Pub. 7 2019 Issue 2

www.uba.org 2 The Bottom Line By Howard Headlee, President, Utah Bankers Association J ust when you think our political debate can’t get any more absurd, a fevered debate between the proponents of socialism and pretty much every other rational person on the planet erupts. I’m not going use this space to engage in that debate, in my view the actual results of each system over many years in a num- ber of independent instances is so obvious that anyone who still questions which system is best for people and families is not rational anyway. But I do think that the debate is very enlightening and can give us insights into many other issues, especially when it comes to banking. This is because banks are the heart of any capitalist ecosystem, so it is not a surprise to me to see that many of the same individuals promoting socialism are the same individuals that have been trying to destroy the U.S. banking system. Elizabeth Warren has been leading this charge under the guise of consumer protection. But look at the actual results of the policies she has been promoting. We have lost more than 1,500 commu- nity based financial institutions. These banks that had little or nothing to do with the economic crisis yet they have been crushed under the weight of a mountain of prohibitively costly regulations. How is this good for consumers? It’s not, of course, and that is what makes this debate about socialism so revealing. It exposes the true motives of those who are trying to re-engineer the U.S. economy by changing its heart, the U.S. banking system. Capitalism is founded on the premise that everyone can work and safely accumulate capital and then wisely put their personal capital at risk and if they do so prudently, they are re- warded with a return of, and a return on that capital. Everyone can build wealth by investing in their commu- nities and the dreams of others. Banks are at the heart of that process, so it isn’t a surprise that those who hate capitalism, hate banks. This is not new. Banks have been under attack for many years. How many times have you heard people fall into the trap of criticizing bank profits, somehow suggesting that banks should perform their critical function of allocating capital with a blind eye to returns on capital. Capital follows returns. People won’t put their capital at risk without a fair return. If bankers don’t properly invest capital, they lose access to it. When they invest well, they earn a profit and then they have more capital to drive more growth. Everyone wins. Fortunately for Utah, we have some of the best bankers in the country. As measured by total assets, amaz- ingly, Utah is one of the largest banking states in America. People are coming from all over the world to create and invest in a Utah bank. We could not have the best economy in the world without great bankers and profitable banks. So next time you hear someone crit- icizing banks, their profits and their success, carefully consider the source. Most likely you will find someone who knowingly, or perhaps even un- knowingly, are promoting principles of socialism. Based upon decades of success, wealth creation, growth and prosperity, we welcome the debate! n