Commentary Magazine


Nice Job, Fellas

Even the New York Times can’t avoid the obvious:

Once again, investors are losing confidence in the nation’s beleaguered banks — and, this time, experts say, in Washington’s ever-changing plans to rescue the banks as well.

Despite somber assurances from the White House that the industry is sound, shares of bank companies plunged to new lows Friday on fears that some of the nation’s largest banks, including Citigroup and Bank of America, eventually could be nationalized.

Even though both companies said that was not the case, investors pointed to a seemingly offhand remark by Senator Christopher J. Dodd — to the effect that the administration might assume ownership of certain banks for a short time — as cause for concern.

The Times quotes a former bank regulator: “People are getting spooked… When you have the government coming out and saying that they are not thinking about nationalization, I think it falls on deaf ears.”

In other words, the Obama administration, and specifically the boy genius Treasury Secretary, succeeded in wreaking havoc on the markets in a matter of weeks. It is rather remarkable that they thought they’d spur a recovery by talking down the economy, providing no clarity to investors and financial institutions in dire need of some, and coming up with pork-a-thon “stimulus” bill. One wonders how much wealth has been incinerated (and how long the recession has been prolonged) by a government-induced panic. As one columnist noted:

But the bottom line is this: Obama’s economic plans cannot work with the cooperation of the markets. Falling stock prices mean people and business will continue to cut back on spending, and eventually higher interest rates will slow borrowing due to fear of monstrous deficits.

Apparently it’s not just about campaign rallies and who won the election.