Category: Observations

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Lincoln’s Thanksgiving Proclamation

The national Thanksgiving holiday is a time of community and family gatherings.  Local 5K and 10K turkey trot fun-runs, watching Macy’s parade in NYC-or on TV, rivalry football games, black Friday retail sales, children traveling from school or work to go home, new editorial or historical opinions on the Pilgrims and native Americans, and of course the feasting.  Familiar recipes prepared once a year.  Everyone sitting around a common table  grateful for this pause in life’s hectic doings–just to be together.

Religious services are still offered which in the secular context of today’s Thanksgiving events recall the holiday’s roots.

It was Lincoln who issued an 1863 proclamation calling on Americans to “set apart and observe the last Thursday of November next as a day of thanksgiving,” partly to celebrate victories in the then-raging Civil War.

Lincoln’s action came  three months after Union Army victories at Gettysburg and Vicksburg, and at a time in which ultimate triumph appeared in sight.

Reading the words illustrates the power of belief in a time of civil conflict; and shared gratitude for the blessings of life.  A reminder of the “gracious gifts” that give the holiday its special meaning still today.

Washington, D.C.
October 3, 1863

By the President of the United States of America.

A Proclamation.

The year that is drawing towards its close, has been filled with the blessings of fruitful fields and healthful skies. To these bounties, which are so constantly enjoyed that we are prone to forget the source from which they come, others have been added, which are of so extraordinary a nature, that they cannot fail to penetrate and soften even the heart which is habitually insensible to the ever watchful providence of Almighty God.

In the midst of a civil war of unequalled magnitude and severity, which has sometimes seemed to foreign States to invite and to provoke their aggression, peace has been preserved with all nations, order has been maintained, the laws have been respected and obeyed, and harmony has prevailed everywhere except in the theatre of military conflict; while that theatre has been greatly contracted by the advancing armies and navies of the Union.

Needful diversions of wealth and of strength from the fields of peaceful industry to the national defence, have not arrested the plough, the shuttle or the ship; the axe has enlarged the borders of our settlements, and the mines, as well of iron and coal as of the precious metals, have yielded even more abundantly than heretofore.

Population has steadily increased, notwithstanding the waste that has been made in the camp, the siege and the battle-field; and the country, rejoicing in the consciousness of augmented strength and vigor, is permitted to expect continuance of years with large increase of freedom.

No human counsel hath devised nor hath any mortal hand worked out these great things. They are the gracious gifts of the Most High God, who, while dealing with us in anger for our sins, hath nevertheless remembered mercy. It has seemed to me fit and proper that they should be solemnly, reverently and gratefully acknowledged as with one heart and one voice by the whole American People.

I do therefore invite my fellow citizens in every part of the United States, and also those who are at sea and those who are sojourning in foreign lands, to set apart and observe the last Thursday of November next, as a day of Thanksgiving and Praise to our beneficent Father who dwelleth in the Heavens.

And I recommend to them that while offering up the ascriptions justly due to Him for such singular deliverances and blessings, they do also, with humble penitence for our national perverseness and disobedience, commend to His tender care all those who have become widows, orphans, mourners or sufferers in the lamentable civil strife in which we are unavoidably engaged, and fervently implore the interposition of the Almighty Hand to heal the wounds of the nation and to restore it as soon as may be consistent with the Divine purposes to the full enjoyment of peace, harmony, tranquillity and Union.

In testimony whereof, I have hereunto set my hand and caused the Seal of the United States to be affixed.

Done at the City of Washington, this Third day of October, in the year of our Lord one thousand eight hundred and sixty-three, and of the Independence of the United States the Eighty-eighth.

By the President: Abraham Lincoln

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The Changing Seasons

Temperature fell to 34 degrees last night.

A Gerber Daisy, the last flower of summer.

Camelia, the first flowers of fall.

Finished putting 5 allium, 15 tulips, 25 crocus and numerous hyacinth bulbs until the rain came.  Still over a 100 tulips and daffodils to plant before the first freeze.

 

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How People in Power Make Mistakes

From Scott Galloway:

“The undoing of many powerful people is that they enter a hermetically sealed bubble of fake friends. Enablers, not people concerned with their well-being. When the Elon-Twitter debacle started this spring, I wrote a post about power.

“My thesis: Power, unchecked, is a psychological intoxicant. OK, this isn’t so much a thesis, as it’s scientifically proven. Research shows power causes us to downplay potential risk, magnify potential rewards, and act more precipitously on our instincts. In other words, you lose your ability to self-regulate; you need others to do it for you. . .”

