It is expected that Corsair Capital, a New York based private equity group will sign a deal with National City today that will affect Germantown.  You've guessed by now, if you're a regular reader, that the effect is to keep our newest bank name, National City Bank, in Germantown, at least for the foreseeable future.  Corsair and some other individual investors will put around $6 billion into National City at a share price of some $5.00.

We earlier traced the evolution from St. Francis Bank to Mid America Bank to National City Bank in the first Blog that discussed the plight of National City.  It's shares closed at $8.33 on Friday and that marked a 52 week decline in value of 78%.

So, it appears that my friendly, efficient bankers in Germantown will continue to be there when I need them.  I'm happy for them and for me and the rest of their customers.  Changing banks is a nuisance.  If there are direct deposits, those must be changed.  If there are automatic withdrawls, those must be changed.  New checks and bank cards must be obtained, and decisions as to which of the numerous accounts offered is the right account need to be made.  If Internet banking is involved, there is another level of change, and if telephone banking is involved, yet another level.

We sometimes are oblivious to the things that happen on Wall Street and the world but many of those distant happenings directly involve us in one or another ways.  This whole subject has been one that most of us has not followed...and yet it has an impact on our nice little village.  Our economy has truly become a global economy whether for the better or not.  IBM sold its laptop computer business to a company in China.  The Jaguar and Range Rover nameplates are now owned by a company in India.  GM is building a new engine plant in Brazil.  Medical x-rays are read off shore.  When the Far East markets hiccup, Wall Street flinches.  The demand for gasoline and diesel fuel in India and China have thrown our prices into a seemingly unending upward spiral.

Perhaps more important, these changes have occurred in a relatively short span of time..in decades rather than centuries.

Our politicians are dancing along merrily plotting to see just how they can use your money and mine to reward less-than-desirable behavior.  They have forgotten, if ever they knew, that when we reward bad behavior, we get more bad behavior.  On the other hand, if we permit some kind of 'pain' to follow poor decisions, we tend to see modified behavior.

What has this to do with the sub-prime mortgage debacle?  Plenty!

First, our government swooped in to help save the mortgage bankers that had encouraged this irrational activity given the lax oversight of federal agencies.  And, it continues down that same path.  What lesson will be learned from this?  Simple: we can continue to do stupid things with money because the government will bail us out just like always.

Second, the politicians fell all over themselves to earn 'points' (also known as votes) from the people who had over-extended and gotten themselves into this mess voluntarily.

What will be learned when a couple earning less than necessary to support the payments, is 'given' a mortgage loan using the adjustable rate feature in spite of credit scoring?  And who, when the rates went up, were given a 'pass' on the deal?  The lesson being taken away when there is no 'pain' associated with the decision is this:  it's okay to do things like this because the government won't let us hurt ourselves!

The answer is that each of us has to pay the price for our decisions.  If we are not forced to pay a price, we will repeat the same behavior or worse.  We can all remember that 'little urchin' in the neighborhood who could do no wrong in the eyes of his or her parents.  They were the worst little kids in the neighborhood.  We can probably each remember how we 'got away' with something, and we can likely remember just how that experience tempted us to continue doing whatever it was that we had 'gotten away with'.

Why is it that politicians think the way too many of them do in these situations?  Because, if they can succeed in getting the majority to think like this, they will have achieved their goal.  What is that goal?  The goal is to get the majority to believe that without big government involved in every decision we take in our daily lives, even if we hurt ourselves, it doesn't matter; it doesn't matter because big government is there looking out for our best interests. 

This is a decidedly liberal point of view.  We don't often hear conservatives espousing this kind of action.  The solution to this 'slippery slope' mentality seems obvious to me: elect conservatives and re-elect other conservatives if the first group loses sight of reality from having been in office in Germantown, West Bend, Madison or Washington for too many terms.  This is how we influence the direction of our community, our county. our state and our country in a representative form of government!

Our ignoring such problems is how the politicians who want the 'nanny' state to evolve past the tipping point get that to happen.  And it will happen at the rate our country is moving down that pathway.  Once it happens, there will be no turning back.

Maybe bold is a bit overdramatic; these things are almost certainly going to occur during the next twelve months...and probably during the next twelve months after that.

HEALTHCARE COSTS CONTINUE TO RISE...Of course that will happen as it has been happening for a long, long time now. 

