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Ryokurin t1_jbxlw2m wrote

https://abcnews.go.com/Business/story?id=7505042&page=1

This article explains why it was so bad in Georgia. TLDR: Until 1996, a bank couldn't open branches across county lines and there's 159 counties in the state, so there were a lot of banks. And three of the top 10 fastest growing counties were around Atlanta back then, so when the financial crisis hit, it really hit the state hard.

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half_integer t1_jbynie8 wrote

So, as I suspected this is an example of a https://en.wikipedia.org/wiki/Base_rate_fallacy - there were simply more banks to fail in GA/FL/IL/CA?

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TheBirminghamBear t1_jbzbuvs wrote

I think it's a different fallacy but not one I know the name of.

In essence it's a count problem. Georgia had a bunch of smaller banks and this is only counting the bank entity, not the size of the bank itself.

If you changed the chart to show magnitude based on total $s of banks that busted by state, you might see a different result

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mikamitcha t1_jbziz8a wrote

Base rate fallacy is correct if you are analyzing the original point of Georgia being the worst. Its the issue of Georgia having a much larger number of banks and the graphic here is only showing the number of bank failures, not the percentage of banks that experienced a failure.

That is why both CA and FL are darker as well, you need more banks for more people. Its also pretty impressive how light TX and NY are when you realize they, alongside CA and FL, are the leading states by population by a wide margin.

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Scrappy_76 t1_jbzjwdd wrote

This is a just a hunch but I imagine TX is lower here since the banks in TX consolidated a lot after the savings and loan crisis in the 80s.

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Whiterabbit-- t1_jbzp6rh wrote

What’s up with MN?

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lazyFer t1_jbzwcrq wrote

As a Minnesotan in the twin cities, I really haven't seen any failures. I wonder if smaller rural banks failed.

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carlitospig t1_jbzx66j wrote

Ameriprise. Would they be considered ‘bank’? Though, I’m pretty sure they grew through the crisis through a well timed purchase of a trading arm.

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lazyFer t1_jc07cf3 wrote

Yeah, they were personal investment advisors, not a bank.

Coincidentally, they were the place I interviewed at one time with a group that wanted a data person to help solve their performance problems. When I told them they should let the database handle auto incrementing key generation rather than having a single component be called every time they needed a new key in any table in their database, they said they needed their performance fixed but not that way.

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carlitospig t1_jc0ble9 wrote

‘Not that way’ is always code for ‘Ack! Change?!’

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lazyFer t1_jc0ikxx wrote

Yeah, I never took jobs at places with that attitude.

When I interview people now, I always ask how they feel about throwing away code... Because if you aren't throwing away code, you're not learning from your mistakes. You never have perfect knowledge of how shit will be used until its being used.

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mikamitcha t1_jbzwlcz wrote

What do you mean? They look to be pretty much the same as the rest of the country, just at ~30 instead of ~20. Not really that much of an outlier.

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TitianPlatinum t1_jc16mbi wrote

Could also be Simpsons paradox? The confounding variable being bank size.

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Pjpjpjpjpj t1_jc20env wrote

If this map was the percentage of banks that went bankrupt, that would eliminate the base rate issue that some states have far more banks.

But I suspect Georgia’s issue would remain, even as a percentage. It’s banks were all smaller, which I suspect would make them more susceptible to failure. But it would be interesting to see that map to see if it is true.

As you suggest, dollars might be another way, or number of accounts (to level out the impact of wealth differences across regions).

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iamthemosin t1_jbyb1pf wrote

How are there 159 counties in Georgia?

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KingTemplar t1_jbycfwr wrote

Well when they divided it up and got around to counting it turns out they had created 159 counties.

That’s not even the craziest state. KY has more counties per square mile than any other state.

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CuttingTheMustard t1_jbz34vx wrote

An additional fun stat - Texas has 254 counties - more than any other state.

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Master_of_Rivendell t1_jbzfcl1 wrote

Yeah but the size of Texas completely negates that "fun" fact, making it quite boring.

