Bank mess could have been avoidedCongress should be...

the Forum

June 28, 1991

Bank mess could have been avoided

Congress should be ashamed of itself. The American taxpayers are going to foot the $200 billion-bailout of FSLIC to clean up the S&L mess. And now there are indications the FDIC may require billions of taxpayer dollars to salvage poorly run banks.

All this could have been avoided if Congress had embraced a 1983 recommendation of the Grace Commission which would have eliminated the flat rate insurance premium FSLIC and FDIC charge. The new rate would have reflected the degree of risk associated with the individual institutions on a case-by-case basis.

To quote the Grace Commission report: "The current practice of charging uniform premiums to all financial institutions does not provide incentive for the institutions to avoid high-risk or speculative lending. If variable premiums were adopted, risk would be more carefully weighted, thus reducing potential federal exposure in the event of bank failure."

Eight years and hundreds of billions of dollars later, a Securities and Exchange Commission's study in March of 1991 recognized this same risk. The SEC study said: "The existing flat rate deposit insurance premium results in large cross-subsidies from safer banks to riskier banks. The current flat rate premium not only rewards the riskiest banks, but it greatly underprices the aggregate risk assumed by the insurer."

As Congress considers legislation to overhaul the banking system, it should keep in mind that taxpayers have already been overburdened with the shameful consequences of congressional inaction. Legislation should make banks safe, but not at the expense of the hapless taxpayer who, after all, was not responsible for the problem in the first place.

The American people should be asking if this recession could have been avoided. How much stronger would the economy be now, how many thousands of people would still have jobs, how many businesses would still be solvent, how many families would still be secure, in short, how many lives would be changed for the better, if those who were supposed to look out for our interests really had?

John J. Bishop

The writer is a member of the House of Delegates representing 0 the 9th District.

Perks of power

Why the continuing furor over John Sununu's travel habits? The chief of staff is merely exercising one of the perks of power enjoyed by the rich and influential.

It's a contemporary version of the droit du seigneur of feuda days. Substitute the American taxpayer for the feudal bride and you get the picture.

Of course, we all know what the bride got.

Myron Subotnik

Baltimore

*

It was Tom Paine, the magnificent revolutionary who, as the American Revolution moved into the bleak winter of 1776, wrote, "These are the times that try men's souls."

It was John Sununu, George Bush's megalomaniacal chief of staff who, as America moved into the crucial spring of 1991, traveled in corporate jets that flew in the face of ethics.

Mr. Sununu apparently believes these are the times to buy men' souls.

Leon Peace Ried

Baltimore

A love of music

I read with great pleasure Lan Nguyen's article on Blanche Bowlsbey ("She still knows the score," June 21). What a grea

lady and well-deserving of your laudatory article!

I had the good fortune to have had a music appreciation class from her at Baltimore Junior College in 1961. Already a lover of music and a veteran of a music appreciation class while attending Western Maryland College, I went into her class expecting, once again, to hear only classical music. In my previous course, classical music had been called "good" music and described as the only kind worthy of serious study.

Mrs. Bowlsbey's course was radically different. She taught me that there was merit in all kinds of music, from classical to country. I left her class with a heightened interest in music of all kinds and through the years became an inveterate and eclectic collector. With time, I became interested in discovering melodies which showed up in a wide variety of places and songs which, in one form or another, had lasted through long periods of history, often on several continents.

As an American history teacher for 27 years, I have always made music an integral part of my instruction and, over time, have interested many students in types of music with which they had been previously unfamiliar. I will never be the music aficionado that Mrs. Bowlsbey is, but, in my own way, I am continuing her mission of helping students develop a love of all types of music. For many of them it is a favorite part of history. Thus, my students and I each have Mrs. Bowlsbey to thank. They can thank her for helping make history more interesting, and I thank her for a lifetime of greater appreciation for, and understanding of, all kinds of music.

David M. Clements Jr.

Freeland

Louise Lamb

I read with much regret of the recent passing of Louise Lamb. I was fortunate enough to have taught in the classroom next to Mrs. Lamb's at Old Court Junior High School for one year during my early teaching career. Mrs. Lamb was the consummate teacher.

Although small in stature and soft of voice, she nevertheless had the commanding presence and take-charge attitude of the born teacher. There was never a doubt in the minds of her students or colleagues as to who was in charge in her classroom.

She was a kind and compassionate person whose dignity, poise and sense of humor earned her much respect. She often urged me to call her Louise. I never could. It would have been like calling Pavarotti "Lu."

I learned much from Mrs. Lamb during that short year, and I consider myself fortunate to have had the benefit of her experience.

Ann Noon Power

Catonsville

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