The Closet Moderate: Congratulations! It's a worthless bank!

Wednesday, March 04, 2009

Congratulations! It's a worthless bank!

There's a lot of strange doings a-transpirin' in Washington these days. As the economy continues to tank, some on the left are wondering why President Obama has not taken more drastic measures to do ... something. Something other than what the last administration did, anyway. True, he's floated this plan for handouts to mortgagees, but his plan so far for troubled banks is the same as President Bush's: give 'em big handfuls of free money. Shit, even Republicans are talking about nationalization by now, but Geithner and the gang are afraid to even mention the n-word.* Still, the Obama administration does nothing.

Or so we are meant to believe.

In fact, I think a plan is at work even now for the FDIC to seize banks like Citibank, whose last remaining asset is a big bucket of fail. "But no," you say, "Barry would never keep secrets from us! This is the most transparent administration ever! Hope! Change!" Maybe so, but consider: openly discussing nationalization or receivership would destroy whatever confidence still remains in the banking sector. Sure, he could nationalize one bank, but then everyone would drop the other banks' stock like a bad habit. He's got to snatch it up real quickly, so no one notices until it's too late. And he's got to do all of them at once, so there's no run on the remaining banks.

Finally, as much as Obama thinks he's the Luo Abraham Lincoln, the rest of his lackeys have a collective hard-on for FDR. And what's more FDR than having America wake up one Saturday morning to hear that all the banks are closed, and they ain't re-opening until the President gives the OK?

Maybe I'm insane, but I think this is happening. What other explanation is there for the lassitude in Washington? What else explains Geithner's dreadful performance in explaining the administration's plans? The FDIC does this all the time for small banks. The only reason they would have held not done so for larger failures is the fear of panic. But some of these banks are too far gone, and nationalization, or receivership, or whatever you want to call it, is coming. On some Friday evening in the coming weeks, all 300 million of us in America are going to find out we're the proud parents of a bouncing baby bank.

*No, not that one.


Fake Steve Hawking said...

This is exactly what is described in last weekend's "This American Life" , which I highly recommend. Congrats, Silent Cal, you have become Ira Glass.

Silent Cal said...

Ah, fuck me, now people will think I listen to NPR.

Harold Lasswell said...

Cal will spin in his grave before listening to NPR.

Silent Cal said...

I do listen to their five-minute podcast, but I cancel it out right after with a Wall Street Journal podcast.

Silent Cal said...

Hey, I was way off about this one! Citibank is alive and our economy is dead.