Twenty-Two Banks, But Not One Comic Book Shop! What's Wrong with this Country?

As you may have heard, we here in the U.S. have a small problem with our banking institutions. Apparently, all of them decided to give away money to any moron with a pulse (and probably a few who didn’t), and now there seems to be a little difficulty in recouping that cash. Now no one can borrow money, so no one can run a business … or something like that. I’m a little unclear as to exactly why this is a catastrophe … they just tell me that it is.

I'm not going to get into which method of addressing this problem is correct, as I have become grossly disillusioned and disinterested with politics in general and political debate specifically. Moreover, I’m not going to try to delve in any way into these expansive macroeconomic analyses as to the cause of this problem. I'm not an economist by any means, and my small exposure to the subject generally leaves me with the impression that economists are along the same line as meteorologists: they can accurately predict the future … sometimes … maybe … unless they're wrong … which means an unforeseen change in the variables happened.

One particular item of note, however, has occurred to me: the insane proliferation of bank branches. I have had exactly 3 jobs since college, and have worked at a total of 6 offices during that run. At those 6 offices, 4 of them were located in bank buildings, and a fifth one (the Louisiana Highway Department) had a credit union branch in the lobby. Moreover, none of these buildings had the same bank in them, and one actually switched banks while I worked there. In summary, I've worked in the same building as 6 completely different banks in my short ten-year career.

Next time you have to drive to work, the grocery store, or church, I’d like you to conduct a little experiment: count the number of banks. We never realize how many banks per mile there are out there, but they're EVERYWHERE! Many of you probably work in a bank building, or adjacent to one. On my 24 mile drive home, I identified 22 different branches, and only 7 of those were from the same banking institution. That’s right, I managed to drive past 15 completely independent banking institutions on a random drive!

Could we possibly need this many banks, and this many branches? Why is there a bank in seemingly EVERY office building? Why can I rattle off 20 different banks without even thinking about it? Hey, I’m all about competition, but can the market really support that many companies? (Given the current crisis – apparently not!)

True, it's convenient to have a bank on every corner, but bank branches aren't free. Every branch requires overhead for the building, utilities, personnel, security, etc. When did we decide that we must have a bank within 20 feet of us at any given time?

Who even needs that much access to cash? This past month, I had roughly $3 in my wallet for about 3 straight weeks. Was I destitute? Was I unable to buy gas, groceries, or lunch? Of course not! Every place in this country takes some form of credit card, and if they don’t, an ATM is always around. My paycheck comes in direct deposit as well, so I don’t even need to run to the bank to drop it off. In all honesty, I may need to make a trip to my bank 4 times a year. Do they really need 18 buildings within a 2-mile radius for that little use?

Maybe this is just a minute element in the overall, big picture. Maybe I just don’t get it, and banks really do make money by having all these branches. It seems to me, though, that until I stop seeing 37 banks per city block, it’s difficult to convince me that these companies are in as dire a condition as they appear.

Until next time,
The Jim