Friday, September 26, 2008

Is a Bank Holiday in Our Immediate Future?

Google "bank holiday" and on the first two pages you will get primarily a listing of dates when banks are officially closed, a couple of articles on the 1933 event, a news article titled "Bank Holiday" that doesn't address the topic at all, an article about the news slant in one community when the 1933 bank holiday was declared and a wikipedia entry that is all of two short paragraphs describing the 1933 bank holiday imposed by President Roosevelt which reads:

United States Bank Holiday

"The United States Bank Holiday of the Great Depression took place in 1933 when Franklin D. Roosevelt closed the banks from March 6 to March 10 to keep depositors from bankrupting the banking system by withdrawing all their money.

"Banks were allowed to reopen when they could prove that the money in their reserves was greater than or equal to the money that had been deposited in. If the banks were unsound they would stay closed or could apply for a government loan in order to keep from declaring bankruptcy."

Today's News is Void of the Concept

Google lists no current day story using the phrase "bank holiday" (except the misleadingly titled one mentioned already.) A Real Clear Politics search yields zero results as well.

The point is that we are on the verge of shutting off credit worldwide if our Congress can't get its act together, but no one has yet begun to seriously consider what that will mean to you and me. Well, it means a bank holiday, pure and simple. That's the only logical outcome when panic sets in, as it will begin to do as early as today, or over the weekend, if the dithering in DC continues.

How will a Modern-Day Bank Holiday Work? Can it Work?

It was easy in 1933. The article on Charlottesville claimed that bank employees cheerfully pasted "Closed" signs on the front of the bank doors and went home to relax in the sun. The local news of the day was upbeat, claiming that residents of Charlottesville were resourceful, their bank was in fine shape, and that they would easily ride out the storm.

That was then. No credit or debit cards, no international dealings of consequence, no instant internet communication of news (and of rumors) and, perhaps most important, most households had plenty of canned goods stashed in the pantries plus a garden, a few chickens, a hog and a cow to provide food for the table for weeks, if not months.

Today, will the grocery store take your credit card during a bank holiday? Will the gas station? Will you even be allowed to use it? Besides potato chips, Doritos, a twelve-pack of beer and a few cans of Pepsi, do you have any food in the house? Do you have enough cash to eat at McDonald's for the next few weeks? Will McDonald's be open? Will you be able to get through the bank's doors to get the cash you prudently stashed in your safe deposit box? Are you beginning to see why people used to stuff money in mattresses or bury it in a coffee can in the back yard after the 1930's? Do you understand why this only happens every 50-60 years, after all the grandparents have who last experienced it have passed on?

This is Serious

A co-worker of my spouse said we should just let all the Wall Street people suffer. To hell with a "rescue plan." People don't realize that this is about them, not Wall Street, and with the news media fractured into two camps today, one liberal and one conservative, and with no one in the middle looking for the truth except a few bloggers (well, okay, maybe a few million bloggers) no one knows who to believe anymore, so they don't trust the words of anyone in a position of authority.

The President of the United States goes on television in prime time and tells us the country (that's all of us, folks) is in serious trouble and his speech is parsed for politics and otherwise ignored. This isn't about politics, or it shouldn't be. It's about preserving what we have and maintaining order while we do so.

Who'll Get the Blame This Time?

A Republican Congress shut down the government during the Clinton administration over a budget disagreement. It's generally agreed that Clinton, using his bully pulpit, managed to cast most of the blame for the (relatively mild) public inconvenience on the Republicans in Congress and they suffered at the next election, as I recall.

Today, a Democratic Congress (for those of you finally paying attention who have ignored politics for years, yes, the Democrats now control both houses of Congress and have done so for the past two years, and yes, their approval rate is in single digits now at 9%, and about to go lower if they're not very, very careful) is responding to the President's urgent request by larding up the legislation with provisions that will serve no benefit to the general public, but will go a long ways toward solidifying their political powers. Republican legislators are rationally attempting to block such a move, and so we are at a standstill.

So, who gets the blame when this mess forces the President to declare a bank holiday? My money is on the bully pulpit. It's a lot easier to get everyone to listen attentively to a national address when the gas station just turned down your credit card, you only had $5 in your wallet and were barely to get enough gas to get home from work (because you had to go out of your way to drop off a friend who carries no cash at all anymore.)

What the President Should Consider Saying

"Folks, we have a problem. It was caused by politicians constantly seeking more and more power for themselves. As a pack, they quit working as your servants and now have you serving their needs. I ran as a "compassionate conservative" but there is no room for true compassion in this town anymore because compassion requires caring about someone other than yourself, and everyone in DC is out for themselves, with just a few precious exceptions.

"I am now calling on every sitting legislator to bring me a rescue bill that meets two criteria."

The First Criterion

"First, it must be a clean rescue bill that I can sign, and I will tell them what I consider "clean" after consulting with my economic advisers. No politics; just deal with the problem. This, however, will be just a short-term fix."

The Second Criterion

"Second, to address the systemic cancer that Washington politics has become, I will only accept the rescue bill if it includes an ironclad provision for term limits for Congressional office. If there are not enough legislators who will sign on to term limits to pass a bill, then we will get no rescue bill and you will see where their sentiments really lie, with their own personal fiefdoms."

The Long-Term Solution

"Immediately upon being provided the legislation I am requesting, I will sign it upon one further condition. The legislators supporting it must each give me their personal guarantees that the next order of business they take up will be a Constitutional Amendment that incorporates term limits for legislators into the U.S. Constitution.

"If they promise to do so, and renege on that promise, I will trust you, the voters, to take your revenge on them at the ballot box this November. Only by term-limiting our legislature will we ever end this continual, and cancerous, growth of government that now threatens your very livelihoods."

It's Time to Choose

We have reached the point in this country where we now get to choose the path we are going to follow. One path, built on self-reliance and personal responsibility and yes, personal service, will lead us out of the mess our political class has created and the other, built on what is essentially the continuous greed of politicians, will drive our economy to levels not seen since the 1930's but, I fear, absent the civility that prevailed then. It is high time that our politicians learn that they are to return to the life of a normal taxpaying citizen after serving us for a few years, rather than reposing in resplendent mansions while retaining the powers of office.

If you blame President George Bush for all this, so be it; he's being term-limited out of office in January. But if you also wonder at the possibly that our esteemed , 9% approval-rated, Congress just might share a bit of the blame as well, then wouldn't it be nice if they, too, were facing a term limit somewhere down the line? Wouldn't it be ironic if our sitting-duck President could turn the passel of them into a flock of sitting ducks as well?

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