Insurance for mutual funds costly ideaIn the wake of the...

the Forum

September 27, 1993

Insurance for mutual funds costly idea

In the wake of the devastating bank failures of the Great Depression, there was enacted banking legislation in 1935 which established the Federal Deposit Insurance Corporation (FDIC).

Before this, bank failures had resulted in financial disaster for many depositors. Many communities in which financial institutions had failed were left without viable banking facilities.

Both of these were remedied by the establishment of the FDIC. Depositors are now protected up to $100,000, and banking facilities are assured even if the bank is insolvent.

Bank losses are now subsidized by the taxpayers. The recent bank defaults have substantially increased the already exploding federal deficit.

This FDIC protection is all to the good, except for one thing: The taxpayers are not only subsidizing the depositors, they are also subsidizing corrupt and inefficient bank managers. Nevertheless, the FDIC has more positive than negative characteristics.

Now that there is a massive shift from bank deposits to mutual funds in an attempt to chase higher yields, we find that many depositors are no longer as much in need of bank insurance as they are in need of federal insurance for mutual funds which are often volatile and highly sensitive to interest rate changes.

I hate to think how devastating to the economy it would be to federally protect mutual fund investors (many former bank depositors) by establishing a Federal Mutual Fund Insurance Corporation (FMFIC).

John R. Cowley


Unsound Congress

Regarding Leon Peace Ried's letter "Give Bill a chance" (Sept. 14), every new president needs support for his programs, particularly from members of Congress.

But in speaking of the "reactionaries," Mr. Ried failed to ask the most important question: Where were the 535 congresspeople when expenditures were inflating our deficit?

President Clinton is submitting programs that I believe fail to balance the budget, let alone reduce the national debt.

Mr. Ried put himself in the so-called "reactionary group" when he failed to mention Congress' role in approving programs that contribute to the deficit.

It is amazing to read so many letters blaming the president for deficits without mentioning the Congress. The president does not have the power to spend for programs that he wants without congressional approval.

Unfortunately, Congress fails to fulfill its responsibility to provide sensible fiscal policy.

James F. Macri


Care and treatment

Creators of President Clinton's health care program can receive a significant education in the requirements of the task by digesting Suzanne Gordon's cogent commentary in The Sunday Sun Sept. 12.

Her scholarly look into the roots of the words "treatment" and "care" makes interesting reading but, more importantly, comes to the crux of what is wrong with the health care some of us are lucky enough to have.

Living alone, I shudder to think of being sent home immediately after major surgery, as in the cases Ms. Gordon describes.

If, as she alleges, Western Europe and Canada pay attention to the "care" needed after "treatment," should we provide any less?

Sunny V. Robinson


Misnamed stadium

An item in the Sept. 12 issue of Parade magazine informed readers that the Francis Scott Key Foundation is sponsoring the construction of a park in Washington that will contain a statue of the author of the lyrics of our national anthem.

This reminded me that our political leaders responsible for naming Baltimore's fabulous public stadium chose the name of the commercially-owned baseball team, plus the name of an old railroad yard -- Oriole Park at Camden Yards.

Had they named it for Key -- or, even better, Star-Spangled Banner Stadium -- every game played there and broadcast around the country would have generated invaluable publicity for Maryland tourism.

Flying a reduced-size replica of that great banner at the park would have created even more publicity.

The nation's potential tourists need to know more about Baltimore's historic attractions, such as Fort McHenry and the Flag House. Alas, even in a very recent state-sponsored tourism ad, no mention was made of such nationally significant sites.

Gil Crandall


Stop for school buses

I've been involved with school buses for 30 years.

Over this span of time, I have seen the public become increasingly lax in obeying safety laws that require the driver of a car to stop when the lights of a school bus are flashing.

Not a week goes by that one of my drivers does not report a near-accident because of some automobile drivers totally ignoring the flashing lights of a school bus.

Parents, please speak to your children about boarding and exiting their buses. Tell them that they should not rely on the bus's lights to stop all traffic. For safety's sake, they need to look both ways before they cross any street.

School buses are painted yellow for a reason -- to remind us to exercise great caution around them. Let us remember that message.

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