The Volokh Conspiracy - John Allison and Rand:

I've recently had the opportunity to meet John Allison and hear him speak. Allison was the longtime CEO of BB&T Bank. I believe he has stepped down from that role but remains the Chairman of the Board. I first really became aware of Allison when he announced that BB&T would refuse to lend for projects using "Kelo-style" takings to give land to private developers. My admiration grew when I read his pointed criticism of the TARP bailout in the fall.

National Review has a good piece this week profiling Allison and the influence of his Randian philosophy on his life and his business success. He may be the most articulate and influential expositor of the freedom philosophy and Randianism that I believe I've heard. I'm not a Randian, but if you ever get the opportunity to hear him speak on his philosophy or the bailout, I highly recommend it.

In fact, I think the most interesting point in the piece is how Allison's philosophy helped BB&T to avoid the ruin of many other banks:

"We didn't do negative-amortization mortgages," Allison told NRO, "and to the degree we've had more successes, I believe it's because we've had a long-term integrated philosophy. We're very much a principle-driven organization, and those principles we adhered to in the good times and the tough times are an example of the reason we didn't do the negative-amortization mortgages." Further, it's worth noting that while troubled banks went looking for handouts, Allison slammed the government bank-bailout program.

The fact that BB&T didn't dive head-first into the shallow pool of subprime mortgages certainly goes a long way toward explaining the relative health of BB&T as an institution. But how was BB&T able to resist chasing after all that new mortgage money?

The answer is simple: Subprime mortgages were bad for the people who took them out. That went against BB&T's philosophy — not for reasons of altruism but because it would have been poor strategy. "We're obviously a for-profit company, but we don't think that it's good business in the long term to do bad things to your clients, even if you make a profit doing it," Allison said. "So we chose not to do negative-amortization mortgages because we knew it was going to get a lot of people in financial trouble."

There's a lot of general life wisdom in that anecdote.

	[Todd Zywicki, May 1, 2009 at 8:17pm] Trackbacks John Allison and Rand: I've recently had the opportunity to meet John Allison and hear him speak. Allison was the longtime CEO of BB&T Bank. I believe he has stepped down from that role but remains the Chairman of the Board. I first really became aware of Allison when he announced that BB&T would refuse to lend for projects using "Kelo-style" takings to give land to private developers. My admiration grew when I read his pointed criticism of the TARP bailout in the fall. National Review has a good piece this week profiling Allison and the influence of his Randian philosophy on his life and his business success. He may be the most articulate and influential expositor of the freedom philosophy and Randianism that I believe I've heard. I'm not a Randian, but if you ever get the opportunity to hear him speak on his philosophy or the bailout, I highly recommend it. In fact, I think the most interesting point in the piece is how Allison's philosophy helped BB&T to avoid the ruin of many other banks: "We didn't do negative-amortization mortgages," Allison told NRO, "and to the degree we've had more successes, I believe it's because we've had a long-term integrated philosophy. We're very much a principle-driven organization, and those principles we adhered to in the good times and the tough times are an example of the reason we didn't do the negative-amortization mortgages." Further, it's worth noting that while troubled banks went looking for handouts, Allison slammed the government bank-bailout program. The fact that BB&T didn't dive head-first into the shallow pool of subprime mortgages certainly goes a long way toward explaining the relative health of BB&T as an institution. But how was BB&T able to resist chasing after all that new mortgage money? The answer is simple: Subprime mortgages were bad for the people who took them out. That went against BB&T's philosophy — not for reasons of altruism but because it would have been poor strategy. "We're obviously a for-profit company, but we don't think that it's good business in the long term to do bad things to your clients, even if you make a profit doing it," Allison said. "So we chose not to do negative-amortization mortgages because we knew it was going to get a lot of people in financial trouble." There's a lot of general life wisdom in that anecdote.