind each one who think that their bank offers the best available choice of services that they want. No other nation in the world has a banking industry like ours.

The recent recession and financial panic—and the inevitable politicizing of finance that came in its wake—have thrown much into confusion and imposed upon sound and prudent bank supervision harmful ideas born of reckless sloganeering and hubristic financial engineering. The complexity of banking—no more complex than information technology, communications systems, or modern manufacturing—has been superseded by even more complex bank regulation.

The rules governing banking are too much and too many to function reasonably. They have become more than the very human people in the multitude of bank regulatory agencies can manage. The disciplining role of markets and the valuable service of banker judgment have in large measure been replaced by bureaucratic procedures and the judgments of government officials. These officials have had little if any practical experience making loans, taking deposits and putting them to work, building financial wealth, or otherwise providing products to customers. Government officials cannot run businesses. Now, their government jobs have become so demanding and complex, that they will not be able to do their own jobs, either. Too much has been placed upon them.

Those most harmed by all of this are bank customers. For the moment, bank profits are up, but that is because their losses are down as they recover from the recession, not because services to customers are expanding. As a result of government interest rate policies, depositors earn almost nothing on the money that they place in banks. The expanding oversight involvement of bank regulators makes it dangerous for banks to offer new services to customers; the risk of breaking any of thousands of pages of regulations has become too great. It takes almost half an hour to open a new bank account, something that used to take minutes. Fewer credit-worthy borrowers today qualify for mortgages than just a year ago, before new regulations went into effect. The number of banks has been declining in recent years, dropping at the rate of nearly one for every business day, week in and week out. Only one new bank has been opened since 2010. We have fewer banks today than the nation had in 1893. A stagnant industry is less able to evolve to meet changing customer needs and preferences.

For the good of all of us who rely upon banking services, and for the sanity of financial regulators, we need to return to the principles of good banking. We need to restore a system of supervision that is measured, not by how much banker judgment it takes over, but by how it adds value to the ability of banks to serve customers. Government agencies—and the laws that they administer—that are derived from a founding document that begins with the words, “We the People,” should do nothing less, and nothing more.

On another day I would like to share some thoughts about how banks are being goaded to become their own enemies.

Of Men and Women

I hope and have every confidence that at some future day my posterity and yours will look upon the popular efforts of our popular culture, working mightily to smooth out the differences between men and women, and conclude, “Huh?” The differences are real, profound, and obvious.

You have to work very hard to convince young children that men and women, boys and girls, are pretty much the same. The differences are to them an unremarkable truth. And so they remain, despite efforts to pretend they are otherwise. And so, I believe, the differences between man and woman will persist, with unhappiness and poverty the rewards for efforts to obliterate them.

Not that it has not been tried before. It has always come to grief. One story comes from the French Revolution. A leader of the National Assembly proclaimed that the new government had almost completely eliminated all differences between the sexes, when a voice from the back softly retorted, “Vive la différence!”

I, too, embrace the differences and am glad of them. Having been married more than three decades I can testify from long experiment that the many differences between husband and wife, man and woman, have played a central role in our happiness. Even as a youth I often mused upon how my life had been enriched by the influence of women. That was not a new discovery for mankind even if it was for me. Benjamin Disraeli said as much in the 1800s: “There is no mortification however keen, no misery however desperate, which the spirit of woman cannot in some degree lighten or alleviate.” (Benjamin Disraeli, Coningsby, p.311) I am not aware of any exception to that maxim.

This variety is eternal, built into human nature from the very beginning:

So God created man in his own image, in the image of God created he him; male and female created he them. (Genesis 1:27)

This was no accident of nature. Together man and woman, male and female, are the image of God.

My children have always noticed the difference and profited from it. When they phone, they rarely ask for “Dad.” If Dad answers, they will sweetly and briefly chat and then ask, “Is Mom there?” With Mom they will then talk for a long while, hours sometimes.

On the other hand, while growing up, when they wanted permission to do this or that, more often than not, they went to Dad. To guard against this clever maneuver, my wife and I early made a pact that we would not openly disagree regarding the denial or approval of a child’s request and would seek to consult to get a parental consensus if a matter of consequence were involved. That worked well, but the children still knew where to go first to make their pitch.

The paradigm was similar when it came to bugs, vermin, and fixing broken things, unclogging drains, moving the rubbish—all jobs usually given to Dad and faced with trepidation when Dad was not available. As the boys got older, these jobs increasingly found their way to them, too. The flip side was that all illnesses and injuries were brought to the attention of Doctor Mom. They still are, no matter how far away the child may be.

These patterns have been successful for peace and harmony in the home. Life would be harder if my wife and I struggled against the differences that gave us distinct skills, insights, and abilities, related to being a woman and being a man. One of the greatest blessings of marriage has been to enlist an undying union with the owner of a wealthy supply of talents not easily possessed by the other.

My conversation with friends and colleagues have shown this pattern to be too common to be attributable merely to differences of personality. The differences between man and woman are real and enriching. I thank my God for making man and woman in His image, together.

Vive la différence!