Kanjo on C-Span

Congressman Paul Kanjorski, from Pennsylvania's 11th district, and chair of the Capital Markets Subcommittee, is live on C-Span's Washington Journal. he is talking about and taking calls on the current financial crisis. The level of discourse is above my understanding so I can't provide rough notes. Kanjo sounds very knowledgeable about the issues involved and he is presenting a dark view. For example:

Contemplate, at the end of the month, if the bank failures are huge, and as a result all lines of credit would be called in across the country. You go to your bank and can't get any money out of the ATM. That's not a far-fetched thing. General Motors has now exhausted their line of credit. And if they don't have enough money from sales or payroll they take it out of their line of credit. If there's no line of credit there's nothing to draw on. So GM employees would go to their ATM to withdraw their direct deposited paycheck and nothing will come out. Those are the personal implications. [blogger's note: not an exact quote, but the gist]

He says the problem is that the American people don't believe the President when he tells them what is happening.

We've been so successful over the past 60 years at having soft landings, that when big banks like Washington Mutual fail, we don't think there will be ramifications, but there will be. [ditto]

He uses the analogy of a healthy person saying he doesn't want to support hospitals because he's healthy. But if his neighbor gets an infectious disease it is likely to spread to the healthy. The banking crisis is like an economic infection. Interesting.