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CuttingTheMustard t1_jbzfw58 wrote

And then you consider Alaska, which is more than twice the size with only 29 counties or California which is 3/5th the size with only 58 counties.

Lots of interesting decisions were made when subdividing our states.

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HobbitFoot t1_jbzjawe wrote

Also, Alaska merged the municipal and county functions into boroughs.

Also also, Alaska has land that doesn't belong to any borough but is unincorporated, which makes Alaska the only state to have land within its state that isn't in a county.

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WartyBalls4060 t1_jc0dllv wrote

Who handles LE in the unincorporated areas? State Troopers?

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HobbitFoot t1_jc1w2e2 wrote

State Troopers. This is starting to become a political issue as some communities are now populated enough to become their own borough, but are choosing to stay unincorporated for tax reasons.

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CrispyRussians t1_jbzg2o6 wrote

Some of the best county and city names ever. Bacon County and my fav city Cumming

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bigjaydub t1_jbyn8op wrote

The story I’ve heard is that back in the olden days, they wanted the court house to be a day’s ride away from wherever you lived. Thus many smaller counties and court houses.

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GoblinCaptain t1_jbz8z1q wrote

I'd believe it, my county courthouse is a little more than 15 minutes away from me and around 30 from the furthest point in the county, not terrible honestly. Used to work in the jail that was connected to it so it was nice leaving only about 30 mins before my shift started

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Mehhish t1_jbzhccs wrote

TIL the largest Hindu Temple in the US, is in Georgia, and honestly, it looks pretty cool.

https://en.wikipedia.org/wiki/BAPS_Shri_Swaminarayan_Mandir_Atlanta

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bigjaydub t1_jbziqxd wrote

Haven’t been, but would love to go myself.

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Lemon_bird t1_jc0bgcd wrote

wow that’s beautiful. I’m learning way more fun facts here than usual

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vapidusername t1_jc0b17k wrote

That’s part of it. The other part, like a lot of things in Georgia, is politics.

https://cviog.uga.edu/news/061319-counties.html

From the article, “Until 1962, Georgia used the County Unit System to choose many elected officials. The system gave more political muscle to urban counties, so it benefited rural Georgia to create more counties and therefore more muscle.

“Another rural county, that’s two more rural votes there, off-set those interests in Atlanta,” Charles Bullock, Political Science Professor at the University of Georgia explained.

In 1945, the Georgia Constitution capped the number of counties at 159.”

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Ocksu2 t1_jbym86q wrote

We have tiny counties. I am roughly 15 minutes from 6 different counties not including the one I am in.

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TehWildMan_ t1_jbzdiun wrote

Early Georgia really wanted a local government/county seat to be within about a day's journey by whatever means of travel was available at the time.

As the state grew, that meant creating a bunch of counties.

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half_integer t1_jbynvpm wrote

Being from a state with relatively few counties (24), it seems like these states with ~100 counties but similar population (VA, KY, etc.) must have relatively cost inefficient local government - there must be a minimum staff to handle lawmaking, permits, etc. whether you're servicing 10,000 people or 100,000, right? Regardless of land area, I think I would rather have the economies of scale.

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WhileNotLurking t1_jbzax4y wrote

True but you have to ask two questions:

  1. when was it created. Things on the east coast are older and the administration of a county the size of Delaware would have been difficult in 1770s. They also took on a lot of historical boundaries that existed during colonial times.

  2. A state like Nevada with big counties might make sense as it was a state that developed much later, and is much less dense.

  3. even with the changes in advancement of transportation - who's going to vote to get rid of their own autonomy and be merged into a larger entity with neighboring counties that could have differ goals, budgets, etc.

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mixduptransistor t1_jbzq31a wrote

Counties do different things in different states (and sometimes different things even within the same state, depending on the county)

In Georgia, cities often take on a lot of the tasks of a county, and counties provide a lot of city services in unincorporated areas that in some states just wouldn't have those services. It all tends to balance out

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johrnjohrn t1_jbyctq9 wrote

I have had to enter sales tax by county data related to these states before. I thought the exact same thing every month.

