Assuring Words On Economy Far From Reassuring BALTIMORE, MD (wypr) - Gas prices are up, way up.

So is the price of food.

The old 401K, so much fun to watch for so long, is headed down along with the stock market

We have two new best friends: Fannie Mae and Freddie Mac. We hear that armies of lobbyists may be unable to save the mortgage buyers from themselves. We are asked to breathe easy, armed with the knowledge that they are too big to fail. If they should begin to fail, we -- the taxpayers -- may have to bail them out. If anyone is expecting us to save them, we think, we really are in trouble.

The nation's top money men - the Federal Reserve's Ben Bernanke and Treasury Secretary Henry Paulson - say the two mortgage companies, Freddie and Fannie - were really quite healthy, even as their stock value sagged.

The fear from all of this, our leaders say, is just a psychological thing. We knew that.

The more assurances pour in, the more psychologically challenging it gets.

One conjures with various visions. Do we have a kind of financial Katrina washing over us?

There was, at least, a kind of democratizing aspect to the downturn. There were some of the same ingredients in the two storms, financial and meteorological: an absence of regulatory oversight by a government that doesn't believe in regulation. There was high-level corporate greed and our own over-reaching as well.

In New Orleans, people built houses below sea level. Pumps made it seem risk-free. Katrina had another thought. Wealthy people forgot how much jeopardy they were putting themselves in. Poor people had no choice.

The real outrage is that none of this had to happen, a student of the financial system told The New York Times. We did not have to ruin the financial system and ruin the financial lives of a huge chunk of the middle class in the United States.
But maybe this ruination is just a temporary or psychological thing.

You were listening to a commentary by WYPR's Senior News Analyst Fraser Smith, a regular weekly feature on 88-1. You can address any comments on this or any other essay by e-mailing fsmith@wypr.org. © Copyright 2009, wypr