We'll know what our healthcare delivery landscape will look like as we move through 2008.  We will be in the process of building too many facilities and that will ultimately drive costs up at an even greater pace.  We'll see the consolidation wave cresting and then we'll effectively have a couple of behemoths.  And that will ultimately drive health care costs up at an even greater pace.  We'll have continuing debate over the governmental control of our healthcare; and that holds within it forebodings for us all if we take the seemingly 'easy' pathway to universal coverage.  Government will continue to blame health insurance companies while it meddles in the free marketplace to the detriment of us all.  Will we be able to work our way through this coming year in healthcare?

TAXES WILL CONTINUE INCREASING...Again, of course this will happen as surely as the sun rises in the morning.

Our governmental bodies from village to state to federal continue to spend at a pace that simply cannot be sustained without damaging the economy.  Programs once instituted never die.  If funding channels go away (read cigarette taxes), the programs are simply shifted to using 'general purpose funds'.  And, as if the idea of never killing off useless tax-funded programs isn't bad enough by itself, our various government bodies add new tax-funded programs willy-nilly.  Our state budget just approved carries with it unfunded future obligations of something in the range of a billion dollars for the next biennium.  Our federal budget carries within it the same type of mischief.  Our politicos are absolutely addicted to 'earmarks' and those infect state budgets as well as federal budgets.

EDUCATION WILL CONTINUE TO BE DEBATED...And this, too, is a virtual given.

The primary state teacher's union, WEAC, has still not extracted its payback for the massive support provided to the Governor and many elected representatives.  Look for the QEO provision to be attacked and possibly thrown out if Democrats gain control of the Assembly in addition to the Senate and Governor's mansion.  Milwaukee's system will continue to move in precisely the wrong direction so far as numbers of graduates, test scores and almost every other measurable area.  Germantown's petition to move from MATC to another technical college district will be heard by the state technical college board, and only a miracle will see that petition granted.  We will have been accorded our 'due process' but come to realize that appointed boards do not provide 'due process'.  Virtual schooling will continue to be assailed by the teachers' unions...even though union member teachers are employed in those programs.  Why you ask?  Competition seems to be a great idea in everything but education, where the establishment simply cannot tolerate the possibility that we'll come to realize the king has no clothes.  There will be more referenda, and those that are properly presented will be voted on their merits from the electorates' perspective.  'Properly presented' means that the referenda are scheduled during an existing election, and not on some obscure date calculated to bring out only the 'right' voters.  'Properly presented' means that teachers and administrators are not employing taxpayer money to make their case, and that all the facts are presented well in advance to permit reasoned public debate.

ELECTIONS WILL DETERMINE THE WILL OF THE PEOPLE...And that is truly the hallmark of our country.

Our state government will be re-shaped and a Democrat sweep, should that occur, will virtually assure the we'll have universal health care called 'Healthy Wisconsin Two', higher taxes across the board, and fewer freedoms as government sucks up more of the available air.  We'll have more tax and spend programs that will take on lives of their own, and conservatives will trudge through the political wilderness for another decade or two.  Our Governor, who promised this would be his last term, has apparently decided that we need him for another term of four years.  Of course we expected that since other promises like 'no tax increases' have been conveniently forgotten, as well.

The federal scene holds a similar scenario.  People will need to evolve beyond the still-controversial 'hanging chad' feelings.  There was no Supreme Court fiat involved in the Florida race; that was a contrived attempt by the loser to fan the flames and get into office because he 'deserved it'.  So, he then went on to exploit the 'global warming' thing instead, while emitting more pollution that a thousand or more normal folks.  We'll have a new President-Elect by year-end.  The Iraq war seems to be less and less an issue as the press finally tells a more positive story...that has been going on for much longer than has been told.  The attempt to convince people that we're in a recession seems to be failing, but Congress still tries to make that happen with tax legislation.  For the first time since 1952, we have a wide-open race on both sides of the aisle.  What will happen if a strong third party candidate 'suddenly' emerges...like the 'sudden' emergence of Mayor Bloomberg of New York (as has been rumored for months now)?  That will throw everything into the proverbial 'cocked hat' on both the Democrat and Republican sides.  Yet another reason why congressional seats are so important.

2008 promises to be a very exciting and rewarding year, just as all the other years I remember have held great promise coupled with the aura of excitement...if we can but sieze those opportunities.

May you and yours enjoy a most healthy, happy and prosperous 2008...no matter your politics!