John Kasich made an ass of himself with his silly flapjaw about "bailing out" JPMorganChase (inter alia) last night. (In fairness, the others on the stage missed the super-softball target that Kasich set up for them--which says a lot about the world they live in, too.)
When the question of "bank bailouts/Too Big to Fail" arose, Kasich went raging populist, saying that he would certainly--no doubt about it--"bail out" banks, to protect the 'hardworking folks whose life savings could be lost (fill in the usual rhetorical excess here)....'
John, you blithering idiot: have you not heard of the FDIC??
Let's back up for a minute.
'Hard-working Americans' who have 'life savings' can be split into a few different categories. Bottom-quintile earners have little saved, period. 4th-quintile earners may have savings, and those savings may be largely in banks, but they do not exceed $250K, which is fully insured by the Federal Deposit Insurance Corporation. 3rd-quintile people probably have savings which may exceed $250K--but most likely they are at least partially in 401(k) plans, which are diversified in bonds, stocks, and (some) bank deposits. 2nd- and 1st- quintile people are also (usually) invested in 401(k), but also in other non-bank outlets such as annuity contracts, real properties, stocks, and bonds. They may have more than $250K in banks--but they're damn fools if they put all their cash into ONE bank.
Sum: Kasich (and all the others) ignored FDIC. Why?
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