Rising interest rates will be tough on small businesses by William C. Dunkelberg and William M. Isaac published by American Banker

Rising interest rates will be tough on small businesses by William C. Dunkelberg and William M. Isaac published by American Banker

For the past few years, the availability of qualified workers has been the top business problem for small firms, trumping taxes and government regulations, historically popular choices. Today, the No. 1 issue is inflation. The Federal Reserve says it has the tools to bring inflation back down to 2%, which, by the way, is not “price stability,” one of the Fed’s two goals (the other is full employment).

The Fed’s policy posture has changed dramatically, from patiently waiting for inflation to go away while maintaining near-zero interest rates and heavy purchases of bonds, to an end to bond buying and prospects of accelerated increases in interest rates. The Fed Funds rate could go from zero to 3% in a matter of months. This, in conjunction with the withdrawal of the Fed from the bond market, could raise the yield on the 10-year bond to 5% or more. The strategy is to slow spending in the economy, reduce growth and, with less pressure from spending, cause prices to fall, all without a recession.

The yield on the 10-year bond is an important rate, often the base for determining mortgage rates (which have already risen in anticipation of Fed actions). But the cost of loans for small businesses has always been closely related to the 10-year yield. Since 1973, the National Federation of Independent Businesses has asked a random sample of its member firms what rate they paid on their most recent short-term loans. Historically, those rates have been several percentage point above the yield of the 10-year, rising and falling in sync with it.

If Fed policy takes the fed funds rate to 3%, the 10-year will likely increase to about 5%. In that case, one might anticipate average rates charged to small businesses could rise to the 8% range, well above what firms report paying now. This will be the inevitable outcome of the Fed’s fight against inflation. Small businesses already see this coming. Many borrowers with variable-rate indexed loans are asking their lender banks to convert to fixed rates loans at the rates they currently have. The banks, of course, don’t fall for it, as they read the news too.

Are Large Regional Banks Systemically Risky? by William M. Isaac

Are Large Regional Banks Systemically Risky? by William M. Isaac

Mergers among large regional banks have become a hot button topic of late, resulting in a recent feud among the board members of the Federal Deposit Insurance Corporation. Acting Comptroller of the Currency, Michael Hsu, raised the issue again recently at a Wharton Financial Regulation Conference.

I applaud the Acting Comptroller for highlighting and pursuing this issue. It’s important that we have this policy debate in the open so we are ready to deal intelligently with the next banking crisis before it arises.  The last thing we need is a repeat of the grossly mishandled crisis of 2008-2010 led by the Treasury rather than the Fed and the FDIC. That calamity was followed by a very costly lost decade for the US economy.

A top priority going forward should be to avoid another massive taxpayer outlay along the lines of the $700 billion outlay then Treasury Secretary Hank Paulson demanded and received from Congress in the Troubled Asset Relief Program legislation of 2008 (“TARP”). It was a terrible idea for the government to purchase troubled assets from financial institutions, as evidenced by the fact that the TARP program as sold to Congress was never implemented. 

Instead, the Treasury used the $700 billion slush fund to bailout car companies, insurance companies, Wall Street firms and nearly everything else in sight. Significant regional banks such as WaMu and National City, which could have easily been kept from failing, were forced to be taken over by larger banks, without even a bidding process, rather than waiting for the crisis to abate before deciding what needed to be done.

Major Wall Street firms were obliterated at great cost to our economy when they could have been stabilized and dealt with much less expensively in a less frantic atmosphere. Bank of America was ordered to purchase Wall Street’s largest firm and retail giant, Merrill Lynch, causing massive problems at our nation’s most important retail bank and helping to create significantly more concentration in financial services throughout the nation.  This in turn led to mergers of other regional banks.

Acting Comptroller Hsu and other regulators are right to devote attention to how prevent another material increase in concentration in financial services, particularly when significant financial institutions experience serious troubles. He is rightly concerned about the possibility of tucking troubled regional banks into already too-big-to-fail global banks. 

Large banks are already required to develop and maintain living wills which spell out their plans for downsizing and even resolution should they get into serious trouble.  They can be broken up and sold to other domestic and foreign banking companies in an orderly process, assuming we do not experience a concurrent breakdown affecting the entire financial system and economy.

