Clarifying Words

We live in a era of competing viewpoints and rhetorical advocacy.

Often logic, reason and especially facts are missing in the fire of verbal combat  or when issuing public relations statements supporting a position.

The more consequential the decision or a person’s position, the more elaborate the verbal bouquets.  These communications are not meant to persuade. Rather they entertain, advocate, sometimes threaten while shimmying past critical issues.

Examples this week include the speeches by the President and Secretary of War to hundreds of senior military  commanding officers, policy utterances by single NCUA board member Hauptman, or the rhetorical display announcing NCUA’s approval of the DCU merger with First Tech.

When Words Matter Most

So it was enlightening to read  someone  explaining at length what is at stake in our often charged and sometimes flippant public dialogues.  Here is an example:

In Boston yesterday Judge William G. Young answered an anonymous correspondent who trolled the judge on June 19 by writing a postcard that said: “TRUMP HAS PARDONS AND TANKS…. WHAT DO YOU HAVE?” Young reproduced the writing at the top of his decision finding that Trump’s attempted deportations of legal residents for their pro-Palestinian speech violated the First Amendment.

Then the judge answered: “Dear Mr. or Ms. Anonymous, Alone, I have nothing but my sense of duty. Together, We the People of the United States—you and me—have our magnificent Constitution.”

 “The United States is a great nation, not because any of us say so. It is great because we still practice our frontier tradition of selflessness for the good of us all. Strangers go out of their way to help strangers when they see a need. In times of fire, flood, and national disaster, everyone pitches in to help people we’ve never met and first responders selflessly risk their lives for others. Hundreds of firefighters rushed into the Twin Towers on 9/11 without hesitation desperate to find and save survivors. That’s who we are.

“And on distant battlefields our military ‘fought and died for the men [they] marched among.’ Each day, I recognize (to paraphrase Lincoln again) that the brave men and women, living and dead, who have struggled in our Nation’s service have hallowed our Constitutional freedom far above my (or anyone’s) poor power to add or detract. The only Constitutional rights upon which we can depend are those we extend to the weakest and most reviled among us.”

 “I fear President Trump believes the American people are so divided that today they will not stand up, fight for, and defend our most precious constitutional values so long as they are lulled into thinking their own personal interests are not affected.

“Is he correct?”

 

 

A Morning Reflection

Hardin and Weaver were the dominant morning radio co-hosts for the  going-to=work drive in DC in the 1980’s.   Right before the 7:00 AM news update, they would finish their broadcast hour with a morning hymn.  A moment of grace before world events, sports weather and traffic briefs.

I was reminded of their disruption of secular events by an observation from academic Ti,pthy Snyder during his current trip to Ukraine.  In a front line town, he describes moments of incredible kindness by residents living under never ending threats of drone attacks.  He writes:

Always be kind.

Does kindness seem like a naive message during a war of extermination? Not to me. I admire friendly parents and kind children in the best of times, and I will admire them in the worst of times.

To defend you have to have something to defend. It will always be out of reach, but it matters whether or not you are reaching, or teaching others to reach.

The following anthem, Until Love is Spoken,  was written in 2022 during Covid.  But the words are appropirate for today’s’fraught circumstances. In this interview  the composer Karen Marolli  relates her musical background.

(https://www.youtube.com/watch?v=OZq7gLsRfrg&t=216s)

The words  call for community engagement and hope.  One verse is:

And when our path of justice leads us to the dreadful fight,

Grant us vigor and entrust us with the power to do what is right, 

Grant us courage to be kind,

Grant us singleness of mind to free the world from hate and fear,

So only love is spoken here.

While not overtly religous language, it celebrates the power of purpose for a cause. Or, what matters is that your are reaching or teaching others to reach. 

 

 

Two Forms of Competition Always Present

Two classic strategies for creating competitive advantage are a superior employee centered service culture. The second is to embrace  innovation.

Following are two updates in both areas.

Minimum Wage in Banking Now Hits $25 per Hour

Bank of America will increase its minimum wage to $25 an hour next month, the final step in a long-term goal the company set several years ago. The move bumps pay up from $24, a level put in place last October, the company said Tuesday.

