Harry Reid, Confidence Builder, Part II

(By Mark Hemingway, National Review Online) - A couple of weeks ago I took Harry Reid to task for coming out of a private meeting with Paulson and Bernanke and telling the press "They don't know what to do," recklessly undermining market confidence.

Well, he's done it again, only this time with real financial consequences. From CNN — "Insurers plunge on Reid's 'bankrupt' remark":

Several big life insurance stocks fell sharply Thursday, dragged down by jitters about their role in the credit crisis and fears sparked by a comment from Senate Majority Leader Harry Reid, D-Nev., Wednesday about a potential bankruptcy in the industry.

"We don't have a lot of leeway on time. One of the individuals in the caucus today talked about a major insurance company. A major insurance company — one with a name that everyone knows that's on the verge of going bankrupt. That's what this is all about," Reid said prior to the Senate's approval of the $700 billion bailout bill.

Steven Schwartz, an analyst who covers insurance companies for Raymond James & Associates, said that even before Reid made his bankruptcy comment, investors were growing worried about life insurers' exposure to real estate as well as "secondary exposure" via investments in troubled finance firms like Lehman Bros, Wachovia and Washington Mutual.

But the comment from Reid clearly caused even more fear. "Harry Reid didn't help any," Schwartz said.

With markets on edge right now, Reid really needs to learn to be quiet about such matters.