Bank of America: Challenges and Expecations
Economic ups and downs are natural phenomena in today’s society. Specifically, American consumers want a good life financed by credit. The American way is, "live today, pay tomorrow". Over the years, America’s obsession for living above their means grew, even if their incomes didn’t, as revealed by the U.S. 2004 Census. A preferred standard of living and feeling of entitlement is what has dominated U.S. consumer spending habits over the last few decades. “This mentality worked so well in the 1960's and 1970's, when there were high-paying jobs, but failed miserably in the 21st century. Inability of the bulk of the U.S. population to change its mentality and live sensibly has resulted in expensive purchases that were not backed by economic realities. Lenders have helped fuel the public mentality by providing easy credit. Anyone who wanted to buy an expensive car or a mansion was a precious customer. To further boost profits, financiers engaged in risky business deals and did not keep enough cash reserves.” (lucidpages.com). This credit driven economy was unsustainable and became daily practice by business, banks and government which as a result has led to the financial meltdown that we are still experiencing today. Financial institutions, specifically Bank of America, engaged in predatory lending practices, poor acquisitions with Countrywide and Merrill Lynch, and faulty balance sheet management in which have all contributed to the collapse of the U.S. economy. Not to mention, corporate greed, the increase in financial hits on their customers and the fact that they are against any federal legislation that would help Americans avoid foreclosure all provide reasons as to why Bank of America is bad for America.
The 1998 $48.7 billion merger between Bank America Corp and NationsBank created the Bank of America Corp. This