In what seemed at first blush a weird collision between lowbrow Internet and high-n-mighty government agency, the Federal Depository Insurance Corporation has been busy doing damage control on a YouTube video.
That the FDIC is responding at all to something on YouTube is news in itself, illustrating how Web-based backlashes have grown in influence. Grass-roots Internet campaigns - or those that advertise themselves as grass-roots campaigns - are a throwback to the pamphleteering era of Thomas Payne, when anybody could post any handbill, true or false, and watch it feed the populist chatter.
For the record, the FDIC/YouTube commotion stems from this video, posted by Think Big Work Small, a California marketing company. It has two somewhat irate middle-age guys riffing skeptical about how the failure of IndyMac bank was handled by the FDIC. Under a resolution brokered by the agency, the bank's assets ended up in the hands of an outfit called OneWest Bank. The men in the video, both of whom are either polished salesman or character actors from a Hollywood extras agency, assert that the deal was too fishy by half and imply that Goldman Sachs and Friends were pulling the strings so as to benefit at the expense of taxpayers. The FDIC raised Cain about it last week and the video producers changed up the ending a little but left the primary message intact.
All of this could have been avoided had the FDIC been a little less clumsy and perhaps a little more in tune to the latent power of Internet-based backlashes. Reuters Breakingviews said it best: "Had the F.D.I.C. made an effort to explain the transaction at least on a par with the disclosure required of deals between companies with public shareholders, there would have been less fuel for public skepticism now. It doesn't help in the IndyMac case that the buyers were private equity firms, which have a reputation as being secretive corporate raiders. But for those representing taxpayers in such transactions, it shouldn't be hard to spot that the fullest possible disclosure is the best course."
Even Internet titans themselves can seem oddly unaware of the public-relations risk associated with taking too cavalier an attitude toward the masses. Shouldn't Google, for instance, have known that its followers wouldn't take well to the inherently intrusive character of Google Buzz, its Johnny-come-lately social networking tool? The company found itself hoisted on its own Web-savvy petard last week when it unleashed Buzz, which takes a Gmail user's e-mail contacts and shows them to the whole wide. It smacked of the big-brotherism Google has been accused of before, and thousands of columnists, bloggers and reporters jumped on it. The Palo Alto Daily News, to take one of the many examples, reported that an advocacy group called the Electronic Privacy Information Center had filed a complaint with the Federal Trade Commission alleging "a significant breach of consumers' expectations of privacy" by Google and that the Washington-based organization is asking the FTC "to require Google to make the Buzz service fully opt-in, to stop using Gmail users' private address book contacts to compile social networking lists, and to give Google users meaningful control over their personal data."
The paper noted that the filing came on the heels of a Google exec's blog that conceded "there's been concern from some people who thought their contacts were being made public without their knowledge." Some concern? Well duh.
Meantime, a movement called MoveYourMoney is urging consumers to quit patronizing the big banks and move their finances into community banks and credit unions. It has gotten little traction, gaining attention mostly from the relatively small followings at NPR and the Huffington Post. The hurdles MoveYourMoney face are ones of sheer practicality (people like the omnipresence of big-bank ATMs and branches) rather than, say, philosophy.
It's an effort that lacks critical mass but the fact that it is rooted in an Internet-based movement by definition nowadays makes it mainstream - and by no means weird.