Some people are trying to blame yesterday's failure for IndyMac bank on Sen. Chuck Schumer and some are jumping on Sen. John McCain, but President Franklin Roosevelt is a more likely culprit.
IndyMac, a Pasadena, California thrift, specialized in jumbo mortgages for so-called "liar loan" applicants. The only way they could get away with that is because they could bring in large deposits from investors who felt secure because of the Depression-era federal deposit insurance program, Federal Deposit Insurance Corporation.
Without the FDIC, depositors would have to ask the tough questions about what their money would be invested in. We have the technology to regulate that very well now, thanks. We could have figured out how to do that back in the 1930's, but there is absolutely no excuse for overpaying for the illusion of safety now.
Until we kill off the FDIC, taxpayers will be on the hook for more banks' bad investment practices.
