Leonardo"s Notebook by Mattheus Mei

I have been impressed with the urgency of doing. Knowing is not enough; we must apply. Being willing is not enough; we must do.

Wednesday, July 16, 2008

Breaking the Bank

After last weeks failure of IndyMac, the markets are all a fuss over what bank will be next. The Fed has said that 90 Institutions are on the verge of failing yet won't release names for fear of bank runs.

Already driven by fear of the obvious: a sagging economy, rising inflation, war weariness and administration that is in denial about it all and accountable to no one (yeah it all plays into the collective psychology of Americans) amongst a host of other concerns the public and the media are turning ever more scrutinizing eye upon our already lackluster Financial Institutions and they're government collaborators, perhaps due to the constant scandals arising from corporate governance of the past near decade.

This scrutiny doesn't come with just a little cynicism, if not a bit of schadenfreude.

To stem the tide of worry and woe, or at least to let the bottom fall out on the next Administration, neo-conservatives along with journalistic spin doctors, media patsies, and sycophants of these Ne'er-do-wells are doing everything they can to balm over and distract if not shift the blame* away from the failed policies and policy makers who brought on this crisis.

But it's not working.

Middle-class Americans, despite what many on the left and right would have us believe, are smarter than what we're given credit for by our elites.

An economic metaphor.

We recognize that markets are like cats - when you not only let the cat out of the bag, but out of the house the risk is substantially higher that your pet puss might get chased by a dog up a tree and get stuck, or worse yet get ran over by a car in the street.

We understand that there are simple steps that our leadership can take to get our cat out of the tree and usher it back into the house, after all there's nothing wrong with freeing up the market, but to leave it to its "own devices" (which has been the effect of the past decades spiraling deregulation into non regulation) discounts the effects of unknowns such collective and individual capacities to be altruistic and thoughtful or avaricious and full of caprice.

*In the case of IndyMac regulators in Treasury and at the Fed, along with the board of Directors at IndyMac say that Sen. Schumer of NY is responsible for the run (by himself mind you) because of a letter made public in which he asked regulators to beef up efforts on behalf and in light of Indy's current situation.

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