USA Today has an article about how many people are withdrawing their deposits from many banks, fearful of their risk of failure, even though the deposits are insured by the Federal Deposit Insurance Corporation. While this behavior appears irrational, it would have been appropriate to mention the fear campaign by President Bush, many members of Congress, and reporters and columnists to gain public support for their bank bailout. This fear campaign involved frequent references to the Great Depression. This effort to promote unfounded fears created a political environment that facilitated passage of the bailout bill. It also has led to the sort of irrational withdrawals of money from accounts that are insured by the government. It should have been mentioned in this article.
--Dean Baker
