A Brilliant Allegorical Work
The Fat Cat Sat on the Mat is a brilliant allegorical work about the financial crisis and Obama's approach to solving it. The witch represents the American voters, who love the rat (Obama). The fat cat represents (of course) the US investment banking industry. Typically the fat cat sits in a vat (securities industry), but for reasons not mentioned in the book the cat decides to go sit on the mat, which represents the real economy.
Adult readers know, of course, that the bursting housing bubble, subprime mortgage crisis and resulting credit crisis are what caused the investment banks to reduce lending and stop securitizing bad mortgage-backed securities, which had the effect of "sitting on" (stifling) the real economy. But that detail is complex, and unnecessary to explain in a book for young children. The salient points are:
1) The witch (voters) love the rat (Obama)
2) The cat (bankers) just sits in the vat (securitization) staring at the rat
3) The rat hates the cat (Obama hates the big bankers), and
4) The cat does not care
5) For some reason the cat decides to go sit on the mat (the real economy)
6) The rat doesn't like this and tells the cat to get off.
The rat (Obama) believes the mat (real economy) is his, and that is his justification for ordering the fat cat to get off. When the fat cat refuses, the rat gets the bat (congress) to come and tell him to get off. When that doesn't work the bat (congress) gets the hat (Fed Chief Bernanke and Obama administrators Treasury Secretary Geithner and FDIC head Sheila Bair) to coax the cat off with a bribe (the fish on a dish). The fish is, of course,
1) Easy monetary policy in the form of a miniscule Fed Funds rate (cost of banks to borrow), and
2) Absurdly lenient stress tests showing that most banks are "well capitalized", despite their big wads of bad securites they held
3) Continued government support of Fannie and Freddie and FHA who take over the money-losing businesses of guaranteeing and securitizing the bad mortgages, thereby supporting the bad securities still held by the fat cat
4) Creative financing (partnerships with hedge funds using taxpayer money) by FDIC of bad mortgage assets taken over from failing regional banks.
The fat cat is enticed by the fish (bribe), but he is too smart to get off the mat just to collect it. Bring it closer, he says. Just then, the witch's broom (representing the media) enters and flies around the room, causing the rat, bat, hat and fish to pile on top of the fat cat who is still sitting on the mat.
Next, the witch (voters) returns (allegorically, this will happen in November 2010). Because of the media coverage (witch's broom) it becomes clear to the witch that the fish (bribe to the fat cat) is in play and in fact all the actors (cat, rat, bat and hat -- even the fish!) are now sitting on the mat.
I will not spoil the rest of the story for you -- read it for yourself and see how it all turns out. An important point worth noting (I explored this point thoroughly with my 4-year-old son) is that the rat tries to use threats and bribes, not the power of law (SEC and Justice Department), to move the cat. Perhaps the rat and bat and hat do not feel they have a solid legal case against the fat cat? In that case, whose fault is it if the mat is getting crushed?
But I will tell you that this is a story with a happy ending. Let us hope the real voters in November act like the witch.
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