It translates to a full-time annualized salary of more than $50,000 and applies to all full-time and part-time hourly positions in the US. The change continues a series of hikes lifting the firm’s base pay from $15 in 2017.  Source:  Marketplace and (link)

Digital Assets and Innovation

I am a novice in understanding the world of digital assets from Bitcoin to all the stable coin options now being evaluated and offered by financial firms.

Whether used as a store of value or investment, payments between parties or for operating outside the regulated financial services sector, I have not been able to identify a compelling value proposition.

The hype and people rushing to get into this new form for financial service have only accelerated since the Genius Act passed by Congress last month.

Here is a summary of some activity and loopholes by analyst Aaron Klien from Brookings in the article: Interest by any other name should be regulated as sweetly (September 10, 2025)

Cryptocurrency is an asset masquerading as a payment instrument. Congress did not see through this illusion and created a dangerous loophole in the newly passed stablecoin law, the Guiding and Establishing National Innovation for U.S. Stablecoins Act, or “GENIUS Act”.  

The law is premised around a simple trade-off: Stablecoins are exempt from bank-like regulation and in exchange are prohibited offering interest on their coins. The law’s ink is not dry and crypto firms have already found a loophole, calling interest “rewards.” If we don’t close this loophole, it could cause massive problems resulting in losses by retail crypto holders, a bailout of big crypto, or a financial crisis.

Bitcoin started with dreams of being a global currency but has become an asset and, for many, a profitable investment (so far). One reason bitcoin works so poorly for payments is its swings in value. Enter stablecoins, usually pegged to the dollar, eliminating this problem. Yet, stablecoins are primarily used for buying and selling other crypto, not for ordinary transactions. While about one in seven Americans report owning crypto, only one in 50 Americans used any form of crypto, including stablecoins, to buy anything other than crypto in 2022.

So, if stablecoins aren’t used for payments, why do people own them?  For many, it’s the same reason they keep money in banks: earning interest. The new law prohibits interest, but what if someone called interest a different name? Would it pay as well?

Coinbase, the largest American crypto exchange, proudly markets 4.1% “rewards” for holding USDC, the largest American issued stablecoin. Crypto.com offers variable rewards based on market conditions, while highlighting its latest partnership with Trump Media Group on their crypto. Its competitor Kraken offers even higher: 5.5% rewards. Notice Kraken marketing an annual percent yield (APY) notation to look like interest. That’s what this is.

Technically, the new law only prevents stablecoin issuers like Circle, which issues USDC, from offering interest. Coinbase, Crypto.com, and Kraken do not issue these coins, they just hold their customers’ coins. Imagine if E-trade or Merrill Lynch offered customers money for letting them “hold” their stocks, and you’ll see the parallel.

The economics of this loophole are problematic. Crypto exchanges generate profit to pay “rewards” to people who deposit crypto through a combination of payments from the stablecoin holders and potentially using depositors’ funds to make their own investments. The larger the rewards customers are being paid, the riskier the investments generating that money. Banks do this with your deposits, but with tight limitations, constant oversight, and federal deposit insurance that fully covers 99% of depositors. Crypto exchanges have none of these guardrails, as FTX demonstrated when it took customer assets to speculate and collapsed. . .

Credit Unions Invest in Crypto

Klein’s analysis continues for another ten paragraphs.  What makes his concerns relevant for credit unions, is that there are numerous crypto related firms and credit unions now investing in stable coin services,  The primary goal is giving members access to the purchase and holding of digital assets.

Yesterday CU DAILY reported “Stablecore, a platform that enables community and regional banks and credit unions to offer stablecoins, tokenized deposits and digital asset products, said it has raised $20 million in funding, including from a credit union-backed fund.”  (link)

Stablecore’s purpose is to  serve as a “digital asset core,” unifying the critical components of digital asset offerings into a single platform.  The credit union  CUSO making the investment was Curql.

Both these announcements may challenge credit unions who are uncertain about their core values and competitive advantage.  So before you reach out to match competitors thrusts, remember success comes not from playing the game you find, but from defining the game you want to play.

An Anthem for 9/11 and Today

Words from Into the Fire by Bruce Springsteen.

