Intellectual Property Law

Leadership

By Susan Crawford

I’m staying at an FDIC hotel - the FDIC Seidman Center.  (This is the conference hotel for TPRC 2008.) A while ago I went down to the fitness center on the first floor and a security guard waved me in.  It’s a shiny, well-cared-for facility.  The gym is huge, freezing cold, and has every possible machine.  There was only one other guy in there when I arrived, and he told me that the place clears out by about 7:30pm.

FDIC, my host tonight, knows how much the savings and loan bailout of the 1980s-90s cost -  http://tinyurl.com/6zlskk is from the FDIC, and according to this post includes “spending by both the Federal Savings and Loan Insurance Corporation, which ultimately became insolvent at the end of 1986, and the establishment of the Resolution Trust Corporation in 1989.”  The bottom line:

From 1986-95, over 1,000 thrifts failed, forcing the government to take control of about half a trillion in assets, which were then repackaged and resold. As of 1999, losses to U.S. taxpayers totaled $124 billion (the thrift industry paid for another $30 billion, for a total of about $153 billion in total losses for the cleanup). Over the course of the crisis, the number of thrifts declined by about 50 percent, to 1645.  . . .  It’s worth noting that the initial estimate of the savings and loan bailout were woefully low, something on the order of 400 thrifts with about $200 billion in assets. Those number were waaaay off: 800 thrifts and $400 billion. In the first year.

I chatted with the guy next to me - we continued to be the only people in the vast, gleaming gym  - and we watched MSNBC together.  We both exclaimed over the nastiness of the political ads.   He said, “I wouldn’t want to be a politician.”  He left after a while, and then it was just me.

The multiple TVs overhead kept playing, showing Keith Olbermann fulminating about Sen. McCain “parachuting in” and wrecking a bipartisan bailout deal that had already been reached.

Tonight seemed quite dramatic - endless meetings on Capitol Hill capping off the photo-op weirdness of the President’s meeting today, punctuated by the (empty? bizarre? masterful?) gesture of Sen. McCain in “suspending” his campaign.

Somewhere, there must be smart people figuring this all out, backed up by the smooth gleaming functionality of a government that can produce an enormous unpeopled gym for the FDIC.  All the drama of today was just business as usual in the context of that gym.  It’s seen bailouts before, apparently.

Full post as published by Susan Crawford Blog on September 25, 2008 (boomark / email).