The National Wealth Service
Jonathan Raban · The FDIC
I just got off the phone with a helpful guy called Fernando from the Federal Deposit Insurance Corporation (FDIC). The local bank where I have a chunk of my savings on deposit is in deep trouble and liable to be closed any day now, and I was concerned that my status in the US, as a permanent resident but not a citizen, might disqualify me from FDIC coverage. No problem, Fernando said. Everybody’s covered – immigrants, legal and otherwise, foreigners, citizens, whatever. An account with a single name on it is insured for up to $250,000, but as you add more names (of partners, family members, trusted friends) to the account, the greater the number of $250,000 tranches are protected.
Last month, the country went into convulsions over the passage of the very modest healthcare reform bill, from which the 'public option' or 'single-payer system' was excluded for ideological reasons because it represented 'socialised medicine' and the intrusion of the ever-enlarging state into people’s private lives (the NHS was held up by Republicans as a dreadful example of what might happen). It’s the responsibility of the individual to insure his or her health: were the state to do it, it would be an infringement on personal liberty and the Bill of Rights.
Since 1933, banks have been posting signs outside their doors that say 'Deposits are backed by the full faith and credit of the United States Government,' and the FDIC is, in effect, a national wealth service, with taxpayers guaranteeing the private capital of all bank customers, domestic and foreign. Since I’ve never heard a murmur raised against the institution, everyone seems happy to support a system of socialised money, on a scale far more generous than Britain’s Financial Services Compensation Scheme (FSCS), with its – recently raised – limit of £50,000 per account.
My bank, which has been ordered by regulators to either find a buyer or raise several billions in capital by 15 April, sacked its president, one John Dickson, a couple of weeks ago because he was insisted on claiming holiday-leave due to him, and taking his wife and children to Hawaii for a ten day vacation, leaving on 31 March. 'It was one of those principle things,' he explained to a local newspaper. 'My family and my marriage comes [sic] before my work.'
But people in glass houses… I’m not bothering to go down to the bank and rescue my savings. When, as I expect it to, the FDIC moves in on Friday 16 April, I might drive around there to watch what happens, out of curiosity. I’ll have access to my money again within 24 hours, guaranteed. It’s what Americans have always said about socialism: it corrodes the spirit of personal responsibility – John Dickson’s (he’s probably sunning himself on the beach at Waikiki right now) and mine alike.