Thursday, April 16, 2009

Our Senator's own financial panic

The News & Observer is reporting about the hysterical antics of NC's senior Senator.
When the banking crisis hit last fall, U.S. Sen. Richard Burr told his wife to take as much money from the ATM as she could.
Our Senator has been regaling audiences with the following instructions that he gave to his wife shortly after receiving a briefing from Treasury Secretary Paulson last Fall.
"Tonight, I want you to go to the ATM machine, and I want you to draw out everything it will let you take. And I want you to tomorrow, and I want you to go Sunday," he said, according to an account in the Hendersonville Times-News. "I was convinced on Friday night that if you put a plastic card in an ATM machine the last thing you were going to get was cash."
Let's count the ways Sen. Burr's panicked actions were wrong.

First, he clearly does not understand the banking system. Deposits in FDIC-insured banks at the time were guaranteed up to $100,000; they are currently guaranteed up to $250,000. The money in the Senator's account, or at least any reasonable amount that could quickly be accessed through an ATM was not at risk.

Second, through his actions, the Senator is effectively telling his constituents that their money is at risk. He's not only giving bad information but spreading unnecessary panic. Along the same lines, he is role-modeling bank-run behavior.

Third, if a financial meltdown and ensuing bank run had occurred, his story shows that he wanted to make sure that he was the first in line. Screw everyone else, including his constituents--the Senator was going to make sure that he was taken care of. If the ship was going down, he was going to jump in the front seat in the life boat.

Finally, his story indicates that he was also willing to use inside information--a briefing he received from then Secretary Paulson--to benefit himself.

At a time when North Carolina and the nation need calm leadership, Sen. Burr is instead trying to scare the pants off his constituents with a story that shows that he is ill-informed, panicked, and selfish.