The solution: Every day, every one of us needs to ask ourselves an important question: Who keeps it real for me? Who will push back, who will tell me I’m wrong … who will save me from myself and the psychosis that’s led to so many successful people’s fall from grace. ”

Example: Ed Callahan had Bucky Sebastian as his “wingman” in work and life.

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On Failing Retirement

At a recent class reunion, one of my peers admitted to “failing retirement.”  His projects and interests kept him busier than a full time prior job.

It reminded me of this story:

An old physician, Doctor Gordon Geezer, became very bored in retirement and decided to re-open a medical clinic.


He put a sign up outside that said: “Dr. Geezer’s clinic. Get your
treatment for $500 – if not cured, get back $1,000.
“Doctor Digger Young, who was positive that this old geezer didn’t know beans about medicine, thought this would be a great opportunity to get $1,000. So he went to Dr. Geezer’s clinic.Dr. Young: “Dr. Geezer, I have lost all taste in my mouth. Can you please help me?”

Dr. Geezer: “Nurse, please bring medicine from  box 22 and put 3 drops in Dr.Young’s mouth.”

Dr Young: ‘Aaagh! — This is gasoline!”

Dr. Geezer: “Congratulations!

You’ve got your taste back. That will be $500.”

Dr. Young gets annoyed and goes back after a couple of days figuring to recover his money.

Dr. Young: “I have lost my memory, I cannot remember anything.”

Dr. Geezer: “Nurse, please bring medicine from  box 22 and put 3 drops in the patient’s mouth.”

Dr. Young: “Oh, no you don’t — that’s gasoline!”

Dr. Geezer: “Congratulations! You’ve got your memory back. That will be  $500.”

Dr. Young (after having lost $1000) leaves angrily and comes back after several more days.

Dr. Young: “My eyesight has become weak — I can hardly see anything!”

Dr. Geezer: “Well, I don’t have any medicine for that so, “Here’s your $1000 back” (giving him a $10 bill).

Dr. Young: “But this is only $10!”

Dr. Geezer: “Congratulations! You got your vision back! That will be $500.”

*Moral of story* — Just because you’re “Young” doesn’t mean that you can outsmart an “old Geezer”

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An Old Tale, Updated for Credit Unions

Down On The Farm…?

(by Jim Blaine)

George Orwell masterfully described the erosion of values and the rise of exploitation in his classic novel Animal Farm. The book written in 1945 is a satire of the decline in the Russian Revolution from idealism to the overlord State of Stalinism. To Orwell, what the Revolution had become in post-WWII Russia bore little resemblance to the high hopes of 1917.

In case you’ve forgotten the plot; in Animal Farm the slothful, tyrannical human proprietor of Manor Farm is overthrown by his much abused and neglected farm animals. The revolutionary animals quickly come to realize that when united in cooperative effort, they are quite capable of sensibly managing the farm and their own affairs. 


Each animal, by nature and design, has different capabilities and unique qualities. Separately they are weak. But, cooperatively, working together; the united effort becomes far greater than the sum of the individual parts. Each animal contributes in full measure, in its own special way, to the overall success of the enterprise. 

The cows and chickens provide milk and eggs for food. The sheep provide wool for cloth; the dogs provide protection; and the horses provide strength for plowing. The pigs, who seem to be the brightest, provide direction and management (surprise, surprise!).

Every civilized society, every social movement, every cooperative effort needs and creates a set of guiding principles – a social compact, a credo, a charter which explains shared beliefs and values. The animals of Animal Farm were no different. They carefully crafted rules for their new social order and painted them on the side of a barn for all to see.  

                  ORIGINAL PRINCIPLES:
 
 1. Whatever goes upon two legs is an enemy.
 2. Whatever goes upon four legs, or has wings, is a friend.
 3. No animal shall wear clothes.
 4. No animal shall sleep in a bed.
 5. No animal shall drink alcohol.
 6. No animal shall kill any other animal.
 7. All animals are equal.

Over time, several incidents occurred which seemed to be out of keeping with those original purposes. The pigs were found sleeping in the former owner’s bed; alcohol reappeared at social gatherings of the pigs; an animal who complained about the changing values was killed; and the pigs seemed to be working less and consuming more than their fair share. 

When the animals returned to the barn to review their original principles; they found, much to their surprise, that those principles somehow had evolved into something a bit different!

