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More Signs Washington Has Too Much Power

Posted By Conn Carroll On February 24, 2009 @ 11:49 am In Economics | Comments Disabled

Politico [1] reports today:

It was a perfectly reasonable question, and on the surface it seemed like a perfectly reasonable answer. But when Senate Banking Committee Chairman Chris Dodd went on Bloomberg TV Friday and mused about the possibility of bank nationalization, panicked investors sent the Dow plummeting a hundred points in the next hour.

Whoops.

Dodd’s casual remark and the not-so-casual consequences it caused were among the most vivid examples of a new Washington phenomenon. The city’s sudden status as the de facto world financial capital means that briefings and interviews that once would have passed with a yawn can create instant terror on Wall Street and Main Street alike.

Treasury Secretary Timothy Geithner laid an egg earlier this month when his public rollout of a bank-rescue plan was deemed too vague by the markets, and the Dow Jones Industrial Average slid a harrowing 382 points.

Last summer, Sen. Charles Schumer (D-N.Y.) faced criticism that his high-profile criticism of IndyMac’s precarious financial condition caused a run on that bank, which failed days later.

Another garrulous politician, Vice President Joe Biden, did not help the cause of consumer confidence when he told lawmakers, in a remark that got out, that there was probably a 30 percent chance the Obama administration would fail.


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URL to article: http://blog.heritage.org/2009/02/24/more-signs-washington-has-too-much-power/

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[1] Politico: http://www.politico.com/news/stories/0209/19213.html

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