Bank failures reflect badly on Colorado

Just as the penny-stock scandals reflected badly on Colorado's business community in the last decade of the 20th century, Colorado's bank failures in the first years of this century -- eight since 2008 -- will reflect badly on the state for some time to come.

You hear bankers in the state still complaining about over-regulation, but you don't hear many calls for crackdowns on the fast-money track records of the failed banks, or for reform of the wide-open-West, free-market philosophy that led to the failures.

In fact, whenever the state's political and business communities cross paths in the wake of such business scandals in Colorado, the word traditionally used is "mum."

The Denver Post's Aldo Svaldi has done some admirable reporting on the bank failures, documenting for instance that the eight banks that failed, between 2004 and 2008, averaged loan-growth rates of 900 percent, while the average of all U.S. banks' loan-growth rates was just 44 percent during that period. At 76.2 percent, all of Colorado's banks' loan-growth rates for the same four years also ran considerably higher than the national average.

Those figures show how fast leaders of the failed banks, and leaders of Colorado banks in general, were running and gunning during the free-market heyday for Colorado business during Gov. Bill Owens' administration. Neither of Owens' successors, Bill Ritter nor current Gov. John Hickenlooper,  have made any move to slow such unfettered risk taking, but to do so would offend the business community each has been dependent on for their election.

So don't expect much more response to Svaldi's reporting than continued "mum." I asked three prominent business figures in town to comment on my thesis for this piece -- that all of Colorado business bears some accountability for the business practices that led to the bank failures -- but none responded to my call.

One former banker told me he knew of several banks that laid off what they suspected were bad loans to some of the failed banks thinking that regulators would catch up with the banks eventually and the process would work itself out. It did. Svaldi has reported that the five banks that failed in Colorado this year will cost the Federal Deposit Insurance Corp. $1 billion.

If you recall, that's about how much Silverado Savings and Loan cost the federal government when it failed back in 1988, when I first came to Colorado. "Mum" never changes things anywhere. Speaking up and speaking out occasionally will. Let's hope Svaldi keeps on writing.

You may have noticed that I changed the name of my blog to The SchwabBlog. Nothing more has been changed about it, not its url address nor its tone. Hope you continue to enjoy.

Speed kills, change comes in good time

The local news today announces how change -- bipartisan and united for the common good -- is supposed to work in these United States.

"Ritter backs change in teacher appraisal," the Denver Post's banner headline reads. The story under it tells how the lame-duck governor has signed on to a bill in the legislature that would change the way Colorado teachers are being evaluated for tenure.

The bill is opposed by teachers' unions, of course. Change frightens everyone, especially on a political stage (witness the year-long fight for health-care reform in this country, the continued bank opposition to financial reform, Taliban assassinations of officials in Kandahar, Afghanistan).

But progress happens, and fear will not stop it.

Such is the secret of Obama rule in America today. The president doesn't back down from getting the most substantial health-care reform in the nation's history just because some people oppose it. That's leadership.

Obama pushes for and gets game-changing reform because the people of the nation want their lives and the lives of their children to change for the better. They are willing to suffer temporary pain if it means making progress on dozens of challenges that face the nation.

Colorado Gov. Bill Ritter chose not to run again for the very reason that he stepped into the public-school education debate going on right now in the legislature.

Without the political burden of having to appease teachers' unions, he can add his weight to the momentum of education reform which is favored by a majority of the people he governs.

Teachers need to be held accountable for their students' academic performance. If the students fail, their teachers have obviously failed; a teacher's livelihood ought to be affected by his or her success or failure in the classroom.

Obama has won on health care and he will win on financial reform because the time has come to make changes that improve the life of the republic. It takes time, political capital, real money, and a lot of hard work to affect real change in this country.

Speed kills, even in an Internet age. Life, politics, change and evolution go much slower. We must all remember to give each other the grace to change in our own time. The beauty in it all is that we have time to make the world a better place.

Bill Ritter for governor in 2010

Right here, right now, I'm endorsing Bill Ritter for re-election as governor.