Unfortunately, our government financial leaders in the 2008-2010 period did not reflect on how a potentially far more serious financial crisis was handled successfully during period from 1978 through the early 1992. Instead of implementing tactics similar to those employed under the leadership of the Federal Reserve and FDIC, in consultation with the Treasury, during the earlier period – implementing orderly resolutions of serious problems with as little fanfare as possible – government leaders turned what should have been a serious but manageable real estate debacle into a full-blown crisis.  

The Treasury Secretary proclaimed to Congress and the media that the financial system was about to collapse if Congress did not enact a deeply flawed and enormously expensive TARP program immediately without debate.  Government leaders yelled “fire” in a crowded auditorium and then seemed surprised when panic ensued. Even more panic was created by allowing or even causing one large institution after another to fail with highly inconsistent and unpredictable resolutions – bailing out some, letting others simply fail, and doing government-assisted deals on others.

I’m delighted Acting Comptroller Hsu is raising the questions he is raising about how we will handle the resolution of large regional banks should they get into trouble down the line.  The question is critically important because the day could come again when regulators will need to deal with such issues.

I’m not particularly concerned about our ability to work our way through these potential problems in a fashion that maintains public confidence and stability throughout our financial system so long as we study and understand the successful resolution and restructuring of the financial system from the late 1970s through the early 1990s. And we must also study and understand the serious mistakes made during the 2008-2010 period and the lost decade that followed.

From economic sleight of hand to stark reality by Thomas P. Vartanian and William M. Isaac published by The Hill on March 21, 2022

From economic sleight of hand to stark reality by Thomas P. Vartanian and William M. Isaac published by The Hill on March 21, 2022

Politicians must think voters live in an alternate reality. Why else would they push fantastic fictions about the boogeymen they claim are responsible for inflation, when every morning they see the culprit staring back at them in the mirror?

The bill for years of unbounded spending and pandering for votes is coming due, and, as is often the case, it is being exacerbated by unanticipated events. This time those events include the pandemic, war and technology. So now it’s time for adults to step up and stop the rhetorical gymnastics from deflecting from the hard and intelligent conversations that must be had about the serious issues that threaten our nation’s future.

Our national debt unceremoniously hit $30 trillion dollars at the end of January — three years sooner than the Congressional Budget Office (CBO) had projected in 2020. That is the equivalent of a $92,000 debt incurred by every person in America. For some perspective, the national debt hovered in the $6 trillion range in 2000, and $14 trillion in 2010.

Too much government debt is bad for many reasons, no matter how many times politicians try to portray it as government investment. Governments don’t invest, they spend, and that spending leads to higher interest rates and inflation when it gets out of control. Higher interest rates are a double whammy, making it more costly for the government to borrow to service its interest and principal obligations.

The CBO estimates that the country’s net interest costs will be a whopping $60 trillion over the next three decades. Left to its own devices, Congress would spend even more than the CBO can imagine. These are numbers that America simply cannot afford if it is to address its present and future domestic and international problems and maintain economic, technological and military superiority in a frighteningly dangerous world.

About the same time that the national debt hit $30 trillion, the Federal Reserve’s balance sheet reached $9 trillion. Again, for perspective, the assets on the Fed’s balance sheet totaled less than 10 percent of that – about $800 billion – just before the badly mishandled financial panic of 2008-10.

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It’s time to cut the FDIC Board down to size by William M. Isaac published by American Banker on March 18, 2022

It’s time to cut the FDIC Board down to size by William M. Isaac published by American Banker on March 18, 2022

Former Federal Deposit Insurance Corp. Chairman Sheila Bair expressed her concerns this week about the recent turmoil at the FDIC which led to Chairman Jelena McWilliams resigning prior to the end of her statutory term. The FDIC board, by law, is to be composed of five members, no more than three of which can be from the same political party.

Today, the FDIC board has just three members, all three of whom are Democrats and two of whom are ex officio members serving by virtue of their positions as the head of the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency.

The FDIC board currently has two vacancies due to the Biden administration’s failure to appoint two members from the Republican party. Chairman Bair urges the Biden administration to act swiftly to nominate two Republicans to serve on the FDIC board, which she believes will likely reduce the partisan battles at the FDIC. Chairman Bair also suggests that statutory terms be lengthened for board members at independent agencies, and the chairs of such agencies be protected from being forced out before the expiration of their terms.

These suggestions are worthy of consideration, to be sure, but I’m concerned some of them might well make the agencies less responsive to the mood and needs of the country.

