"The Obama campaign routinely tweaks John McCain for having argued that the "fundamentals of our economy are strong." Last week, the Washington Post's Jonathan Weisman criticized Obama for using the line, insisting that the quote is "months old."
Except, it's not. This morning, in the midst of a genuine crisis on Wall Street, John McCain once again touted the underlying strength of the economy:
"You know that there's been tremendous turmoil in our financial markets and Wall St. And it is -- people are frightened by these events. Our economy, I think still -- the fundamentals of our economy are strong. But these are very, very difficult times."He really, really doesn't get it. Or he's just saying it to make people feel better so they'll vote for him. Either way, it's sad and shameful.
Addendum: let me modify my assertion - McCain does have some experience with financial turmoil like this. I had forgotten about his involvement with the Keating Five. As noted by Joe Klein of Time Magazine...
He was a member of the Keating Five. This was the signature scandal of the Savings and Loan crisis, twenty years ago. It concerned the insider help that five Senators gave Charles Keating and his Lincoln Savings and Loan, in return for contributions and gifts. The deregulation of S&Ls--community banks dedicated to local mortgages (like George Bailey's bank in "It's A Wonderful Life")--enabled slick operators like Keating to make reckless loans in new areas where they had no expertise. The final tab to the taxpayers was $165 billion.
How about trying to reassure the public so we don't have a run on every bank... well those that are still open, anyway
ReplyDeleteI agree with Mr. Baker. The volatility of our financial markets needs a leader...not an accuser. Of course, realistically both parties are just as much at fault. The Democrats encouraged banks (during the Clinton Era) to make loans to unqualified people, while the Republicans sat back and expected the market to police itself. Sounds like a bad case of the dumbs from both sides.
ReplyDeleteBrian, I'm not particularly interested in assigning blame to any individuals or political parties. I'm cynical enough to believe that the Democrats and Republicans are two faces of what amounts to one "party."
ReplyDeleteMy present concern is rather with the tendency of public officials (Mr. McCain in this instance) to mislead the public by saying "everything is fine, nothing to see here, keep moving along." During the Republican debates the candidates were asked about the economy and they all said it was strong ... except for Ron Paul, who was branded a kook for expressing doubts in this regard.
The American public should be told by someone with cahones that the economy is in bad shape, that financing for loans will be increasingly hard to find, that employment will be weak, that gas prices are down only because demand has plummeted. They should be told that hundreds of banks are going to fail. We're heading for a depression the likes of which most people under age 80 have never seen.
I suppose that's a possibility, though frankly I find a looming depression unlikely. The US has experienced actual growth (granted, it was minuscule)the last two quarters. Additionally, the drop in fuel prices will give consumers additional funds to spend elsewhere, while new habits for mass transit and fuel use are being formed. As the stock market tumbles new investors as well as old ones will start to snatch up undervalued stocks, knowing they will return to decent values. This will occur while a weak dollar encourages business to bring employees back to the US, saving shipping and overseas costs.
ReplyDeleteI'm certainly not rich. I make under 50k a year. As one of my own recent blog threads talked about, I balance my own budget and I expect the government to as well. I don't owe anything on credit with the exception of my mortgage, something I think ALL Americans should strive for. But all in all, my own financial situation is better than it was two years ago, or five years ago, or eight years ago.
Fuel prices going down, slow but consistent growth, worsening economies overseas, and under valued stocks spells opportunity...not financial ruin.
That said, I still am demanding that McCain and Obama pledge to balance the Federal Budget ASAP. No matter what, I have to be happy with President Clinton and his Congress at doing just that...then they went and had to screw it up.
By the way, I love your blog. It's interesting and it keeps me on my toes.
Here's the assessment from Alan Greenspan (he should know about these things because he helped get us into this situation...):
ReplyDelete"Former Federal Reserve Chairman Alan Greenspan offered a woeful outlook of America's economic situation on Sunday, saying the crisis with the country's financial institutions was as dire as he had ever seen in his long career, and predicting that one or more of those institutions would likely collapse in the near future.
Oh, by far," Greenspan said, when asked if the situation was the worst he had seen in his career. "There's no question that this is in the process of outstripping anything I've seen and it still is not resolved and still has a way to go and, indeed, it will continue to be a corrosive force until the price of homes in the United States stabilizes."
Brian, I'm impressed by (and almost envious of) your optimism and enthusiasm. I agree that things will eventually turn around, but that inflection point may be YEARS in the future.
ReplyDeleteAs stocks fall, people may "scoop them up," but as Bear Stearns and Lehman investors have discovered, stocks often double on their way to zero. The Dow is still at 11,000 - it could easily go to 8,000 or 6,000. Easily. I was actively and extensively invested in the market on Black Monday in 1987, when the Dow fell 20+% in a single day.
Houses are still way overvalued based on historic trends and timelines. They could fall another 20%. If/when prices seem to stabilize, all the houses that are being held off the market now will flood back on, and the price decline will resume. Many homeowners will be like the proverbial jackass in a hailstorm - just have to "hunker down and take it."
I don't envy McCain OR Obama when one of them takes over as President. You may want them to balance the budget, but they can't. Absoutely can't. Fixed expenditures for healthcare, social security etc plus war costs make it impossible.
Enough for now. I think I'll post about Centaurs...
Okay, I yield. After today's headlines I consent that we're screwed.
ReplyDelete