The other morning, as I was preparing to go to work, I was watching a local morning news telecast when one of the newscasters, commenting on the IndyMac bank failure, said she thought that our current economic situation was similar to the Great Depression. I have a bone to pick with non-experts making commentary on a market situation they cleary don’t understand.
First, given the fact that this woman, who shall remain nameless, was under 40 years old, she, like me, has no real idea of what the start of the Great Depression felt like. Second, with people already nervous about our current economic situation, it’s my opinion that her statement was, to say the least, irresponsible.
The situation at IndyMac bank, after its takeover by the FDIC was chaotic. Panicked customers lined up at their branches in an effort to get their money out. News reporters on site made sure to pan through the large crowds and interview those people that were particularly panicked that morning. Clearly the intent was to throw gas on the proverbial fire, not provide objective analysis.
The local station I was watching reaches hundreds of thousands of viewers (I would presume). If the actions of these reporters and new anchors resulted in a even a few hundred more people pulling their money out of the bank immediately, ultimately this makes the failure of IndyMac more expensive and that tab, you guessed it, is borne by you, the taxpayers. Instead of playing up the impending Great Depression crap, these people should have been discussing the exact opposite that, unlike the Depression, we now have have protections in place like the FDIC, that economic theory and governmental oversight skill have improved substantially in the last 75 years and that we haven’t even technically entered recession, let alone Depression.
I’m all for freedom of the press as it’s one of the cornerstones of our society. What I’m against, however, is irresponsible newscasters, who have no real business making commentary on this situation in the first places, causing additional stress to people and ultimately costing me money.
Oh, by the way, shares of financial companies had their biggest day in 40 years yesterday.