Into the Fire

The sky was falling

And streaked with blood

I heard you calling me

Then you disappeared into the dust

Up the stairs, into the fire

Yeah, up the stairs, into the fire

I need your kiss

But love and duty called you some place higher

Somewhere up the stairs, into the fire

May your strength give us strength

May your faith give us faith

May your hope give us hope

May your love give us love… 

(https://www.youtube.com/watch?v=OM6lw40VPLg)

By Dr. Andrew Roth, Booknotes #211:

What cannot be permitted to be lost is the heroism and sacrifice of those who ran not away but into danger that day to try to save others. Like Fr. Mychal Judge OFM, Franciscan friar, priest, and chaplain to the New York City Fire Department. Fr. Judge is an alumnus of St. Bonaventure University . . . Fr. Judge is the first official victim of 9/11 – Death Certificate No. 1. He ran into the burning buildings to give aid, comfort, and last rites to “his guys” the firefighters of FDNY. His daily prayer was “Lord, take me where you want me to go; let me meet who you want me to meet; tell me what you want me to say; and keep me out of your way.”

My wife Joan dined at the Windows of the World atop the World Trade Center on the evening of September 10th.  The morning of September 11 she was participating in a NABE economic conference at the Marriott World Trade Center.   She walked to the Hudson river, crossed to New Jersey by ferry, and joined four strangers  renting a car to drive home to DC.

On the Waterfront

Lots of conflicting views on  the US economy.  Was discussing the prospect of state or local funding for an historic restoration project with a retired property developer yesterday.

He had moved to Maryland’s Eastern  shore from Montgomery County where he had many development projects. And of course financial ups and downs and many “interactions” with local and state government regulators.

Here is his observation from one indicator of the state’s economy.  Accurate for the entire situation or just anecdotal, I don’t know.  But it does remind us that as in  politics, all economic issues are ln the first instance local.

You’re right on. State resources??? I think the state declares bankruptcy in 2 years.
I drive across the Bay bridge a lot. Before Covid, always 10-15 tankers/container ships waiting at anchor south of the bridge to get into the port at Baltimore. Covid? Dropped to 3-5 boats waiting.
After Covid it picked right back up to 10-15. The port even retooled and floated in a $400 million  crane system that barely fit under the bridge. Everything was booming.
Now,  zilch….nada.. no boats, nothing waiting to unload.
The cost for that $400 million  crane to sit idle makes me cringe. The owners will go under, the bank that financed it will get hurt, and the loss of employment on top of those costs. Then add in the loss of tax revenues to the state and city and the loss of revenue to the truckers and rail systems every single day will add up.
I do not see resolution.
I see destruction.

A Labor Day Observation

A point of view:

Republicans have held the federal minimum wage to $7.25 for 16 years nowAt that rate, someone working 12 hours a day six days a week with no holidays, sick days, or vacation will earn $27,144 before deductions.  (source: Andrew Tobias daily column)

Jump the Likely Drop in Market Rates

Unless there is a complete change in market sentiment or a “black swan” event, the consenus is that the Fed will lower interest rates by .25% in September.  Or for sure by October.

If that is your assessment, why not get ahead of the market with a special announcement to your members such as:

We’ve lowered our mortgage rates!

If you’ve been waiting for a sign to buy a new home, this could be it. Take advantage of ournew rate discount

Or it could be auto loans, student loans or HELOCS.

If you wait till the Fed makes a move, you will just be part of the market’s noise.

Why not get ahead of the game?  Start your “lowering our rates” campaign while everyone else just talks about it.  The President might even take note of your initiative!

Learning from History as We Debate the Past

Eighty years ago in August  1945  America exploded atomic bombs over Hiroshima and Nagaski. These actions propelled a quick end to the war with Japan.

President Truman’s  decision has been much debated since.  Some believe it was necessary; others disagree arguing that either a “demonstration” explosion or continuing the fight with an invasion of the Japanese homeland was the better next step.

As the topic will again be raised this week, I believe history provides an important perspective on this  decision. And insight as to how  we justify decisions now.

Two Post WW II Events

There were two WW II  related events that occurred when  while I was in the Navy on a ship homeported in Yokosuka, Japan.