“EVOLVING” PRINCIPLES:
 
1. Whatever goes upon two legs is an enemy.
2. Whatever goes upon four legs, or has wings, is a friend.
3. No animal shall wear clothes.
4. No animal shall sleep in a bed with sheets.
5. No animal shall drink alcohol to excess.
6. No animal shall kill any other animal without cause.
7. All animals are equal, but some animals are more equal than others.

The pigs, however, were always there to explain away questions, concerns and objections. Bad became worse at Animal Farm! Eventually, when the animals returned to the barn, they found a whitewashed wall with just one remaining principle.

“CURRENT” PRINCIPLES?

“All members are equal, but some members are more equal than others.”

“Isn’t that what we originally revolted against?,” some quietly asked.

So, what’s the point? In the beginning, there were several essential ideas which formed the core values of the credit union movement: one member, one vote; cooperative; non-profit; equal service to each member; consumer advocacy; volunteer leadership; unstandard answers; shared concerns; us not me. 

 Have you checked the barn lately?    
 
When did we abandon the average man and woman – the working class; change our focus to the primacy of the bottom line; lower ourselves to worshipping before the false altar of market share; begin acting in the best interest of “the credit union” – not the members !?!; and start offering excuses rather than solutions?

Hey really, what happened…   

Who let the pigs in?



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A CEO’s Outlook at mid-October

On a recent trip I talked with a CEO to find out how the credit union was responding to four events:  Covid, interest rate hikes, liquidity and the regulatory environment.  Here are my notes.

On Covid

CU still on hybrid work model.  Employer sponsor went all remote, but is now back in person, with little remote.  The community around the head office, especially retail shops, became a ghost town.  Kept all branches open, but  back office staff is still mostly remote.

Expect hybrid work to continue. Commute for head office is a minimum of 30-60 minutes. Labor market extremely tight especially for retail.

Have re-evaluated every customer facing position including  salaries, variable incentives, paid lunches and increased job tiers.

Interest Rates

The 30-year fixed rate mortgage is now at 7.5%.  Member interest has evaporated and don’t see it coming back until late 2023.  Increase in second mortgage demand.

Member spending is still strong and credit card volume has surpassed pre-pandemic levels.  Will recession hurt consumer spending?   Labor market great for employee, but creates inequities with current staff.

Biggest concern is inflation’s impact on costs and operating expense structure.   Large increases in vendor contracts which have the ability to pass through costs based on  a CPI index.   In some cases this will be 8.5% to as high as 15%.  Fortunately, we have caps in our contracts but many credit unions do not.

We are a unionized shop with approximately 70% of employees covered under a labor contract.  Sponsor negotiates contract and we will have to see what happens to those costs.

Liquidity

Have difficulty selling to secondary market.  Rates are extremely volatile day to day.  Our mortgage pipeline is down 60%.  Refinancing has all but stopped.

In ’20 and ’21 had share growth of 20% and 13%.  Money stayed with us.  This year members feel it’s time to spend.  Grown only 2% in shares so far, but may end up flat at the end of the year.

Even though originations are lower, loans are staying on the balance sheet because there is no refinancing.

Paying up for CD’s:  11 month at 3.25% and 15 month at 3.5% with a minimum of $5,000.

Actively monitoring our wholesale funding sources.  FHLB is about 100 basis points more expensive than CD’s.  Also have brokered CD’s with SimpliCD.

So far this year ROA is at 80 basis points down from 92 bps in 2021.   But for our 28 state peers over $500 million, the average is closer to 50 basis points.

Our top operational priority will  be managing expenses.

Regulatory Environment

State chartered.  All exams remote.  The beginning of the year I was really concerned about the NEV test that would put us in the extreme risk category.  But they have backed off with just a “high” rating.

Definitely a different level of NEV risk now and more pressure on liquidity.

Looking past current events there are two items.   Should we move beyond our sponsor’s brand and FOM to open up markets for further growth?   We have several special loan programs, credit card  and provide financial literacy events.  Sponsor brand is ours as well. So not a simple issue.

Secondly, we have always been a state charter; would a federal charter be an option for the future?

However our biggest challenge going forward is to control operating costs.

 

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A 60-Year High School Reunion

The first question in many gatherings is, where are you from?

I answer Springfield, Illinois which is where I finished high school 60 years ago.  The class gathered again this past week, the first time since the 50th reunion.

The experience is truly a re-union. I was able to interact  with the city, the school and classmates. The event reconnected past recollections and the present.  The impressions may even continue to shape the future for some or all.

Michael De Sapio has written about the importance one’s local community:

We spend much of our time concerning ourselves with places and people far removed from us. The things closest to us, by contrast, often become negligible and disposable. If you make an effort to reconnect with your neighborhood, town, and community, you may come to see your home in a new light—hallowed by time and … and history, and perhaps even imbued with heroism or romance.

