California based IndyMac Bank became the second largest bank failure in United States history Friday after a bank run straight out of “It’s a Wonderful Life” was triggered by publicity-seeking Senator Charles “Chuck” Schumer (D, NY).
This is not merely my opinion, mind you, but the stated conclusion of John M. Reich, the Director of the federal Office of Thrift Supervision (OTS), who publicly declared Friday that the run was triggered in large part because “The senator made comments in his letter questioning the viability of the institution.” Adding, “When a member of the United States Senate makes such a statement, it frightens depositors.”
The June 26 letter in question was from Schumer, a senior member of the Senate Banking Committee, who used his position of authority to communicate to the OTS and the FDIC that he was "concerned that IndyMac’s financial deterioration poses significant risks to both taxpayers and borrowers," and that IndyMac "could face a failure if prescriptive measures are not taken quickly."
Everything might have been fine had Schumer stopped there, but Schumer (being Schumer) took the additional step of releasing the letter to the press. When stories began appearing stating that a US Senator believed the bank would fail, depositors rushed to withdraw their money — and over $100 million per day began hemorrhaging from the bank. News of the run led to more panic and withdrawals, so that by Friday the bank had lost $1.3 billion of deposits in just 11 days — forcing it into receivership under the OTS.
The FDIC bailout will cost billions of dollars and thousands of depositors whose accounts were not fully covered by FDIC guarantees will lose over $1 billion in savings. 4000 IndyMac employees were laid off in the 11 days of panic in a vain attempt to find enough cash to preserve solvency. The saddest part is that the OTS and FDIC were already aware of and quietly working to address the problems at IndyMac bank. Schumer’s letter was simply a publicity stunt.
Schumer responded to the OTS conclusion that “The immediate cause of the closing was a deposit run that began and continued after the public release of a June 26 letter to the OTS and the FDIC from Senator Charles Schumer of New York” by stating that the bank’s sudden failure proves how right he was to tell everyone that the bank might fail (you know, if someone were to cause a panic or something).
There is no doubt that the bank had issues — but such problems can be handled by government in a panic-inducing way that makes them far worse, or they can be handled with tact. This presents a severe challenge to Chuck Schumer as he was born with a rare and congenital politico-medical condition known as “Spitzer’s Syndrome” (In fact, Chuck Schumer could be described as Eliot Spitzer with less in the way of whores and humility).
The Senator’s Spitzer’s Syndrome causes him to react to every situation as if it were a Memorial Day used car sale commercial and he is “Crazy Chucky” Schumer — a man so obsessed with volume that he must be crazy to sell these cars at these prices. Except Schumer isn’t selling cars, of course — he’s selling himself as the loudmouth, just-in-time savior, of you, the grateful little people. My God, you’re lucky he was here to uncover such evil-doing and malfeasance.
Due to his condition, Schumer sometimes commits little faux pas such as, when seeing a bank in trouble, not simply expressing his concern in a discrete way to the relevant regulatory authorities, but instead running immediately towards a camera and declaring, “As a US Senator, I would like to comment on the situation at IndyMac by stating, OH MY GOD! THERE’S GONNA BE A RUN! IT’S ALL OVER. GET YOUR PENNIES ON THE DOLLAR OUT OF THE BLACK HOLE WHILE YOU STILL CAN! YOU’LL ALL BE EATING CAT FOOD IN RETIREMENT IF YOU DON’T STORM THE VAULTS NOW!!!!!!!!!!”
Then, after the stampede ensues, Schumer thinks to himself “Man, I’m Nostradamus and BatMan all in one.” And if it is pointed out that maybe he caused the panic, Chuck confidently replies that was all inevitable, he was merely warning everyone, and that the recent disaster shows that the authorities were not doing their job. Apparently their job is conducting crowd control in the wake of Schumer’s incitement.
Following the same model, Schumer’s idea of improving fire safety would be, upon finding a smoldering cigarette in a trash can, to yell “FIRE!” in a crowded theater, then to hold a press conference pointing to the trampled bodies as proof of how serious the situation really was. Finally, he would blame the fire department for the whole thing for not holding “Schumer drills” to plan for the possibility that he might show up during a fire.
As I said, this behavior is not Chuck’s fault as he suffers from an inherited condition that, I have learned, has dogged his family for generations. Other great moments in Schumer history include:
October 30, 1938: Schumer’s biological grandfather, Orson “Schumer” Welles (this relationship is a closely guarded family scandal — for the Welles family), sees a shooting star. He then sends much of the nation into a panic with his famous “War of The Worlds” radio broadcast claiming that the Earth was being invaded by Martians. After the panic, Schumer Welles says the whole thing proves how unprepared the Earth is for alien invasions and blames the episode on a lack of oversight by NASA. This claim is made all the more remarkable by the fact that NASA will not exist for several more decades.
April 14, 1912: Chuck Schumer’s great great Uncle, Edward “Schumer” Smith, steers the RMS Titanic into a passing iceberg in order to “safely push it out of the way of any smaller boats that might pass by later.” After the mass drowning of Titanic passengers, Schumer Smith takes credit for discovering the “laxity of lifeboat oversight” in the cruise industry. Al Gore later points out that the iceberg was probably set afloat by global warming.
October 24, 1929: Schumer’s great aunt, Charlene “Schumer” Smoot-Hawley, rushes onto the floor of the NY Stock Exchange to thoughtfully point out that many stocks are overvalued by screaming “WE’RE ALL DOOMED! I’M A FUTURE SENATOR’S GREAT AUNT AND I CAN TELL YOU THAT HE MIGHT ONE DAY HAVE INSIDE INFORMATION INDICATING THAT THE LAST ONE TO SELL HIS STOCKS TODAY IS A ROTTEN EGG!!!” This triggers the Stock Market Crash and the Great Depression. After dozens of traders then jump to their deaths from high windows, Schumer Smoot-Hawley opens an investigation into the lack of padding on Wall Street sidewalks. ACME Concrete Inc. is eventually prosecuted for negligence.
November 28, 1942: Schumer’s late uncle, “Fire Marshall Bill” Schumer, conducts an “evacuation readiness exercise” at the Cocoanut Grove Nightclub in Boston, Massachusetts… Well, you get the idea.
Men like Charles Schumer have always made history and are indispensable — to their own over-inflated sense of self-importance. Washington insiders have long joked that the most dangerous place in America is to be between Charles Schumer and a camera. Unfortunately for the rest of America, the man has now found a way to spread this danger via the U.S. Postal Service.