The first was the return of the Okinawa islands to Japanese control via a treaty signed  in June 1971.  Return of this part of the Japanese territory was very emotional and deeply meaningful to the country.  Today Russia has failed to return the northern islands of Hokkaido they occupied at the war’s end.  It has left a deep emotional scar on the country’s  national pride.

The second was the surrender of the last Japanese soldier from WW II .   I remember the Japanese newspaper and TV accounts of this March 1974 event.  Here is  how the BBC described the event:

Lieutenant Onoda finally handed over his sword on March 9th 1974. He had held out in the Philippine jungle for 29 years. In interviews and writings after his return to Japan, Lt Onoda said he had been unable to accept that Japan had capitulated.

To many outsiders, Onoda looked like a fanatic. But in imperial Japan his actions were perfectly logical. Onoda had sworn never to surrender, to die for the emperor. He believed the rest of his countrymen, and women, would do the same.

Japan’s Internal Divide on WW II Surrender

Recognizing the Japanese strong allegiance to their homeland and their loyalty to the Emperor  exemplified by Lt. Onoda (who died in 2014), one can understand how difficult the decision to end the war was for Japan’s leaders.

The  internal political debate was intense. Whether Japan should accept  unconditional surrender or continue to fight is  reported in historian Martin  Gilbert’s book The Second World War.

At the very moment when the Nagasaki bomb exploded, the Japanese Supreme War Direction Council was meeting in Tokyo.  News of the bomb led to a renewed discussion as to whether Japan should accept unconditional surrender.  

The Council was evenly divided; three generals were for surrender, three for continuing the war.  The Foreign Minister, Shigenori Togo, cast his vote for surrender, as did the Prime Minister, Admiral Suzuki.  But the Minister of War, General Anami, was emphatic that there should be no surrender.  “It is far too early to say that the war is lost,” he told his colleagues, and he added:  “That we will inflict severe losses on the enemy when he invades Japan is certain, and is by no means impossible that we may be able to reverse the situation in our favour, pulling victory out of defeat.  Furthermore, our Army will not submit to demobilization.  And since they know they are not permitted to surrender, since they know that a fighting man who surrenders is liable to extremely heavy punishment, there is really no alternative for us but to continue the war.”  

The impasse was complete; but Togo and Suzuki were determined to end the war at once, and, in a secret meeting with Hirohito, prevailed upon him to summon a further meeting of the Supreme War Direction Council, and to preside over it himself.

The meeting took place shortly after midnight, in the Emperor’s underground bomb shelter.  First Suzuki read out the Potsdam Declaration.  Then, Togo urged its acceptance, provided that the position of the Emperor and the throne could be respected.  Suzuki supported Togo, General Anami opposed him.  For nearly two hours the discussion continued.  Then Hirohito spoke.  “Continuing the war,” he said, “can only result in the annihilation of the Japanese people and a prolongation of the suffering of all humanity.  It seems obvious that the nation is no longer able to wage war, and its ability to defend its own shores is doubtful.”

The time had come, Hirohito told the council, “to bear the unbearable”.  He therefore gave his sanction to Togo’s proposal that Japan should accept unconditional surrender.  The message to that effect, a formal acceptance of the Potsdam Declaration, was sent out from Tokyo, early on August 10, to the Japanese ambassadors in Switzerland and Sweden, for transmission to the Allies.

Is History Inevitable?

When an historical event is done, the outcome can seem almost inevitable.  In the use of the atomic bombs, there is an ongoing issue with the counter-factual argument that the US not have used the atomic weapons.

I believe the record of the internal political divisions and subsequent events such as the two above, suggest that this option was necessary.  That is not to dismiss the concerns about ever using atomic weapons again nor continue to learn from the aftermath.

I believe this event involved sober discussion and conflicting points of view by both the US and Japan’s leadership.  That is the point to remember today.  Few situations are without options, sometimes better ones, but not necessarily easier.

One of the most important questions any leader can ask in a crisis is what are my options? To describe choices by leaders as inevitable or dictated  by circumstance, takes away the agency and responsibility of those involved.   This is especially true when  the welfare of the whole is overridden by the self-interest of the few.

This acceptance of unalterable fate is a temptation the cooperative democratic system was designed to prevent.  But it hasn’t always worked that way.  Why?