Aohell

The Devil We Know...

WaMu was wiped out with an electronic bank run. There is panic in the world of banking, and although the whole idea of spending as much money as was spent on five years of war in Iraq at a stroke to rescue the credit markets makes reason stare and stomachs turn, it must be done.

If that panic isn't halted, WaMu's failure will pale in the face of business closures due to an inability on their part to secure financing for day-to-day operations. Banks have suspended lending to each other and they need a sign from Washington that there is something substantial propping up the system.

Yes, these are guys that serve Mammon, not God. We want to see them burn for their sins. But if we don't move to prop up the market now, they'll take us all down to hell with us.

I would say this episode shows the bankruptcy of unregulated free-market capitalism. It's as pollyanna as notions of socialist workers' paradises. We live in a world with evil men afoot, and no pure system is going to succeed once they latch on to it for fun and profit. Better to have the annual growth rates slashed a percent or two and have a smoother climb up than risk an unregulated crash into the ground.