The Republicans made me do it.

The news today, according to the banner headline across the front page of the Denver Post, is "United GOP targets Ritter."

And right below that headline the Post encapsulates the Colorado Republican Party's 2010 "Contract for Colorado," which leads off with the promise (I would call it a threat) to "Limit taxes and state spending."

As if the perennially Republican-defended Taxpayers Bill of Rights didn't already prohibitively limit Colorado's business growth and progress.

As if the perennial Republican criticism of Amendment 23, the only bulwark against legislative raids on public-school funding for the state, were not promise enough from their party that the children of Colorado can be ignored in order to uphold the wealth of the establishment.

No, none of that has been enough for Republicans in Colorado.

Now, they want to re-impose a "limited-government, no-government" regime on the state, apparently not satisfied with the deep hole the former Owens administration dug for Colorado through its frivolus spending on inefficient computers, its promotion of an Internet network that failed to deliver on its promises, its complete abrogation of public health programs and higher-education funding, and its total disregard for racial discrimination in state contracting.

That was once Colorado's contract with Republicans.

I, for one, would rather see Democrats in charge of making government mistakes.

At least they err on the side of ordinary people.

Norton's job is at stake

The parallels are not to be dismissed.

Kay Norton, president of the University of Northern Colorado, was trying to save her job Friday when she took to the press-conference podium and told reporters the investigation into UNC's reaction to male sexual-harassment allegations against a UNC theater professor would be as broad and deep as it could be.

"The University of Northern Colorado has placed no limits on the investigation," Norton said in a statement posted on the UNC website.

Her quick action is a response required by law of an employer facing an allegation of sex harassment made within the workplace -- in this case a student against a professor -- but more than that, her quickly going public is a reflex to the public humiliation and resignation of former University of Colorado president Betsy Hoffman five years ago.

When Hoffman delayed responding to charges her football team and coaches were using sex and alcohol to recruit teen graduates of high schools, then-Gov. Bill Owens publicly demanded a full-bore investigation, and then put more heat on Hoffman after Ward Churchill's "little Eichmanns" essay was made widely public. The governor's public actions in each instance were taken long after the fact of the offenses he held Hoffman accountable for.

Now, I'm not suggesting that now Gov. Bill Ritter call for Norton's resignation.

Politically, such a call would parallel Owens pressure on Hoffman. Owens was Republican; Hoffman considered somewhat liberal. Ritter is a Democrat; Norton took the UNC post during Owens' administration and her husband, Tom Norton, was director of the state highway department at the time.

And Norton is going public in part to cut short such retributive political action.

That's not only a smart move politically, but probably the best move in terms of UNC's reputation among institutions of higher learning.

Allegations regarding sexual behavior are now a most public event, especially when criminal charges or the possibility of criminal charges are imminent, and even more especially when public figures or public institutions are involved. Bill Clinton, the University of Colorado, Michael Jackson, South Carolina Gov. Mark Sanford ..., the list of celebrity media coverage goes on and on and on and on.

Norton has been a good president of UNC, by all accounts. Her actions regarding the current firestorm are the right actions, although her institution's behavior in the past may still be found at fault and Norton held accountable for it.

That would be the "right thing to do," no matter the outcome.

As Betsy Hoffman and so many others have found out during careers over the past decade, jobs are to be held for as long as one can hold them, doing the best you can do while you do hold them. But then the economy, a sex scandal, some mistake, or a change in political fortunes comes along to muck up your performance. And the job comes to an end.

As my mother would have said: Buck up and move on.

Save higher ed now, even if it is a Republican idea

Finally, a Republican-inspired headline in Colorado I can like! "CU slashes jobs, salaries," The Denver Post screamed Saturday.

The headline was inspired by University of Colorado President Bruce Benson, a Republican. Benson, anticipating like a good businessman should the funding shortfalls CU will face if the state's financial problems with higher education continue, announced budget cuts that will be inevitable once federal stimulus dollars finally get used up.

