I never get too old for this Christmas classic made shortly before I was born that over time has become one of America’s all time best films as recognized by The American Film Institute.
As we begin to countdown to Christmas I look forward to seeing one of my favorite films of all times, Franks Capra’s “It’s a Wonderful Life”. It’s a schmaltzy film by today’s standards and appears to have also been to NY Times film critic Bosley Crowther at the time, saying that Capra’s portrayal of small town life “resembled theatrical attitudes rather than average realities.” None-the-less I warmly receive this movie each year imagining as many do that life was simpler back then, when in fact it probably wasn’t.
Perhaps my most favorite scene in this movie is when the young George Bailey realizes that his boss at the pharmacy, Mr. Gower, has accidentally mixed a deadly prescription for a customer’s child. Gower is intoxicated after receiving the wrenching news in a telegram that his son, who was away at college, died from influenza. In his distraught and inebriated state-of-mind Mr. Gower unwittingly uses a poison powder for the medicine a sick child needs. Young George sees this but is hesitant to approach Mr. Gower about his error in his overwrought state. After he tries to get advice from his dad who is tied up arguing with the “heavy” in the picture, Henry Potter, he returns to the pharmacy where Mr Gower confronts him after receiving a call from the child’s mother, informing him that she has not yet received the prescription. He pulls George into the back room and berates him for failing to do what he’s told, slapping the boy several times across the face as he yells at him.
The young Bailey is finally able to communicate to Mr. Gower what he’s done and the old pharmacist, realizing his near fatal error, breaks down and cries as he embraces an also sobbing George Bailey. The power of this scene and the courage of the young Bailey are brought home later in the movie when he has been granted his wish that he never be born, finding out that had he not been there to stop Mr. Gower, his old boss and friend later in life would have been ruined following the tragic death of his son and sent to prison, eventually living out his post-prison life as drunken derelict in Bedford Falls.
This is but one scenario that Capra brings home in his movie that dramatizes how a single act can have a long term affect. Most of our actions are daily and seemingly mundane but everyone of us have perhaps said or done something once in our life that has made an impact on another and perhaps altered their life to some degree. Were we always aware of how our comments and actions are filtered by those we come into contact with, we might weigh them more prudently and less-selfishly. Many a child has either gown up to greatness or disrepute based on the self-esteem or lack of it generated by a peer, sibling or a thoughtless parent.
WALL STREET THEN AND NOW
The scene however that has some special relevance for us today is the one that reminds us of unethical bankers and their exploitation of the “little man”. Powerful banker Henry Potter exposes his ruthless side to the Bailey Building and Loan Company’s board of directors following George’s father’s death, Peter Bailey. Potter bestows false praise on the elder Bailey, calling him a “man of high ideas, so-called” before depicting him as nothing more than a “starry-eyed dreamer .. [who stirs such people] up and fills their heads full of impossible ideas”. “What does that get us?”, Potter rhetorically inquires. “A discontented, lazy rabble instead of a thrifty working class”
If there had been more Potters and fewer Baileys following WWII this nation may have never seen the creation of our once strong and highly productive working class that Potter refers to as “lazy rabble”. These comments struck a chord inside George Bailey who seems to foretell where such notions will lead if some reasonable approaches aren’t employed to help this disenfranchised group of income earners.
“Just remember this Mr. Potter that this rabble you’re talking about; they do most of the working and paying and living and dying in this community. Is it too much to have them work and pay and live and die in a couple of decent rooms and a bath. Anyway my father didn’t think so. People were human beings to him. But to you, a warped, frustrated old man, they’re cattle.”
That concept of Peter Bailey’s became a reality for the American people some thirty years later when Congress passed the Community Reinvestment Act, a law “aimed at freeing credit for underserved neighborhoods. Congress created the CRA in 1977 to reverse years of redlining and other restrictive banking practices that locked the poor, and especially minorities, out of homeownership and the tax breaks and wealth creation it affords.” The thrust of that legislation was to get “federally regulated and insured financial institutions to show that they’re lending and investing in their communities” to generate a further expansion of the wealth in this nation.
Ironically however it was around this time that conditions began to change for the worse and eventually led to one of to the greatest income gaps this country has seen between the haves and have-nots, thanks in large part to the de-regulation of corporate financial institutions during the Reagan era. In all fairness to the Henry Potter character though, he was unwilling to lend to this class of people who at least had a job, insurance and references as George Bailey points out to him, where today’s financial lenders violated this basic premise of home mortgage lending which we now refer to as predatory lending.
Many on the Right today blame the CRA legislation as “the root of our current calamity.” by putting “tremendous pressure on Fannie Mae and Freddie Mac — who in turn pressured banks and other lenders — to extend mortgages to people who were borrowing over their heads”, more recognizably referred to as subprime lending.
Fannie and Freddie, however, didn’t pressure lenders to sell them more loans; they struggled to keep pace with their private sector competitors. In fact, their regulator, the Office of Federal Housing Enterprise Oversight, imposed new restrictions in 2006 that led to Fannie and Freddie losing even more market share in the booming subprime market.
What’s more, only commercial banks and thrifts must follow CRA rules. The investment banks don’t, nor did the now-bankrupt non-bank lenders such as New Century Financial Corp. and Ameriquest that underwrote most of the subprime loans.
These private non-bank lenders enjoyed a regulatory gap, allowing them to be regulated by 50 different state banking supervisors instead of the federal government. And mortgage brokers, who also weren’t subject to federal regulation or the CRA, originated most of the subprime loans. SOURCE
STILL A GREAT MOVIE
Today we have award winning documentaries like “Inside Job”, “Collapse” and “IOUSA” as well as insightful movies like “The Company Men”, “Margin Call” and HBO’s “Too Big to Fail” to depict the state of mind Capra portrayed in his Potter character.
But as depressing as this parallel is today and the movie’s sentimentality, this Capra classic is a tradition with me. I still get choked up at the end when Harry Bailey raises a glass and toasts his big brother, surrounded by all those who came to rescue George in his hour of need, as “the richest man in town”.