Mountain resort communities like those in the Sun Valley area have had a front row seat on the national financial tragedy that's unfolded over two years.
For years, the dramatic plot developed by those inimitable Wall Street screenwriters played in our towns like a silent black-and-white movie running behind the full color of bustling Main Streets.
Growing numbers of people in skilled trades built growing numbers of second homes and commercial buildings. Where only handfuls had existed before, banks and mortgage and real estate companies multiplied. Development and zoning issues occupied local officials.
People who weren't playing "flip it" in the real estate market looked like fools to forgo making money in their sleep as property values soared higher every year, and sometimes every month. Loans were easy to get and nearly every financial professional in the nation acted as if he or she believed that because housing markets had not crashed all at once everywhere in the U.S. for the previous 60 years it wouldn't happen.
Bank and securities regulators went missing. Whistleblowers were dismissed as cranks.
When First Bank of Idaho failed last year, residents were aghast. It was a painful scene of the folly of weak regulation.
A new report criticizes the federal Office of Thrift Supervision for not cracking down on the risky loan practices that led to the bank's demise. The problem, we know now, was that the absence of government regulation was the norm, not the exception.
For lack of regulation of financial markets and mortgages, for lack of trust in common sense and for refusing to learn the lessons of the Great Depression, resort communities have paid and are paying dearly. Businesses have toppled. People have lost homes and livelihoods. Others are just barely hanging on.
Yet judging by the testimony of Goldman Sachs executives before Congress this week, the devastation wrought on ordinary people by unfettered and utterly corrupt financial markets hasn't sunk in at the highest levels of Wall Street.
The execs said buyers of mortgage-backed securities should have researched them and shouldn't have relied on brokers. True enough, except for the fact that even the best financial minds in the world were so besotted with profit that they didn't know what they were doing.
Today, alas, the trite is true.
If it's too good to be true, it's false. There's no free lunch. What goes up must come down. Never say never. The bigger they are, the harder they fall. A penny saved is a penny earned—unless it's invested in a con game.
