Everyday People

The New York Times reports on the unprecedented nature of a major financial crisis arising toward the end of a presidential campaign. As the Treasury secretary and the chairman of the Fed brief each candidate daily, their responses are telling: Barack Obama consults daily with his financial advisors to develop a measured response that protects taxpayers, John McCain lurches daily from one contradictory position to another: 

On Tuesday, Mr. McCain said he would oppose a federal bailout of the insurance giant American International Group, only to endorse it as unavoidable the next day when the Federal Reserve took over A.I.G. to prevent its losses from infecting other financial institutions. Also on Tuesday, Mr. McCain proposed a “9/11-style commission” to study the problem and recommend solutions for the long term, then switched Thursday to propose the creation of a government agency as soon as possible.

It's easy to poke fun at McCain (see cartoon above), but there's a deeper theme at work, namely that this is a panicky reaction from a guy who doesn't know what he's doing. His sudden conversion to government regulation of financial markets has all the credibility of George Bush announcing progress in Iraq. It's also instructive that McCain didn't even express concern (remember the fundamentally sound economy of last week) until there was a demonstrable impact on major investors. But between mortgage foreclosures and tightening credit, everyday people have felt the pain for months now. Demanding that Bush fire SEC chair Christopher Cox might feel good, but what qualifications does McCain want a potential replacement to have? We're watching the presidential candidate of a major party lash out, hope that he hits something, and that if he does it will make everyone feel good. This is a governing philosophy?...

In truth, the macro solution to all of this is simple enough: Pay our bills and reinstate the Glass-Steagall constraints on the banking and finance markets. Assuming they have the will to do so, both candidates can muster popular support for the latter, although Obama can go about it with more credibility. But who has the courage to tell the truth about the former? Of course, we'd have more money as a nation were we not pouring billions of dollars a month into the gluttonous maw of Iraq...

Helen Thomas, octogenarian, reporter, and national treasure, continues to write with the boldness of youth. Here, she sums up the McCain-Palin ticket with insight and perspective and--- as usual -- without mincing a single word:

"In accepting the nomination as veep, she [Palin] invoked the greatness of President Truman, based on their small-town origins. But anyone who was around during Truman's era knows there is a world of difference between Palin and Truman. Take, for example, humility..."

Obama is more suited than Hillary Clinton to address regulatory needs: Bill Clinton signed the Gramm-Leach-Bliley Act, which is at the regulatory root of this mess, into law...

Premium T. and I light out to the east coast for a few days, to visit my father in Maine and take in the sights and sounds of NYC. I doubt we'll have internet access in Maine, so we'll be reporting next from the Big Apple!

Friday's Choice: Sly & The Family Stone perform "Everyday People":