Buck Higgs Closer to Becoming a Bank
By Robert Higgs • Saturday November 29, 2008 11:39 AM PST •
COVINGTON, LA. (Nov. 29) — Buck Higgs, a down-at-the-heels hobby farmer living four miles north of this small southeast Louisiana town, said today that he would seek a banking charter from New York State’s banking department, a key step in his effort to change his business model and attract deposits.
This action comes immediately after Goldman Sachs announced that it had won the same kind of charter in an “effort to change its investment banking model and gather deposits.” Two months earlier, Goldman, an investment bank, received permission from the Federal Reserve to become a bank holding company, thereby gaining access to funds being distributed by the U.S. Treasury under the Troubled Asset Relief Program (TARP), a scheme created to acquire “toxic assets” (i.e., assets whose market values had fallen substantially) from banks and other financial companies, but not used for the statutorily authorized purpose. Goldman received an allotment of $10 billion from the TARP.
Higgs told reporters that his hobby farm had fallen onto hard times during the past year. Although his operation was not highly leveraged—Higgs’s parents had reared him to steer clear of situations where he might be unable to pay his honest debts—he complained that the government’s ethanol subsidies had diverted so much corn into the faux-environmental boondoggle that the prices of poultry feed had gone sky high, greatly augmenting the losses he normally incurred on his birds. He therefore blamed Wall Street, reasoning that the ruling class operates as a coherent unit, and if the power elite was responsible for wrecking the country’s great financial institutions and shoving the losses onto the taxpayers, then the elite ought properly to be held accountable for his hobby-farming losses, as well.
Goldman’s acquisition of a state banking charter gives it the authority to conduct retail banking operations in some twenty-five states that have reciprocal agreements with New York, although it “will continue to focus on investment banking,” doing its business a shade more prudently than it has in the past few years—”go belly up twice, shame on us,” said a Goldman spokesperson.
Higgs expects to do business under the name Higgsbank (which he hopes will never be confused with Riggs Bank or associated in any way with the Bank of Credit and Commerce International, Clark Clifford, or the House of Saud), but hobby farming will continue to be his principal focus. “Financial shenanigans come and go,” said Higgs, “but chickens, ducks, and geese are forever. No matter how low the S&P 500 falls, I’ll still have fresh eggs to eat.”
Higgs declined to say whether he would apply to the TARP for bailout money, expressing concern that any hobby farmer who went on the government dole might create a stigma for other hobby farmers who have resolved to bear their usual losses without whining for the feds to save them from their own bad judgments and, to speak frankly, their sometimes cockeyed decisions.
Nevertheless, reporters who gathered at Higgs’s rundown property for his news conference quickly noticed a foul odor that did not seem to emanate from the chicken droppings. One insisted, “I smell a rat,” but others were unable to say exactly what the odor was, and, in particular, whether it had anything to do with Higgs’s unrevealed intention to use his bank for disreputable purposes.