Old Man Potter's Revenge

We're thinking of this bailout all wrong

I've always been a sucker for the sentimental Christmas favorite It's a Wonderful Life. After all, there's a lot to love. For starters, there's Jimmy Stewart and Frank Capra making their post-World War II comeback—of sorts, because despite eventually becoming an icon of Americana, the film was a bit of a disappointment at the box-office (ranked 26th in total receipts for the year, just beating out Miracle on 34th Street). But for a guy who writes about real estate and urban redevelopment, there's the added bonus that much of the film's action revolves around real estate and the role it plays in building community. And the subplot involving the complex love-hate relationship Stewart's character has with his "drafty old barn of a house" is something anyone who has ever owned a historic home will immediately identify with.

Watching the film recently, however, I noticed that current events cast one of the film's key moments in a rather different light. You know the scene: George and Mary are bound for their honeymoon when they witness a run on the town's bank. And, as a similar panic threatens to swamp George's Bailey Brothers' Building and Loan, he and Mary offer up their own cash—the "kitty" they've saved up for their honeymoon—to tide their nervous depositors over.

The scene, which occurs years prior to the film's circa 1945 present, is never explicitly placed in time. Certain clues, such as Mary's reference to "feeling like a bootlegger's wife" as she fans the couple's stack of cash, suggest that it's early in the onset of the Great Depression. And Ernie the cabdriver's observation that the crowd rushing the bank has "got all the earmarks of a run," reminds us that, while Wall Street "crashed," it took awhile for the Depression's full effects to settle in on what present-day politicians annoyingly insist on calling "Main Street" (to better evoke images of idealized small towns like the film's Bedford Falls).

Such thoughts make me wonder where we are now. Is it still 1929 and we've yet to see the worst? Or, with an inauguration ahead, have we fast-forwarded to 1933, and the only thing we have to fear, hopefully, is fear itself? It's tough to say. There are, of course, some differences. Despite the media's penchant for invoking the Great Depression (including, I suppose, this column) 7 percent unemployment pales in comparison to the 25 percent or more at the Depression's darkest. And, while foreclosures are certainly high, I've yet to see a Hooverville.

The response has been rather different, too. In the film, it's Mary who reaches in her purse, pulls out the couple's cash, and asks of the assembled depositors how "much do you need?" This time around, it's as if Bert the cop shook down the depositors at the door, took what little pocket money they had, and gave it to George and Potter so they could put it in the vault. Personally, I'm a little surprised conservative pundits haven't connected the dots and cast the feds, not as the generous George Bailey, but as old man Potter, exploiting the crisis to take control of the town bank.

Frankly, the notion of a town bank—or, indeed, a small building and loan like Bailey Brothers—is as much an anachronism today as Bedford Fall's quaint mom-and-pop dominated main street. "Too big to fail," is a phrase that's still being tossed about in regard to various bailout proposals. But what if bigness is a big part of the problem: the metastasizing and centralization of American finance? In that light, does the solution to our current crisis depend on further centralizing on the part of the feds? Or is it ultimately in the hands of the millions of George Baileys across America, thinking on their feet and making the most of what little cash they have?