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gsfgf t1_jbzk4y1 wrote

Our counties originally had to be small enough that you can ride a horse from anywhere to the county seat and back in a day. (Note: Fulton County is actually three original counties combine, hence its size)

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Sleep_adict t1_jbye88d wrote

Corruption and old boys network.

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DominiqueTrillkins t1_jbz5bt5 wrote

It was to have the ability to get to the courthouse or center of business in one days horse drawn carriage ride. Notice that flatter, more navigable areas have larger counties and the mountainous areas have smaller ones

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majestic_failure t1_jbz964x wrote

I love reading about stuff like this in politics. It's easy to assume that politicians only act on their own opinions and biases, and that there's always a really easy solution if you just pick the "correct" side of a debate. But no, sometimes well intentioned laws are just bad. The same way some game mechanics are just bad. Because understanding how a gazillion rules interact and play out in the real world is actually hard and unintuitive. And it's so wholesome when we can actually learn from mistakes like this, and be better for it.

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ValyrianJedi t1_jbzoa73 wrote

It honestly blows my mind that that many people are able to get banks up and rolling to begin with... I had an old boss who tried to open up a bank with 3 friends of his friends a while back. They had all moved to Jackson Hole or something and apparently saw a need for one... He'd been founder and CEO of a large Venture Capital firm for 25 years, and 2 of the other 3 had similar backgrounds. And I'd guess that between the 4 of them they had a net worth of $500 million or more... Last I heard they were 6 years in and still didn't have a light at the end of the tunnel... Then I hear about places like this where there is basically a new bank on every corner and wonder how on earth so many people are able to make that happen when those guys weren't.

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SUMBWEDY t1_jc03m6z wrote

Survivorship bias. You only see the banks on every corner in places where that type of thing can succeed.

A county with only 20,000~ people in the middle of nowhere where everyone who lives there is rich so likely has strong relationships with a big bank is just a dumb place to set up.

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ValyrianJedi t1_jc053iv wrote

I'm going to go out on a limb and say that 4 people with a combined century running financial institutions are able to judge the market. The entire reason they wanted to open one was because they thought there was very much a market for it

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SUMBWEDY t1_jc0aofd wrote

and i'm gonna go out on a limb and say they didn't judge the market correctly. Otherwise there'd be a bank there.

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ValyrianJedi t1_jc0gi0t wrote

The market there has nothing to do with how many regulations there are and how much red tape you have to go through to get a bank open... But by all means, keep thinking that you understand the market better than someone who own and runs a financial firm with a multibillion dollar portfolio.

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SUMBWEDY t1_jc0ki3w wrote

But regulations are part of the market and should be taken into account when making business decisions.

I don't understand the situation but I can say there wasn't room in the market for the venture otherwise it would've worked.

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ValyrianJedi t1_jc0led4 wrote

> I don't understand the situation

The fact that you can start with that then go on to make a statement about the situation is mind blowing. Think thats my cue to stop responding to you.

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SUMBWEDY t1_jc0m4u1 wrote

How is it mind-blowing, if something doesn't work doesn't take a genius to say it didn't work.

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the_snook t1_jbzapjg wrote

> Until 1996, a bank couldn't open branches across county lines

I'm beginning to understand why the US banking system is still such a mess today.

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gsfgf t1_jbzkz2v wrote

It also meant that until 1996, every county had a bank.

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righthandofdog t1_jc03qg2 wrote

FWIW, my wife is a certified regulatory compliance manager, with her practice based in Atlanta. The bank failures in Georgia were overwhelmingly state charters, not federal and we had one of the hottest sub-prime real estate markets in the country. The state of Georgia has/had remarkably lax state regulators.

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x888x t1_jc1llc3 wrote

Yup. These 'comparisons' are worthless because these types of things are so heavily influenced by regulations.

By way of a similar example, if you looked at anything related to credit cards, almost all of them are based out of Omaha Nebraska or Wilmington Delaware..

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