It's not unusual to discover that there's less than meets the eye when it comes to politicians and their promises. What is unusual is just how very much less there is when it comes to one of the new "features" of the bailout bill - namely, raising the cap on FDIC insurance.
Please join me as I examine this one particular bit of offensive garbage at some length.
Point 1: FDIC insurance covers deposits; money in your checking account, savings account, money market deposit accounts and CDs is currently covered to $100K; coverage goes up to $250K under the bailout plan.
May I say, Whoopdee-fucking-do.
I don’t know about you, but the last time I had more than 100K in one of those was...let’s see...oh yeah, never. The FDIC does not insure stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities, even if you purchased these products from an insured bank. So you’re still on your own there, bucko, and I’m sure you’re enjoying that particular ride. Cause even Uncle Sam isn't stupid enough to go near that stuff.
Point 2: For those lucky folks with more than 100K in deposits, you can already increase your FDIC coverage more – way, way more. I got Googley with it and found five ways within mere minutes.
*1st way: Leave 100K in the first bank and open a new account at another bank (not another branch; another bank). Bingo – another 100K of FDIC coverage. Repeat as necessary.
*2nd way: Do you have a joint account with your spouse? Bingo. Each person is entitled to 100K coverage, so the money in the account is effectively insured to 200K.
*3rd way: Many types of retirement accounts are already insured by the FDIC up to 250K, independent of other accounts held by the same person at the same bank. These accounts include Roth IRAs, SEP IRAs, SIMPLE, Keogh account, 457 plans and others.
FDIC info on covered retirement accounts
*4th way: If a depositor really had bunches of cash in the bank – a small business, for example -- there’s already a way to extend the amount covered by the FDIC up to $50 million. That’s right my friends, a program called CDARS (stands for Certificate of Deposit Account Registry Service) allows you to do just that. According to the American Banking Association website, "It enables banks to offer up to $50 million in federal deposit insurance by spreading the deposits among several banks (thus spreading the risk) and allowing customers to keep all their deposits in one bank. More than 2,000 banks offer this service." ABA info on CDARs
*5th way: Go to a bank and open a revocable trust account – you can have up to five named beneficiaries and get covered up to $500K; if there are more than five beneficiaries the insured amount can be even higher (100K for every named beneficiary). FDIC info on revocable trusts
This coverage is separate from other types of covered accounts at the same bank (which as we’ve seen is already at least 100K; 200K with a joint account; 250K for certain retirement accounts and $50 million for qualified accounts under the CDARs program).
Point 3: Even ignoring all the ways you can currently enjoy oodles of FDIC coverage without the help of the big strong leaders on Captial Hill, this supposedly meaningful increase in the FDIC cap they're talking about will be temporary anyway. It’ll expire in December 2009 and says so right in the Bill. So once again, whoopdee-fucking-do.
Point 4: I’m sure someone out there can come up with a Point 4, but I think by now you begin to get my drift. The whole hoopla about this "game-changing" modification to the bailout bill is nothing more than manufactured hype. Bullshit like this has been pouring from the mouths of Democratic and Republican politicians for so long that we might as well replace them all with sewer pipes – it’d still be crap coming out but at least we wouldn’t have to pretend it was something else.
It’s not that raising the FDIC cap to $250K strikes me as a bad thing in and of itself; it seems a relatively harmless and ultimately, probably meaningless gesture. I mean, if banks really start to fail, with droves of people withdrawing their money in the millions or billions, won’t the FDIC just be the latest paper tiger to fail, fold and fall? Which means whether it covered deposits up to 100K or 250K will be nothing more than a niggling footnote in the rather sordid tale of the collapse of the U.S. financial system.
Aside from all that, though, the thing that really gets me is how earnest politicians are as they offer up these sops to us as if they were actually meaningful. And how they do it over and over again until we get bored or tired enough to roll over once again. Call them on their bullshit Monday and shut them down, and guess what? By Wednesday they’ve reached into their rancid little bag of tricks and pulled out another gob of shit to smear across this bill in lieu of lipstick.
I mean, come on Senators, Representatives and assorted crooks, swindlers and liars that comprise the Administration – how stupid do you think we are? Personal savings in this country are at Depression-era levels – meaning less than zero. And we’ve been in negative savings territory for some time now. I for one have not exactly been losing sleep at night wondering if all my hundreds of thousands of dollars in savings is well-protected by the FDIC.
Rather, people are dipping into their savings to pay for food, fuel, clothes and housing. Or plundering the shrinking equity in their home. Or maxing out their deck of credit cards. Or letting their health insurance laps because of the double-digit increase in premiums -- for the tenth year in a row. Or pounding the bricks looking for 2nd and 3rd jobs to keep the dream alive.
Sorry for the meandering rant, but if I hear another Democrat or Republican tell me how now they can vote for this bill ‘cause now it raises the FDIC cap from 100-250K, my brain may literally explode. And I know DailyKos is all about getting better Democrats elected, but I have a sinking feeling that the Democratic leadership is pretty much bought and paid for too and will do exactly what their corporate overlords tell them to do – haven’t they proved it time after time after time since 2006? And they’ll try to sugarcoat their craven actions with more bullshit like this FDIC cap example, and on and on it will go until enough people get pissed enough to actually change things.
Feel free to disagree and tell me that there is hope. Tell me there's a pony under all that horseshit. Meanwhile, I’ll leave you with this poll: