A recession coming?

NEW YORK (AP) -- The bill for America's excessive borrowing during the housing boom has arrived, and more people are having trouble paying it.

JPMorgan Chase & Co. and Wells Fargo & Co., two of the nation's biggest banks, on Wednesday joined a growing chorus warning that the subprime mortgage mess is just the start of a sweeping lending crisis. And some fear that consumers falling behind on all kinds of loan payments could tip the economy's scale toward recession.

Strapped consumers are having a tough time making payments on credit cards, home-equity loans, and even for their cars. This has caused three of the top five U.S. commercial banks that have already reported damaging fourth-quarter results to set aside some $12.5 billion to cover future loan losses -- and that number will likely grow as the year wears on.

Problems in the subprime mortgage market are rapidly spilling over into other areas of the economy. No matter what the experts call it -- a recession, slowdown or even the makings of a depression -- it's clear banks are under mounting pressure to be more cautious about lending.

Wow. Do you think? After all those years of giving credit cards to people who shouldn't have had them and of fueling the housing bubble by handing out mortgage loans to anyone who walks in the door, do you think anyone at these megabanks ever stood back and said, "Wait a minute, guys, we're doing something wrong here. This is going to crash on us, although hopefully not until I've cashed out and retired"?

Although I have benefited from some of these loose lending policies -- and been hurt by them, too, because of my own mistakes that I am paying for -- it still seems that the old way was the best. You save 20 percent for a down payment. And you give out credit cards only to people who can pay them off.

That's the way it was when banks were locally owned and when their officers were more likely to be held accountable for bad decisions.

I do not feel sorry for these banks. I am angry that they have been so foolish that they are selling large percentages of themselves to foreign investors. How long will it be before Americans don't own their banking system anymore?

As a side note, let me for one moment defend my former employer, Gannett. While many in the newspaper industry considered Gannett to be evil incarnate, one thing the company did right was to budget in a way that its properties did not overspend in good times. A lot of papers in other companies hired newsroom staff left and right in good times, and those same papers had to announce large numbers of layoffs when ad and circulation numbers dropped. Gannett, being the local-level pennypincher it was, avoided the hills and troughs by operating as though every year was a bad year. There were no hills -- only one long trough.

Yeah, Gannett knows how to waste money at the corporate level, but that's common among Fortune 500 companies.

But no company escapes the economy forever, and even some larger Gannett papers have had some layoffs, I have heard.