The Bigger (Smaller) Picture

MegaBanks, Statin Drugs, China’s Coal, Imported Apples

Many of you may have heard the term "small is beautiful". It’s the title to a landmark book by E.F. Schumacher, first published in 1973. According to The Times Literary Supplement, Small Is Beautiful – Economics As If People Mattered, ranks among the 100 most influential books published over the past 60 years. The principles spelled out in this powerful commentary on modern economics has proven to be right on the mark.

Size Really Does Matter

While America’s largest banks are reeling from their relentless efforts to grow even larger (and after two decades of feverish takeovers), dozens of small local and regional banks throughout the U.S. remain financially sound. Many, in fact, have an A rating. Some of you may recall that, until the 1980’s, banks were prohibited by a combination of federal and state law from establishing branches across state lines. Despite its name Washington Mutual ceased being a mutual company in 1983, when it demutualized and became a public company. 25 years later - with 2,239 retail branches - WAMU became the largest bank failure in history…so far. (Citigroup is six times larger than WAMU!).

Growing too big too fast is all too common in this brave new world driven by stock performance, corporate takeovers and unbridled growth that ignores environment, ethics and common sense. Lipitor® first came on the market 12 years ago. Today it’s the #1 pharmaceutical, with annual sales of $15 billion. Add the rest of the brand name cholesterol/statin drugs, and the total approaches $30 billion! That adds up to $1 per day for every single American over age 50! While Lipitor’s health benefits have now come under scrutiny, the American Academy of Pediatricians recently recommended statin drugs for overweight children as young as 8! Conflicting stories abound. Make no mistake, it’s all about the money.

China, factory to the world, built over 200,000 megawatts of coal-fired power-plant capacity in 2006-2007, all with almost no pollution controls. For comparison, Great Britain has 75,000 megawatts in operation, built over a span of several decades.

75 percent of the apples sold in New York come from the West Coast or overseas, even though New York State produces far more apples than city residents consume. With world commerce grinding to a halt, at least for a short while, and our addiction to fossil fuels weighing on us in so many ways, the time has arrived to re-think our options.