The money market bank run that maybe wasn't

Rep. Paul Kanjorski's alarming numbers don't hold up after a closer look.

By Salon Staff

Published February 13, 2009 5:29PM (EST)

On Tuesday, I posted the now-notorious Kanjorski video, in which the Democratic congressman from Pennsylvania made some rather alarming statements about a supposed money market bank run last September. I probably should have been more skeptical than simply noting that the numbers quoted by Kanjorski didn't jibe with what the New York Times had contemporaneously reported.

Felix Salmon took a more careful look on Wednesday and concludes "that there never was a $500 billion outflow from any asset class in the space of a couple of hours or even weeks, and the Fed never shut down or froze any money-market accounts."

On Thursday, Politico's Ben Smith, from whose blog I had originally learned of the video, added "a fairly serious note of doubt" when he asked Kanjorski's spokeswoman for the source of the congressman's allegations, but received only a pointer to an anonymously sourced New York Post article, "Almost Armageddon."

After spending quite a few hours watching U.S. senators and representatives in action this week, I should know better than to assume that anything they say has much of a relationship with reality, but one does die a little, inside, when one realizes that the chairman of the House Capital Markets Subcommittee has, at best, a slender grasp of recent financial market history.


Salon Staff

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