With the collapse this week of a dubious plan to resurrect three of the state's financially comatose savings and loans, the longest-running comedy in Maryland's history is set for another extended engagement.
In many respects, the five-month attempt to resolve the state's savings and loan crisis has been a comedy of errors.
But, for the thousands of depositors whose funds have been frozen in the process, it has become an expensive tragicomedy.
It promises to get worse unless the script -- the product of politics, bureaucratic bungling and a penchant for quickie solutions -- undergoes some immediate and drastic revisions.
Even if the state succeeds in reviving flawed deals with New York banking giants Chase Manhattan Corp. and Citicorp to take over some of Maryland's S&L basket cases, cleaning up the savings and loan mess will require a much more comprehensive approach to solving a pervasive problem.
The governor has convened yet another special session of the General Assembly to deal with the protracted crisis. Legislation to be considered is as narrow in focus as the agenda that was placed before legislators in an earlier special session.
The current session was convened ostensibly to approve a plan for out-of-state banks to purchase troubled Maryland S&Ls and convert them to full-service banks.
But now that the Chase deal has apparently collapsed and Citicorp's plans to acquire First Maryland Savings and Loan have gone sour, the General Assembly is set to muddle through another series of quick-fix, ill-defined plans for resolving the crisis.
By allowing the problem to drag on for so long, Gov. Harry Hughes and other state officials have allowed it to become much more than an S&L crisis.
Indeed, it has become an economic crisis for the state. Regardless of the outcome, taxpayers will have to bear part of the burden which was created by mismanagement, possible criminal actions and shoddy regulatory standards.
In the meantime, small businesses, individuals and families with deposits frozen in S&Ls are piling up debt.
And finally, spending for goods and services in the state's economy has been curtailed to some extent by the limited ability of depositors to gain access to their funds.
The Hughes administration's deal with Chase supposedly would have freed $500 million in deposits and reduced the losses the state would incur if a buyer for the three S&Ls is not found. The $25 million Chase would have received as part of the deal was said to be a small price to pay, but nagging doubts in the Senate blew the deal apart. And now we have a futile exercise in finger-pointing in Annapolis.
Senate President Melvin A. Steinberg is being made the scapegoat for torpedoing the deal, but Chase's $25 million package unraveled last week as senators began to ask questions that were never answered to their satisfaction.
"The Chase deal makes me nervous," a member of the Senate confided a week ago. "I'm worried that the taxpayers will get a raw deal. You have $40,000-a-year government employes negotiating with sophisticated bankers."
Other senators and some S&L executives worried about a possible windfall that stockholders of some associations might receive in connection with a purchase by Chase and Citicorp.
And now as they try to deal in a limited way, some members of the Assembly are expressing regret over having failed to attack the problem on a broader front earlier.
"Hindsight is 20-20, but if we hadn't tried to do everything in one day in the previous special session we probably would have saved $100 million," one senator lamented.
In truth, state officials probably did too much and too little before fashioning the deals with Chase and Citicorp.
In the first place, the governor and his advisors made a critical mistake when they decided in May that the state would replace the private S&L insurance agency that guaranteed the deposits in state-chartered associations.
"We really didn't know what we were guaranteeing," a state senator recently confessed.
Maryland retains nearly $200 million from the private deposit insurance fund and has authority to borrow an additional $100 million.
Typically, the Federal Savings and Loan Insurance Corp. shuts down a failing S&L at the close of business on Friday and on Monday pays off any depositors who still fear their money isn't safe.
By following a similar procedure when two Maryland S&Ls reported disastrous financial problems in May, the state might have merged them into bigger, stronger associations with a guarantee of financial assistance without causing depositors to panic.
The governor could have restored confidence and stopped the run on all S&Ls by taking those steps in conjunction with a strong public statement assuring depositors of the troubled institutions that their money had been transferred to financially sound institutions.
That's still possible if the governor is willing to bite the bullet.