The right is orchestrating a campaign to blame Democrats for the economic collapse. In cases like this it is often a matter of being the first out there with a story. For example, Progressives and Democrats could have been explaining the economic collapse on the cost of the war, or the huge borrowing that resulted from the tax cuts. But now the right is out there with a story, and the ability to get that story to the public. So we’ll see which narrative takes over.
Here’s the story. A major bank failed yesterday, and a Bush appointee in the government put out a statement directly blaming Democratic Senator Schumer. So the narrative the right is pumping out is that “the government” says Schumer is at fault for the bank failure. (What Schumer did was say that the bank appears to be insolvent because it was. Republicans say this “caused” a run on the bank. The fact is the bank was closed because it was insolvent, not because people were taking their money out. But facts don’t matter.) I suspect you’ll be hearing a lot more of this from Limbaugh Monday.
here’s a sample of the right’s messaging on this:
Senator Schumer Causes Bank Failure
Schumer, whose self-serving publicity hounding is legendary, decided to go public with information that he knew or should have known would be detrimental to the process — and now he arrogantly refuses to accept any blame for his own politically motivated actions that were the proximate cause of the institution’s downfall — and blames the regulatory process that he created in legislation that he largely wrote back in 1999.
Now the question is, did Senator Chuck Schumer cause IndyMac’s collapse? The Office of Thrift Supervision, that regulates entities like IndyMac, says “the immediate cause” of IndyMac’s collapse was Senator Chuck Schumer.
Two weeks ago, Schumer publicly released a letter he had written to regulatory agencies, demanding action to prevent IndyMac’s collapse. Instead of shoring up the bank, the letter induced depositors to make a run on the bank. Within days, over $1.3 billion in deposits disappeared, forcing the FDIC to close the bank and pay off the insured deposits.
That move cost American taxpayers billions of dollars. Don’t forget to thank Uncle Chuck when you have a chance.
Maybe, just maybe, things like this could be avoided if the Democrats would stop meddling with the free market. The more Democrats try to interfere with our economy, the more it crashes. And the more it crashes, the more government intervention Democrats think is necessary. And somehow, Americans keep voting Chuck Schumer & Co. into office.
How much money can we afford to lose before we wise up?
LA Times: The chairman of the Democratic Senatorial Campaign Committee caused the second-largest bank collapse in USA history.
… Are Democrats so desperate for power that they are willing to cause bank panics that cost people billions?
Or are they just that incompetent?
… Democratic Sen. Chuck Schumer cost the public more than a billion.
Where did the money go?
This casts a huge — $1.3 billion worth — cloud of suspicion over the Democratic Party’s point man in the Senate elections this year.
Update – One more comment: The Fed provides liquidity to banks in this situation. If they are SOLVENT the Fed provides all the cash they need to meet demands of depositors. So a “run” can’t cause a bank to close. If they are NOT solvent the FDIC shuts them down right away to prevent a run from draining remaining equity.