Reunions  remind attendees of the influence of the place we once, or maybe still, call home. It  made a difference in who we are today.

The State Capital and Land of Lincoln

Abraham Lincoln defines Springfield’s soul.  On February 11, 1861 he delivered a farewell address to his fellow residents. He would never return.   His parting words are remembered for their emotional honesty.  They illustrate his debt to a place that helped shape who he was.

My friends, no one, not in my situation, can appreciate my feeling of sadness at this parting. To this place, and the kindness of these people, I owe everything. Here I have lived a quarter of a century, and have passed from a young to an old man. Here my children have been born, and one is buried. I now leave, not knowing when, or whether ever, I may return. . .

Springfield is flat, except for the meandering of Lake Springfield at the outer edge.  The sky and corn or wheat/hay  fields on the way seem to stretch to an endless horizon.

The city’s topography is a geometric with one-way streets to facilitate traffic.  But there are few cars, even in rush hour.  Downtown is dominated by buildings whose former lives are now lost in their current role as state office buildings.  Vacant lots are paved over for parking; but we never saw a lot filled.

(Capital spire and former State Armory)

The city is so level that sounds travel great distance.   Amtrak and freight trains still run through the center of town along 4th Street, day and night.   The doppler effect of train whistles’ signals this constant coming and going.

We were stopped at a railway crossing for a freight train consisting of only flatbeds carrying  one or two shipping containers.  I counted a freight car passing every second.  The gates were down for over five minutes.  And there was even a second engine in the middle of the train for more power.  The train extended for at least three miles.

There is a church bell in the center of town that sounds every 15 minutes and strikes the hour.   This passing of time is heard throughout the downtown.

The capital building dominates the skyline.  Empty lots, some still grass but most paved over, were meant to accommodate people driving to work.  But the legislature is out of session.  The elected representatives and lobbyists have gone.   Offices are quiet and often closed.  The town seems empty even on a work day.   Is this the mirror side of working from home?

Sixty years ago Springfield was a manufacturing and business center, as well as the state capital.  Allis Chalmers and Sangamo Electric had manufacturing plants.  Franklin Life and Horace Mann had their corporate insurance headquarters near the city center.   Frank Lloyd Wright designed a prairie style home  in the same area.

Today state government and the service sectors dominate.   A modern downtown brick constructed Methodist church is now the office of the Springfield Chamber of Commerce, complete with steeple. The state capital is across the street.

Tourists trace Lincoln’s legacy beginning with the two blocks reconstructed as they existed in 1860 around his home.  The Old State Capital and new Presidential museum and library are major draws.

Health care and new community and college campuses  are additions to the city’s evolving economy.

The density and intensity that is characteristic of larger cities is absent in Springfield.

The pace feels more akin to farming than to the modern workday culture.   Saturday’s farmer’s market  in downtown was the most crowds we experienced.   Lots of younger people were here as well, both shopping and making a living.  Every stall is carefully ordered in its presentation, except for water color paintings.

Amongst these  every day events, there is a feeling of something more consequential about the town.   Lincoln’s heritage is central. The spirit of the place which formed him still animates today.  Patient and timeless lessons seem to grow in this center  of flatland farms of corn and endless, open sky.

The Springfield poet Vachel Lindsay referenced this spirit in his 1914 poem Abraham Lincoln Walks at Midnight.  Both the sense of place and Lincoln’s profound insights seem timeless, especially relevant to today’s events.

It is portentous, and a thing of state

That here at midnight, in our little town

A mourning figure walks, and will not rest,

Near the old court-house pacing up and down. . .

A bronzed, lank man! His suit of ancient black,

A famous high top-hat and plain worn shawl

Make him the quaint great figure that men love,

The prairie-lawyer, master of us all. . .

His head is bowed. He thinks on men and kings.

Yea, when the sick world cries, how can he sleep?

Too many peasants fight, they know not why,

Too many homesteads in black terror weep. . .

He cannot rest until a spirit-dawn

Shall come;—the shining hope of Europe free;

The league of sober folk, the Workers’ Earth,

Bringing long peace to Cornland, Alp and Sea.

This reunion  reconnected us with a  momentary phase of our lives.  Springfield’s special history sits amidst an ever evolving  generation of  new enterprises. Revisiting  our one-time home sparked new insights.  A place alive with past and present activities busily weaving a new future.

In later blogs I will share how my high school has changed, yet still remains the same, and impressions from former classmates.