I have seen a number of people around the blogosphere today saying that the Washington Mutual Bank has “failed”, and even that this is like being back in the Great Depression. Well, no.

I had a few thousand dollars in WaMu (much of it owed to the British government in taxes I will get billed for eventually). I’ve been watching the bank with concern for some months, but Kevin assured me that I didn’t need to take my money out because it was FDIC insured and I’d need to have much more cash than that deposited before I would be at risk of losing anything. And so it turned out, because WaMu has not failed. It was ordered to sell itself to another bank before it could fail. If it had failed, as banks did in the 1930s, I would have lost all of my money. As it is, the bank is still in operation, and I actually withdrew a fair chunk of cash today in the form of payments on my credit cards.

I find it rather odd that some of the same people who are calling for regulation of the financial sector in the face of the current crisis are also completely misrepresenting what has happened to WaMu. The FDIC system, after all, was set up after the Great Depression precisely to prevent things like that happening again. And in this case it has worked. Maybe people just don’t understand what has happened. But you know, if there was a car crash and the seat belts kept everyone safe then hopefully people would be saying what good things seat belts were, not going on about how there was a car crash and everyone died.