For well over the FDIC’s first half century, its board had three members, no more than two of which could be from the same party. There were two appointed members plus the comptroller of the currency. I was appointed in 1978 as the Republican member of the FDIC board by President Carter. FDIC Chairman George LeMaistre, a Democrat, was replaced soon after by Irvine Sprague, a Democrat appointed by President Carter. The third board member was Comptroller of the Currency John Heimann, a Democrat.

This system was not perfect, and we had our disagreements, but it was collegial and highly efficient. We rarely had negative votes at the board, as we tried to work out compromises which are critically important to maintaining confidence in the banking system, particularly in perilous economic times like we faced during the 1980s when some 3,000 banks and thrifts failed and major banks throughout the country were teetering.

I disagreed with Chairman Sprague on many issues. But I rarely, if ever, cast a negative vote at a board meeting because I felt it was essential that we displayed unity when dealing with serious and complex banking issues, such as when we voted to bail out the largest bank in Pennsylvania in 1979. Despite reservations, I believed it would not have served the national interest for me to cast a negative vote on that rescue package.

When President Reagan defeated President Carter in 1980, I was eager to take over as chairman, as we foresaw massive problems ahead for the FDIC. But I remained as the minority director until the Treasury secretary recommended that President Reagan appoint me chairman in 1981. Irv Sprague and I literally changed offices on opposite ends of the FDIC’s sixth floor, and we served together on the FDIC board until I left at the end of 1985, two years past the end of my statutory six-year term.

This leadership arrangement at the FDIC was not perfect, but it was pretty close to it. Unfortunately, the powers that be in Washington came up with the very bad idea of adding two new members to the FDIC board, the head of a newly created Consumer Financial Protection Bureau plus a fifth board member to serve as vice chairman (to avoid 2-2 deadlocks). These thoughtless moves did nothing to strengthen governance at the FDIC, and instead turned the FDIC into a political battleground leading to the kind of partisan fighting we witnessed recently.

It is surely time for Congress to reform the FDIC, but not by continuing or extending the current failed governance structure. Let’s return to a three-member, bipartisan FDIC board consisting of two presidentially appointed members (one of whom will be designated chair by the president) plus the comptroller of the currency. The president will appoint the chair until a new president takes office. An outgoing chair will be able to remain on the board until his or her six-year term expires.

Our nation desperately needs a thoughtful and independent FDIC to grapple with swiftly changing financial markets and crises. It requires a proper governance structure to ensure it fulfills its mission of protecting our nation’s banking system so crucially important to our economy and the public.

Inflation: Where do we go from here? By William M. Isaac and Richard M. Kovacevich published by The Hill on February 5, 2022.

Inflation: Where do we go from here? By William M. Isaac and Richard M. Kovacevich published by The Hill on February 5, 2022.

In just the past two decades, Congress and several administrations, with full support from the Federal Reserve, have grown our budget deficit to over 130 percent of GDP with no end in sight. This increase has put the U.S. among the top 10 worst deficits in the world, alongside Greece and Italy. According to the U.S. Treasury Department’s recent Financial Report of the U.S. Government, “The current fiscal policy of the U.S. is not sustainable.”

This cannot continue, and the Federal Reserve must immediately cease aiding and abetting it. The scourge of inflation is upon us again. For a playbook on how we might deal with it, we can look to the period from the late 1970s through the 1980s, when we dealt with it successfully, albeit with extreme pain and disruption.

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It’s time to rethink the mission of the Federal Home Loan Bank system by Cornelius Hurley and William M. Isaac published by American Banker

It’s time to rethink the mission of the Federal Home Loan Bank system by Cornelius Hurley and William M. Isaac published by American Banker

Below is an open letter to Sandra L. Thompson, President Biden’s nominee for director of the Federal Housing Finance Agency.

Dear Ms. Thompson:

Please add our voices to the chorus of those cheering President Biden’s nomination of you as Director of the Federal Housing Finance Agency. Your extensive record of achievement at the FHFA and the Federal Deposit Insurance Corp., indications of senatorial support for your nomination, and the skill with which you handled your confirmation hearing on Jan. 13, leave little doubt that the U.S. Senate will take favorable action on your nomination in the near future.

At your confirmation hearing last month, you took note of the “relatively low earnings” of the 11 banks that constitute the Federal Home Loan Bank System. As we pointed out in a recent article in American Banker, not only are earnings of the system’s banks low but their advances have declined precipitously in recent years along with their future prospects.

