Was George Bailey Just A Subprime Lender?

It’s A Wonderful Life is a heartwarming classic film — but it now seems to have wrecked our economy. Whoops!

Portfolio is taking another look at It’s a Wonderful Life and they’re wondering if the villain of the film — the cold sensible businessman, Mr. Potter, was right all along.

To figure out the answer, let’s take a look at the scene in which George Bailey and the leaders of the town, including Mr. Potter, discuss the fate of the Savings and Loan started by George’s father, Peter.

In it, Mr. Potter questions a loan given to a taxi driver to build a house. Mr. Potter says the bank turned down the loan because the taxi driver could not afford the house that he wanted to build — but the Savings and Loan approved it. He wants to know why. George Bailey defends the loan — saying that he inspected the man’s finances and could vouch for his character. Mr. Potter believes that loans should not be given out on the basis of character.

Mr. Potter: Friend of yours?

Bailey: Uh-huh.

Mr. Potter: You see? If you shoot pool with some employee here, you can come and borrow money. What does that get us? A discontented, lazy rabble instead of a thrifty working class. And all because a few starry-eyed dreamers like Peter Bailey stir them up and fill their heads with a lot of impossible ideas. Now, I say…

Bailey goes on to defend his father’s good intentions and explain that his father never made any money off these ill-advised loans, but that he did help people get out of slums. Then…

Bailey: … What did you say a moment ago? That people should wait and save their money before they even thought of a decent home? Wait? Wait for what? Until their children grow up and leave them? Until they’re so old and broken down that… do you know how long it takes a working man to save $5,000?

Portfolio says that they aren’t comparing idealistic George Bailey to Angelo Mozilo — but they are looking a little kinder on poor mean old Mr. Potter:

But consider this: Perhaps Mr. Potter wasn’t just a heartless Scrooge. Perhaps Mr. Potter, in the absence of sufficient regulatory oversight, was the one voice of sanity keeping the good people of Bedford Falls from over-leveraging themselves.

Perhaps, if we had all taken Mr. Potter a little bit more seriously, we wouldn’t be in this mess to begin with.


George Bailey, Subprime Lender [Portfolio]