Most of New York Sen. Charles Schumer?s irresponsible utterances are nothing more than politics as usual, mere publicity seeking that does no direct harm to anyone, but not the last time out. He has hurt people, and hurt them badly, and there?s no excuse for his actions.
A highly influential Democrat and a member of the Senate Banking, Housing and Urban Affairs Committee, Schumer sent a letter to the Federal Deposit Insurance Corporation and the Federal Home Loan Bank of San Francisco saying that the “financial deterioration” of one of the major financial institutions in Los Angeles posed “significant risks to both taxpayers and borrowers.”
Fine. Good enough. But then there was Schumer?s other step ? making the letter public.
The consequence was an 11-day run on the bank as depositors took out $1.3 billion, resulting in the second-largest bank failure in United States history. The now-seized institution ? IndyMac ? fired 3,800 people and, as it tried to cope with its liquidity crisis, the federal Office of Thrift Supervision did not exactly cover up for the senator?s role. Its chief denounced this “interference in the regulatory process,” noting how an abridgment of confidentiality strips away public confidence.
Meanwhile, it?s reported, a former U.S. comptroller of currency went further, using phrases such as “stupid conduct” in saying that similar letters about other banks would “cause havoc in the banking system,” and warning that regulators would have to be “crazy to share information with Schumer” after this episode.
Schumer, as noisy in self-defense as in making accusations, struck back, saying that the Bush administration is trying to blame him when its own officials are at fault. By his account, he was just the guy who called 911, which isn?t anywhere close to the correct analogy.
He is the guy who shouted fire in a crowded theater, causing chaos when other safe, sane remedies were possible, and that?s true even if there was a fire, even if he happens to be 100 percent accurate in his descriptions of a malfunctioning bank and regulatory agency.
Other approaches, after all, might have resolved issues without scaring people into actions that now have depositors standing outside IndyMac branches, desperate about recovering their money.
If it was insured, yes, they will; if it wasn?t, they can reportedly get their hands on about half of it and hang onto some hope of getting it all someday, but that?s not sure. According to one published account, we?re talking about maybe $1 billion of uninsured funds. We?re talking about sleepless nights and heartache and, in some instances, perhaps, severe deprivation.
So why in the name of political maturity, prudence and just ordinary common sense did Schumer do this incredible thing? Because he is blessed with none of the above, or so it would seem from a Senate record that includes denigrating the success of the Iraqi surge, making proposals that might pointlessly keep Americans from acquiring homes, aiming to rob oil companies of profits needed to help wrest us from crisis and fighting obnoxiously against perfectly well-qualified judicial nominees because they aren?t liberals.
What he is really, really good at is getting publicity, which serves his re-election prospects, his ego, his national prominence and the fortunes of his party, I suppose. One Internet source says it was the always-perceptive Bob Dole who joked that “the most dangerous place in Washington is between Charles Schumer and a television camera.” Schumer?s prompting of a bank collapse instructs us that this insatiable desire for the spotlight, along with his recklessness, can create dangers outside of Washington as well.
Examiner columnist Jay Ambrose is a former Washington, D.C., opinion writer and editor of two dailies. He may be reached at [email protected].
