When Stories Collide
Written by 60 Minutes producer Henry Schuster.
"There are three kinds of lies. Lies, damned lies and statistics." That was one of Mark Twain's aphorisms, which he borrowed from British politician Benjamin Disraeli.
If either gentleman was with us the last two weeks, he might change that to three kinds of truth: truth, painful truth and statistics.
As we shivered outside in a south Chicago parking lot, late on a Friday afternoon, inside the Heritage Community Bank, employees were getting an unwelcome message from two FDIC officials.
The bank was had just been shut down by state regulators, a victim of its own poor lending practices. Truth. They might not have jobs after the weekend. Painful truth. This was the 15th bank to close this year. Statistics.
A week and a day later, we were standing outside Ben Bernanke's childhood in Dillon, S.C., with the Federal Reserve Board chairman.
The national guardsman who had bought the house wasn't able to make the payments. Truth. He lost the house in foreclosure just a few months ago and new owners had bought it. Painful truth. This took place in a town where unemployment is 14 percent. Statistics.
We usually try to do our stories sequentially. But after working on both these stories for months, they ended up overlapping and were on the air a week apart. Taken together, they were a reminder of the painful truth of statistics.
We were awash in statistics. I don't think I've worked this hard at the numbers since I studied economics far too many years ago (I even found myself reading a guide to the Fed that I last read for a class when I was 20; much has changed since then). There is the Fed's balance sheet. And its annual report. Multitudes of speeches and testimony, which just aren't written in a language meant to be understood by the rest of us.
There were bank balance sheets; FDIC reports; regulatory reports; and such arcane things as Prompt Corrective Actions. We studied CAMEL ratings and Texas ratios (two ways of measuring the health of banks). We learned about TALF; TAF: TARP; TLGP: ALGP: MMIFF; and the rest of the alphabet soup of programs. And when we found there was no central record of just how much money the Fed, Treasury and the FDIC were spending or had committed to spend on helping financial institutions, we did our own timeline and balance sheet (no surprise, it is larger than you thought).
Such is the stuff of television. You have to do all that before you can be waiting with your cameras outside the bank. Or in Dillon, S.C.
But once we got out there, we saw the truths, and the especially painful truths, behind all those statistics.
It wasn't just the folks who had worked at Heritage Community Bank facing an uncertain future - it was the folks who showed up the next morning worried whether their deposits were safe. They were okay but they still wanted reassurance. The way this bank closing took place, no depositor lost money whether they were insured or not, because another company called MB Financial bought all the deposits.
It is a great statistic that no one has lost a dime off any insured deposit since the FDIC was founded. But it is a painful truth that a lot of folks have lost a lot of money when their deposits weren't insured. I've heard that from people who used to bank at IndyMac, which was shut down last year and then run by the FDIC because no one wanted to buy it.
We spent some time roaming the beautiful halls of the Federal Reserve headquarters in Washington. It is a lovely building, inside and out. They were kind enough to let us bring our cameras inside and take some amazing pictures.
You can let those pictures you into thinking the statistics don't hurt. But if you're the Fed chairman and you come from a place like Dillon, S.C., then you know better.
If you are an FDIC employee, walking in on a bank on a Friday night, and you've been in their shoes because you used to work for a bank before it failed and you went to work for the government, you know better.
Or if you are a journalist, who is lucky enough to work for 60 Minutes, but has friends who are being laid off on what seems like a constant basis, you know better.
These are statistics, yes. But they are neither lies nor damned lies. They are truth and painful truth.
Watch Henry Schuster's segments on Ben Bernanke and the FDIC below:
The Chairman Part 1:
The Chairman Part 2:
Your Bank Has Failed:
Written by Henry Schuster