Dave wrote a lengthy piece today about the Bear Sterns Co. troubles and how spending tax dollars to protect people from themselves is an “unqualified good thing”.
Dave asserts that a bank run had already started. There aren’t any citations to people who actually know what the hell they’re talking about, but we’ll assume he’s right for the sake of argument. Take a look at the logic:
- First to be clear, a run had already started.
- A bank run a viral thing, and once one gets going, there’s no way to stop it.
- [A] run started on March 11 of this year, putting the Fed in a difficult position, stop it, by backing the accounts, or let it run. Thankfully they did the right thing, and stopped it.
Come again? These three statements cannot all be true, it’s a logical impossibility.
There are other problems as well. Bank runs are more about perception than about reality. Dave assumes that the moment the government springs to action, the populace sits up, takes notice, and is reassured that everything is okay. He does this in the same passage in which he complains that too few news networks covered the bail-out sufficiently. Once again, you can’t have it both ways.
It seems like what Dave really likes about the bail-out is that it fits in with his political world-view. The government came to save us from ourselves and the big evil corporations.
What you’ve got here is an example of a guy who doesn’t think critically (or maybe at all) about his ideas and opinions once he forms them. He has a thought, spews it into his outliner, and hits publish.
I thought this was a nice brainfart too: “I have a theory why they aren’t explaining this on CNN, Fox and MSNBC — and they may be doing the right thing — that by explaining how close we came to an across-the-board run they might precipitate one.”
So the media did the right thing by not publicizing the run and helping avert panic, but I’m telling you it on my high-traffic blog and increasing the chance for panic. Smooth.
He is floundering in deep waters here. Many of the commenters on that post have pointed this out. Bear Stearns was not a savings bank, of the sort where most Americans hold accounts. There was in fact a bank run on Bear Stearns, but not the type Winer describes. It was mainly their hedge fund clients that suffered as they rushed to withdraw their assets — and it would have been far worse with much broader implications had BSC not been bailed out by the Fed.
BTW, Winer busts out the C-word: http://twitter.com/davewiner/statuses/784665070
If this Twitter exchange heats up, prepare for a rash of indignant posts about how it is somehow oppressive to men that they can be called a dick but people take great offense when one calls a woman the c-word. He’ll trot out that ‘switch the genders around’ line for sure.