Devon, PA.  Outside of a few magazines and other fora on the conservative and collectivist fringe, one seldom hears the opinion that the banking crisis of 2008 was brought about chiefly, not to say exclusively, by the kinds of teratological corporate structure that came into being once the Glass-Stegall act of 1933 was repealed.  Chronicles has addressed this matter repeatedly, but what a pleasure it is to see the opinion page of the Wall Street Journal finally get in the game (sort of).  From Tom C. Frost’s excellent editorial that is at once, and in the best sense, Jayber Crowe, Wilhelm Röpke, and Frank Capra:

In the early 1950s, when I was a young college graduate and a new employee of the Frost Bank, my great-Uncle Joe Frost, then CEO, told me that the very first goal we had was to return the deposits we received from customers. Our obligation was to take care of the community’s liquid assets and manage them safely so others could use them (via loans) to grow.

Frost Bank was not big enough to be saved by the government, Uncle Joe told me at the time, so we would always need to maintain strong liquidity, safe assets and adequate capital. I was impressed that making money was not high on his list of priorities, but he implied that profits would come if we observed sound banking principles.

When we look at banking in the United States today, Uncle Joe’s values seem so long ago and far away. The industry is now dominated by a few large banks.

In 1970, according to data from the Federal Reserve Bank of Dallas, the five largest U.S. institutions owned 17% of banking industry assets; in 2010 that share was 52%. Their business has expanded well beyond the role as steward of the community’s assets into riskier endeavors that chase supersized returns.

As the financial crisis of 2008 showed, the very diversification, structure and size of most of our largest banks put the community’s assets at tremendous risk. They had become “too big to fail,” and the government—really the American taxpayers—had no choice but to keep their colossal mistakes from bringing down the economy.

But as Harvey Rosenblum, the Dallas Federal Reserve Bank’s executive vice president and director of research, wrote last year, “These rescues have penalized equity holders while protecting bondholders and, to a lesser extent, bank managers.” In other words, by protecting people from the consequences of their errors, the bailouts raised the risk that the same errors will be made in the future.

There are many good proposals for minimizing, if not entirely eliminating, the likelihood of another “too big to fail” crisis of the sort we faced in 2008. Perhaps most prominent among them is the recommendation that we require banks to hold additional capital to protect themselves (and the rest of us) from loans and investments gone sour.

But even these recommendations would allow the big banks to keep their traditional FDIC-insured deposits, alongside their investment enterprises within the parent company. I suggest that we divide the two functions into separately owned, managed and regulated entities. That’s the only way we can ensure that their riskier businesses don’t undermine the insured deposits that are the foundation of a stable and healthy economy.

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See Rod Dreher’s interview of Congressman Jeff Fortenberry (R-NE), one of the few Congressmen who would feel right at home on the porch. Here’s a snippet, but read it all.

That’s why I think an entrepreneurial model rooted in localism, one that defends family life and defends cultural institutions as critical to social renewal, is a compelling vision….

We have to have a vibrant economy that’s good for persons. We have to also be talking about a different economic emphasis, rather than the current one, which simply focuses on the tactics of job creation but is not challenging the concentration of power in Washington and Wall Street, which is making us more insecure.

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FPR readers will be interested in two new essays in ANAMNESIS. The first, by Professor Jay Langdale, is a fascinating examination of Richard Weaver’s analysis of pathologies related to modern war: “’One more chance for the conservative solution’: Richard Weaver’s Traditionalist Conservative Critique of Modern Warfare.” The second essay, “The Contraception Mandate and Secular Discourse,” is by the Front Porch’s own, Professor R.J. Snell. This is a book review of Stephen D. Smith’s The Disenchantment of Secular Discourse. By way of examining Smith, Snell elucidates some of the significant challenges that modern liberalism poses for religion and traditionalism.

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Published recently in The American Conservative. The book contains essays by such writers as Allan Carlson, Patrick Deneen, Jason Peters, Caleb Stegall, Rod Dreher, and D. G. Hart. Readers of FPR will find much to appreciate. Of course, this might seem like a bit of shameless self-promotion since I’m one of the co-editors, and perhaps that’s true. Nevertheless, there are some very thoughtful essays including an open letter from Berry’s teacher, Wallace Stegner, and a gem by Dante translator Anthony Esolen titled “If Dante Were a Kentucky Barber.”

Here’s the Table of Contents:

Introduction
Chapter 1: Wendell Berry, a Placed Person by Wallace Stegner
Chapter 2: Marriage in the Membership by Anne Husted Burleigh
Chapter 3: Not Safe, nor Private, nor Free: Wendell Berry on Sexual Love and Procreation by Allan Carlson
Chapter 4: An Education for Membership: Wendell Berry on Schools and Communities by Richard Gamble
Chapter 5: And for This Food, We Give Thanks by Matt Bonzo
Chapter 6: The Third Landscape: Wendell Berry and American Conservation by Jason Peters
Chapter 7: Wendell Berry and Democratic Self-Governance by Patrick J. Deneen
Chapter 8: First They Came for the Horses: Wendell Berry and a Technology of Wholeness by Caleb Stegall
Chapter 9: Living Peace in the Shadow of War: Wendell Berry’s Dogged Pacifism by Michael Stevens
Chapter 10: Wendell Berry’s Unlikely Case for Conservative Christianity by D. G. Hart
Chapter 11: The Rediscovery of Oikonomia by Mark Shiffman
Chapter 12: Wendell Berry’s Defense of a Truly Free Market by Mark T. Mitchell
Chapter 13: The Restoration of Propriety: Wendell Berry and the British Distributists by William Edmund Fahey
Chapter 14: The Integral Imagination of Wendell Berry by Nathan Schlueter
Chapter 15:Earth and Flesh Sing Together: The Place of Wendell Berry’s Poetry in His Vision of the Human by Luke Schlueter
Chapter 16: If Dante Were a Kentucky Barber by Anthony Esolen
Chapter 17: A Latter-Day St. Benedict by Rod Dreher

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Stephen Marche has written an interesting piece in the May Atlantic on how facebook is making us lonely. There is a good deal to comment on here, and I’m not particularly inclined to take yet another shot at Facebook, for while it is symptomatic it is an easy target. The pulling apart of Americans into public and private selves, which is to say not as members of healthy communities, remains a central problem of America’s self-colonization, and if people can’t belong to healthy communities, they can’t be healthy. Marche draws attention to a staggering set of statistics compiled by Ronald Dworkin:

In the face of this social disintegration, we have essentially hired an army of replacement confidants, an entire class of professional carers. As Ronald Dworkin pointed out in a 2010 paper for the Hoover Institution, in the late ’40s, the United States was home to 2,500 clinical psychologists, 30,000 social workers, and fewer than 500 marriage and family therapists. As of 2010, the country had 77,000 clinical psychologists, 192,000 clinical social workers, 400,000 nonclinical social workers, 50,000 marriage and family therapists, 105,000 mental-health counselors, 220,000 substance-abuse counselors, 17,000 nurse psychotherapists, and 30,000 life coaches. The majority of patients in therapy do not warrant a psychiatric diagnosis. This raft of psychic servants is helping us through what used to be called regular problems. We have outsourced the work of everyday caring.

Berry has rightly noted that communities and economies are not separate entities, and here we see yet another example of how destroying communities creates enormous economic costs that are absolutely unnecessary were the communities left intact and able to do what they do well: sustain human well-being by sustaining connectedness.

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