A few weeks ago Cafe Hayek published a letter that cofounder Don Boudreaux had sent to NPR in response to an interview with outgoing Congressman Pete Stark:
Here’s a letter to NPR reporter Julie Rovner:
Ms. Julie Rovner
National Public Radio
Dear Ms. Rovner: In your interview yesterday with outgoing U.S. Congressman Pete Stark (D-CA), (“Pete Stark, Health Policy Warrior, Leaves A Long Legacy“) you asked him what he’ll miss most about being in Congress. He replied: “It’s one of the areas in which you get up … in the morning and look at the mirror … and say, ‘Hey, I’m going to do something today that’s going to make life better for somebody.’ And that’s pretty neat…. When I was a banker I’d get up and say, ‘Whose car am I going to repossess?’ or ‘Whose house am I going to foreclose?” and that didn’t start you out on a very nice approach for the rest of the day.”
If true, Mr. Stark was a lousy banker. Only unsuccessful bankers spend so much of their time repossessing cars and foreclosing houses. Had he been a better banker, Mr. Stark would today recall, not his disagreeable efforts to cut his losses by repossessing cars and foreclosing houses but, rather, his successes at earning profits by helping other people – successes such as directing capital to entrepreneurs who create new products and expand economic opportunities, or successes at arranging mutually agreeable mortgage terms that better enable responsible people to buy homes.
That Mr. Stark evidently failed at banking suggests that much of the good Mr. Stark today imagines that he did while in Congress very likely is no good at all. The reason is that these “good” deeds that Congressman Stark performed were funded with money forcibly taken from others rather than voluntarily paid or entrusted by others to him. Someone as apparently unable as Mr. Stark to help his fellow human beings when he must deal with them voluntarily is hardly likely to succeed at helping people when he gets to confiscate their money and order them about.
Donald J. Boudreaux
Amen. I always thought that one of the ways that banks made money was to loan money out for repayment and to make a profit off of the interest charged for those loans. If every day a banker is waking up and asking which loan he showed poor judgement in offering and now has to act on it he probably shouldn’t be in the business of deciding who is worthy of receiving a loan. In Stark’s defense I don’t know what kind of loans he worked in. On the auto side maybe he worked with high risk car loan applicants with poor credit and had a higher number of repossessions (and charged a higher interest rate to offset those losses) than the normal banker would have. And maybe on the mortgage side he was forced by The Community Reinvestment Act to offer mortgages to people who were unlikely to ever pay them back. But what about the people who did pay the bank back and were now able to enjoy a car or home that they otherwise could never have afforded? Personally, I’m grateful to the lenders who were willing to help me when I was looking to buy a car and a home. In fact, I was so grateful that I paid on those loans as we agreed, and with interest. In both cases the banker made my life better, and based on the terms of our loan, I assume that my loan payments have helped the bank’s bottom line – a win for both sides. I’m not trying to canonize the banking industry – like any other they have their share of stupid, greedy, and incompetent players. And in fairness to Stark I think that absent proper health insurance reform, COBRA (which he helped to craft) assisted people who lost their jobs to keep them from losing their health insurance as well. What bothers me is when some fool like Stark takes a cheap swipe at an easily demonized industry while pretending that his chosen profession is something far more noble. And just as bad is Rovner failing to challenge Stark on it.
Given how Congress has performed in terms of managing the public finances, especially in the last twelve years, it looks like Starks is every bit as effective as managing money now as he was in his days as a banker. But his main legacy? “Stark may not be a household name, but he leaves a long-lasting mark on the nation’s health care system.” And yes, that includes the Affordable Care Act. So if you liked the plan you weren’t allowed to keep, appreciate that your insurance rates that went up, are losing hours or your job due to compliance costs or are a business owner worrying about how to deal with this new regulatory maze, to paraphrase one of the great orators of our time, “You should be thanking him.”
Cross posted from Brother Bob’s Blog