The system faces at least two strategic challenges. First, it finds itself in the unenviable position of fighting the Federal Reserve as the latter has flooded the banking system with liquidity. Second, the system’s member/owners consist exclusively of depository institutions and insurance companies at a time when the vast majority of mortgages are being originated by nonbanks that are excluded by law from the system.

The system’s secular decline has prompted some to call for consolidation of the 11 regional banks. Others question the very relevance of a system designed to address the challenges of the Great Depression to a modern financial system whose perimeter is being reshaped daily by the forces of competition and financial technology.

It is understandable that in the early days of your tenure as Director of the FHFA you will focus on the future role and structure of the two most prominent government-sponsored enterprises, Fannie Mae and Freddie Mac. We strongly urge, however, that even in the early days you initiate a strategic review of “the other GSE,” the Federal Home Loan Bank system.

This review can begin by asking these two key questions: 1) Currently, and for the foreseeable future, does the Federal Home Loan Bank System serve a useful purpose? and 2) Should the system be repurposed to meet the financial needs of the modern era? The answers to these questions are, in our opinion, respectively and emphatically, “No” and “Yes.”

The Federal Home Loan banks occupy a prominent position in the housing industrial complex, that firmament of lobbyists, lawyers and assorted actors referred to as the “housers” by Joe Nocera and Bethany McLean in their book about the recession of 2008-09, “All the Devils Are Here.” For almost 90 years, they have provided backup liquidity to the banks, credit unions and insurance companies that are the owners of the 11 banks from New York to San Francisco. Moreover, the system has an admirable though understated role in funding affordable housing.

There are many financial deserts, however, for which the oasis of bank liquidity could provide the same public good as it did to housing in the 1930s. Infrastructure, climate change, small business, economic inequality and serving the unbanked are just a few of the sectors currently outside of the regulatory perimeter of the Federal Home Loan banks. It need not be so.

Unleashing the full potential of the system does not mean opening the spigots of federal dollars for every special interest that comes along. The Federal Home Loan banks are experienced in the use of haircuts, credit enhancements and sound underwriting to ensure that the modernized mission of the system is carried out in a safe and sound manner under the watchful eye of the FHFA. It is this culture of prudent lending that allows the Federal Home Loan banks to boast that not a single dollar has been lost on advances by any of its banks.

To assist you in exploring the possibilities inherent in a reimagined system, we urge that you appoint an advisory committee consistent with the standards of the Federal Advisory Committee Act. From your experience at the FDIC, you realize how effective such committees can be to an agency’s executive management.

Members of the committee would be appointed by you and would represent current system stakeholders consistent with the Act. Crucially important, however, would be the appointment of industry leaders and academics who could contribute their creative talents in exploring the potential stakeholders of a more modern and relevant system … a system in touch with current demands for liquidity.

To inform the work of the advisory committee we also urge that you issue a call for papers on the topic of reimagining the system. In this regard, acting Comptroller of the Currency Michael Hsu’s recent call for papers to address climate change and banking regulation may be instructive. We anticipate that consumer groups, specialty lenders, non-governmental organizations, academics and many others will be eager to offer up their ideas about how a system currently in decline can be reinvigorated to serve today’s needs.

Of course, we stand ready to assist you in any way we can in this effort.

With every good wish,

Cornelius Hurley and William M. Isaac

Former FDIC Chairman William M. Isaac Launches New Global Advisory Firm ‘Secura/Isaac’

Former FDIC Chairman William M. Isaac Launches New Global Advisory Firm ‘Secura/Isaac’

It is my distinct privilege to share with you the launch of our new global advisory firm: The Secura/Isaac Group.
I am deeply honored to be joining a truly exceptional team of finance, regulatory and tech experts and friends, all of whom are much respected by financial institutions, regulatory agencies and central banks around the world. Together, we will help our financial services clients successfully navigate the increasingly complex regulatory landscape.

There’s more in today’s press release, a copy of which you will find below. And be sure to visit our new digital home at securaisaac.com for more information on our firm, its unique advisory services and regulatory expertise.

Have a great start into the new year and let’s please stay in touch. I hope paths cross again soon.
Bill Isaac, former Chairman, FDIC

 

Former FDIC Chairman William M. Isaac Launches New Global Advisory Firm ‘Secura/Isaac’
Expert team to help financial services sector address challenges caused by global pandemic, cybercrime and shifting regulatory landscape

NEW YORK/WASHINGTON, D.C. (January 13, 2022) – William M. Isaac, former FDIC and Fifth Third Bancorp Chairman, today announced the formation of Secura/Isaac, a global advisory firm. The firm specializes in helping clients navigate the regulatory landscape which has become exponentially more complex with the unprecedented challenges caused by rapid and enormous advances in technology, increasingly complex regulatory requirements, cybercrime, and a global pandemic. Mr. Isaac has assembled an expert team that is highly respected globally by financial institutions, regulatory authorities and central banks.