It's no shame to anticipate the worst of times when a business budgets for its future; and even though public education is a liberal and Democratic cause, the value of having a loyal opposition can be seen in Benson's businesslike attention to CU's money problems.

Now, if Benson holds true to Gov. Bill Ritter's predecessor's philosophy as governor, and maintains as low a tuition for in-state CU students as possible, Benson will have performed well in the footsteps of Bill Owens; and Colorado will be glad to thank both of them for their foresight.

This, perhaps, is the first time I can adequately explain my vote to endorse Bob Beauprez for governor over Bill Ritter way back when I was editor of ColoradoBiz magazine.

I thought then, and still think now, that Beauprez then was more qualified to be governor than Ritter, although I have to admit Gov. Ritter has done as good a job as anyone has a right to expect from a rather unexciting politician since his election.

Benson's budget cuts prove, as Beauprez did back during the 2006 race for chief executive of Colorado, that Republican-inspired frugality can be a good thing, even if Republican anti-tax philosophy is misguided -- no, ... make that insane.

Ritter signed a $17.9 billion budget bill on Friday, and, during the legislative session, did a good job negotiating toward a reasonable way to finance state government during the 2009-2010 fiscal year. "Just as families and businesses all across Colorado are doing, we made some very tough choices," Ritter was quoted by The Post as saying when he signed the legislation.

Making hard decisions is what Benson is doing as well. His actions may have some political side effects and overtones, but they also represent effective leadership in the face of dire circumstances, circumstances Ritter had promised business he would fix during his term.

Colorado higher education deserves a permanent fix of its money problems. So do Colorado college students.

"There's always next year" is no longer a face-saving slogan that can be used by the Denver Broncos or the Denver Nuggets. It seems it will always remain words to be invoked by a state lawmaker.

With the signing of the budget bill, however, next year is already here.

And once again voters may take to the polls to fix public higher education's problems in Colorado before elected officials gather up the gumption to do it themselves.

At least Bruce Benson is looking ahead.

As The Post put it: Benson couldn't "wait and hope everything will turn out OK."

Colorado's elected officials ought to follow his example.

Roar of the crowd saves Pinnacol money

Gov. Bill Ritter must have been listening to the crowd of anti-tax demonstrators outside his window when he pulled his administration away from taking the $500 million of Pinnacol Assurance surplus assets on the negotiating table for the state budget.

Ritter made clear that he doesn't want the state's institutions of higher education to suffer $300 million in cuts proposed by the Joint Budget Committee, but he ducked under the desk, as it were, when it came to taking the money from an employer favorite, Pinnacol.

It will be interesting to see if the governor will sign a bill that remains that would make clear Colorado state government controls Pinnacol surplus money, if indeed that law is passed by the legislature.

But in the meantime there are those anti-tax folks who were outside his window.

Democrats, progressives and liberals ought to take note of the crowd, which was estimated at more than 5,000 outside the Capitol. The Denver Post, the only major newspaper in town anymore, said the anti-tax "tea party" was one of a dozen held throughout Colorado and 750 reportedly held throughout the country. That kind of turnout cannot be ignored by incumbent politicians, even if their incumbency is as "young" as the Obama administration's.

What the rallies showed is conservatives -- from the now less-influential Christian right and Moral Majority, to the blathering talk show hosts who can still whip up a frenzy -- still hold power over some people, and the millions of voters who cast ballots for John McCain didn't lose their voices or their ability to make placards with Obama's election.

It was fun to read the Post's quote of demonstrator Bertha Holland from the rally. "It's pretty sad that I've lived 65 years and never had a reason before to protest something," Holland told the Post. But what is sad is that Holland never had the guts during 65 years of life to oppose her government on an issue before Wednesday.

Ritter is right to heed the demonstrators, and put the budget-balancing act on the backs of doctors and other less powerful special interests, like state employees, who are going to lose money in the budget deal no matter how it falls. He'd be wrong if he raises fees paid by the general public to the point they create their own opposition to his politics.

But balance is a critical skill for a politician.

Balancing on a razor's edge is dangerous, but always entertaining folly.