Seven Red

Communism has to be about more than the redistribution of property. Who wants all this shit? – Antonio Negri and Felix Guattari, Communist Like Us

Yikes…. Wachovia trying to build up depleted cash reserves. Ain’t post-Keynesianism grand?

Yesterday, Bair, President Bush and other senior regulators made a concerted effort to reassure people that their money is safe and that the nation’s banking system is sound. Noting that the vast majority of banks remain well-capitalized, Bair said it had been an “uphill battle” to counter false rumors and restore calm among investors and bank customers.

“This is not a serious situation. I would call it challenging, increasingly challenging,” she said in an interview. “We’ve had five bank failures this year. That is not huge. . . . I don’t want to overreact or underreact, but let’s get the facts. We are at a very low level of failures compared to previous cycles of economic distress.”

Why am I having flashbacks of Ken Lay telling all the Enron employees that everything’s fine and they should stick with the company stock? It’s always fun to note that despite all the complex economic theorizing, the whole shabang actually and virtually runs on little more than particular affective attachments:

In California, police were called to calm crowds of anxious customers…The current environment is risky for financial firms. Rumors and false reports can trigger a run on a bank even if it is well-capitalized. Two institutions have been sunk by such panics this year, the 85-year-old brokerage house Bear Stearns and IndyMac.

Crowds! Rumors! Panic! Lesson: disturbances in the crowd ecology are rhetorical, and can only be countered rhetorically: don’t worry…you’re covered.

Well, we’re covered, alright…

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