Through its guiding principles of honesty and integrity, high-quality work, and clear communications, Secura/Isaac focuses on corporate governance, risk management and regulatory compliance for the global financial sector. The team has an extraordinary breadth and depth of expertise in technology, regulatory domain, M&A and governance.

Chairman William Isaac has an unparalleled career in the financial industry and public service, spanning over 50 years. From 1978 through 1985, he served on the board of the Federal Deposit Insurance Corporation (FDIC) under Presidents Carter and Reagan and was named Chairman of the FDIC by President Reagan in 1981. As the youngest FDIC board member and chairman in history, Mr. Isaac led the FDIC during the banking and thrift crises of the 1980s, working closely with the late Federal Reserve Board Chairman, Paul Volcker, helping to maintain stability in the financial system during an extremely tumultuous period in which over 3,000 banks and thrifts failed, including many of the largest in the nation.

“It’s my distinct privilege to be leading such a distinguished and well-respected team,” said Mr. Isaac. “Having served for decades as bank lawyer, a top regulator, a board member, and as Chairman of a large bank, I know the perspectives and challenges of each. It’s an honor to be able to help bring financial executives and their regulators to common ground.”

Secura/Isaac offers highly customizable technology solutions, as well as advisory services in the areas of corporate governance, risk management and regulatory compliance; information governance, tech and cybersecurity; strategic planning; and safety and soundness.

“Uncertain times call for a fresh, entrepreneurial advisory approach,” said James C. Watkins, President of Secura/Isaac. “With exceptional experience and expertise, we are perfectly positioned to provide this perspective to our clients.” Mr. Watkins has nearly four decades of domestic and international bank regulatory experience and may be the only senior official to have served the FDIC through the bank and thrift crises of the 1980s and 1990s, the financial and banking crisis of 2008 to 2013, and the pandemic of 2020.

About Secura/Isaac

Secura/Isaac, a global advisory firm led by former FDIC and Fifth Third Bancorp Chairman William Isaac, is the preeminent strategic advisor and partner of choice for regulated financial institutions, non-banks, FinTech firms, central banks, and domestic and international regulatory agencies.

Drawing on extensive financial industry experience, regulatory expertise, and senior executive and regulatory relationships, the firm’s team of former regulators and financial executives helps the financial services sector address unprecedented challenges brought about by a global pandemic; rapid advances in technology; cybercrime and a shifting regulatory landscape.

More information can be found at securaisaac.com

What if politicians were required to tell the truth? by Thomas P. Vartanian and William M. Isaac published by The Hill

What if politicians were required to tell the truth? by Thomas P. Vartanian and William M. Isaac published by The Hill

My friend and well-known banking attorney, Tom Vartanian, and I wrote this op-ed in The Hill today in response to Governor Inslee’s recent proposal that elected officials be criminally prosecuted for making false statements about elections.  We think he did not go far enough and should have suggested that candidates and elected officials be subject to the same standards of honesty and punishments that public company executives and bankers are.  It just could reignite the lost art of political compromise. Bill Isaac, Former Chairman FDIC & Fifth Third Bancorp

Leadership is in scarce supply these days. So kudos to Washington Gov. Jay Inslee (D) for his courage in proposing the novel idea that truth-telling should be made mandatory for politicians. His proposal falls a little short of the mark in making it a crime only for an elected official to lie about election results.

But we hope there is more than political showmanship at work here and that the governor has a well thought out long-term strategy that doesn’t stop at election results. The natural evolution of his strategy must be to make it a crime for someone running for or holding political office to lie.

That would certainly be a welcome and seismic shift in the world of politics. It would make our elected officials and their political operatives live up to the same standards the rest of us are required to do.

Consider a world where politicians told the truth. They would have to publicly admit that their positions weren’t really their positions, and that if elected, they intended to serve the interests of those who contributed the most money to their campaigns.

Yikes, how refreshing would that be? They might even have to congratulate their opponents for doing something smart, rather than making believe that 100 percent of every word they said was drivel. That could be the first step back toward the dying art of political compromise.

