Tuesday, July 15, 2008

Tuesday 7-15

I find it ironic that in the "Information Age", we have so many people who lack proper information on important issues.

Take for example, the people who lined up outside of Washington Mutual banks in California yesterday to withdraw all their money. One of the national network newscasts had one woman saying she was there to get all of her money out of the bank before it goes broke and she loses it. Somebody might want to tell her that all deposits--up to a quarter million dollars--in that bank are insured by the FDIC. So even if WaMu went under, she would still get her money. Perhaps stories about the bank's recent losses included that bit of info--but I'm sure all she (and the others in the line) heard was "Such and such Bank is in crisis" (everything is a crisis nowadays).

Now if she had said "I'm taking my money out of this bank because I'm dis-satisfied with the number of risky investments its directors have chosen to undertake--like buying sub-prime mortgages" I'd have no problem with her decision. But to just take the money out based on speculation and mis-information just frustrates me.

The ultimate irony is that the actions of the mis-informed usually results in the situation everyone was trying to avoid. The loss of deposits will likely speed up bank failures--which will feed the panic cycle. The 24-hour news cycle will speculate on which banks will be next to fail--sending their customers to make panicked withdrawals--leading to more closures and more panic. Remember the savings and loan disaster of the '90's?

I can understand how people might have been un-informed in the 1920's and 30's when you had to rely on just newspapers for all of your information on the outside world--with gossip filling the gaps. But now we have multiple radio stations, 200-tv channels, and millions of instructive, trusted web-sites that can provide you with the facts in an instant. So take a few minutes to get all the facts--and not from blog sites please--then choose your course. You may find it's a little less stressful than just following the herd.


  1. Sometimes, having too many sources of information is a terrible thing. People latch on to any piece of crap they hear, and it becomes gospel. No one ever goes that extra mile and says "where did this piece of information come from? and can they back it up with fact?

  2. Can you imagine the uproad during WWII had information been instant? 600,000 Americans died during that war, compared to 58,000 in Vietnam and about 4000 currently in Iraq.

    That's not a blessing for war, just an observation.

  3. Years ago when Walter Cronkite came on at 5 pm, you pretty much got the straight story. And it WAS unbiased reporting. Now everyone has an agenda! And people are in such a hurry, they do not stop to get the facts...or the details. A blogger is not necessarily a newsperson! I was about 11 at the height of the Viet Nam war. I can only imagine what the bloggers would have done in the 60s!