How can we broaden the scale of Inslee’s idea? There is a good model that we know well — the rules that legislators have created for executives of public companies. They are required by law to tell the truth, the whole truth and nothing but the truth to their constituents — their shareholders.

The Securities Exchange Commission’s (SEC) Rule 10-b.5 makes it unlawful for any corporate executive to defraud a shareholder regarding the sale of the company’s securities. Congress and the SEC were smart — they did not leave that standard blurry so that it could be easily circumvented with weasel words that could trick people. They included as violations of the law not only making false statements but also omitting material facts that would be necessary to make the statements accurate.

Imagine this standard being applied to politicians regarding the sale of their candidacies and policies. Political speeches would be shorter, the media would have less to talk about and senseless debates at the dinner table over assertions that were never meant to be taken literally would be avoided.

Character and real policy issues would begin to matter. That would be a refreshing change of pace for all of us who are weary of listening to a barrage of incendiary political accusations and assertions every day. We suspect this change might even reduce psychiatric bills and the consumption of opioids.

To make such a truth-telling requirement work, there would have to be penalties attached to violations of the rules. Why not adopt the same rules that Congress wrote for bank executives? In the first instance, for lesser transgressions, the penalty would be monetary, with fines of up to $1,000,000 a day for each violation. As with banks, where fines are often assessed against the bank rather than the executive, they could be assessed against an elected official’s campaign funds. More serious violations would generate jail terms, just like bankers face for their misdeeds. And as in the banking business, where the FDIC sues managers of failed banks, elected officials could be held responsible for political fabrications that damaged those they represent. Fair is fair, right?

Of course, such a broad, symmetrical approach to truth telling has no chance of being enacted into law by the elected officials who would be subject to them. Gov. Inslee no doubt realizes that and has decided to start with a more reasonable first step, focusing on a pernicious election tactic being honed by losing candidates of both parties. Repeat a litany of factors that suggest the illegitimacy of an election until the assertion gains an air of believability, and then declare yourself not the loser.

If Inslee is suggesting that this strategy creates a cancer that eats away at democracy, he is right. But we hope that he will go to the next step and attack the larger problem by recommending that elected officials be held to the same standards of truth-telling that the rest of us are.

Thomas P. Vartanian is the author to “200 Years of American Financial Panics: Crashes, Recessions, Depressions And The Technology That Will Change It All” and executive director of the Financial Technology & Cybersecurity Center. William M. Isaac is former chairman of the FDIC and Fifth Third Bancorp, and is chairman of the Secura|Isaac Group and Blue SaaS Solutions.

Where have all the Leaders Gone? by William M. Isaac

Where have all the Leaders Gone? by William M. Isaac

Everywhere I go these days people are worried about the economy in general and the financial system in particular. They know something is terribly wrong but they don’t quite understand what it is or why. The primary problem is that the Federal government is functioning very poorly, and sometimes barely at all. We do not have a political consensus in this country and have not had one for most of the past two decades. We desperately need a new leader to emerge — a new Roosevelt, Eisenhower or Reagan who will take command, persuade us to take the long view, and do what’s right for future generations.

I’m sure they exist but our political system has not produced one in far too long. Our nation’s financial system has been on remote control for most of the past too decades with either no direction or the wrong kind of direction. The senseless financial panic of 2008 to 2010, the effects of which were felt for a decade thereafter, did not need to happen or to have had anywhere near the negative impact it did.

Due in part to phenomenal developments in technology, the economy and the stock market have been on fire the past several years, despite a seriously malfunctioning government. The administrative and congressional branches are in chaos, as are the financial regulatory agencies. Federal fiscal policy has been careening out of control since 2000, when the Federal deficit stood at just over $5 trillion.

It took over 200 years to accumulate that deficit. Now, just two decades later at the close of 2021, the Federal deficit stands at over $30 trillion, and the leadership of our currently ruling party is clamoring to add trillions more in debt. The Federal Reserve has ceased being a restraint on reckless political spending and instead has been printing excessive amounts of money, setting off inflation it took us more than a decade of destruction and pain to eradicate in the 1980s.

Where have all the leaders gone in our fragile democracy, and what will it take to get them back? We the people need to step up very soon and and elect strong new leadership to once again put our nation back on a sound footing. The longer we wait, the more painful the reconstruction will be. I’ve seen this movie before, and it does not end well without strong, wise leaders willing to make very difficult decisions and persuade us to follow their lead.

Bill Isaac, Former Chairman, FDIC