The Huffington Post perfectly captures the sudden shift in the campaign theme with its headline today: "Hello, Economy; Goodbye Lipstick." The silver lining to this very dark economic cloud is that this forces the political conversation back to the main issue, the one where McCain and the Republican's are most vulnerable.
This is not a time when you'd want to be defending the deregulation craze that contributed to this Wall Street freefall. And here's what Josh Marshall at TalkingPointsMemo says:
"Let me get this straight. John McCain's top economic advisor, former Sen. Phil Gramm, is the guy who authored the deregulation law that most agree is the ultimate cause of today's financial meltdown. Tomorrow's and probably next week's too. But let's not get ahead of ourselves. John Thain, CEO of Merrill Lynch, which swirled into brokerage oblivion today, is one of McCain's top economic advisors too. And now McCain says he's going to clean up the mess by putting in tighter regulations and oversight even though he's always supported lax oversight and his top economics guy is the one who loosened the rules in the first place."
It's going to take an awful lot of lipstick to disguise this pig.
Ralph
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I have to disagree with some of your conclusions.
"The silver lining to this very dark economic cloud is that this forces the political conversation back to the main issue, the one where McCain and the Republican's are most vulnerable."
While I hope this will get people back to thinking about the issues in the campaign, I don't agree that this is bad for Republicans. The Together, oops, Yes We Can, Just Words campaign of Obama is devoid of facts or actual positions and focuses on feelings and "Change". The basis of his campaign is "Vote for me because I am different from the other guy and the guy currently in the oval office". If the campaign does get reduced to the issues rather than the images, I'll put my money on the Repubs.
"This is not a time when you'd want to be defending the deregulation craze that contributed to this Wall Street freefall."
Based on the quote from Talking Points, I believe you were referring to the Gramm-Leach-Bliley Act as being responsible for the recent economic woes. Before I get into the act itself, remind me, did only Repubs vote for it? Who signed it into law?
As for the act itself, it allowed financial institutes to merge and offer diversified products to it's customers. This follows the basic principle that people tend to put their money into higher risk investments during good economic times and low risk savings accounts during bad economic times. In the past that meant changing institutions, now that can be done by calling your customer service rep and having him put it in another one of their account options.
Either way you do it (multiple institutions or one) you still need to do you research and make sound decisions with your money.
If you make a bad decision and don't do enough research, put your money in a company that is playing games with reporting their risk or you just ignore the risk, there is a level of personal responsibility that goes with that decision. Just like the old stories about someone trying to sell you the Brooklyn Bridge.
Weather you make your bad decisions with one institute or many, it is still a bad decision. No amount of government regulation would be able to eliminate people making bad decisions.
In my opinion, the failure of a large investment bank without a government bail out is getting back to classic, free market economics. One of the basic principles is that companies are allowed to succeed (or fail) based on the merits of their own actions with little to no government interference.
The bail outs of other banks has suspended that free market mechanism that would help people make better decisions by adding an element of fear into the decision making process. Too many people were simply investing in what some website or someone they knew was saying was a good deal without doing any of their own research. Now people may open their eyes and do research prior to investing. Thus, returning people to solid, free market economics and result in more informed investing.
I do not claim economic expertise, but professional economists tend to support Obama's economic proposals and support him for President.
In a recent survey of 532 members of the American Economic Association, 66% support Obama and 28% support McCain.
And on last Sunday morning TV, Alan Greenspand said McCain's economic plan won't work. He spoke strongly against borrowing money to cut taxes.
I believe you are referring to the "Dilbert Survey" [http://www.dilbert.com/blog/entry/dilbert_survey_of_economists/], please correct me if there is another survey I am not aware of. (As I said to my uncle in his post on the economy, links are very helpful when quoting things like this.)
Interesting survey, but biased from the beginning. For starters, 48% of the economists surveyed were registered Dems compared to 17% registered Repubs. Based on the latest info I am aware of (http://pewresearch.org/pubs/933/a-closer-look-at-the-parties-in-2008) registered voters break down as 51% dems to 38% repubs. Also, 65% of the economists work in academia. From the beginning the survey was dealing with a more left leaning crowd. All of the results broke down on the same 50-60% for Obama and 30% for McCain. That indicates to me that this was more based on politics then actual economics. Look at the break down by party affiliation, 90% of dems supported Obama and 89% of repubs supported McCain. Independents were almost even split.
As far as Greenspan [sic], what he said was that unless we cut spending we cannot afford the $3.3B of tax cuts that McCain has supported in his policy. And I agree with that, so lets cut out a whole crap load of government waste. Lets start with the welfare programs, move on to the postal service (unneeded in today's age of the internet and UPS), partially privatize NASA (throwing a COKE sign on the space shuttle should be worth a couple mil), reduce the size of government, etc. We should not cut taxes if it means increasing the national debt.
However, we should also not penalize corporations or individuals for succeeding. The "Windfall Tax" is just as stupid of an idea. We want to motivate people to succeed, not send the message that you should not do too good or else you will be viewed as the enemy and punished.
C'mon Jesse, maybe you think Dilbert is the epitome of intellecutal rigor, but I believe that's a minority opinion.
You have to know that this study is just as arbitrary as any other. A Democrat from the South, for example, is not the same as a Democrat from the North. There are a lot of conservatives registered as Democrats - my father is probably politically to the right of Jesse Helms, yet he'd be listed as a Democrat in any survey. That doesn't mean he's a liberal.
Unless you know how exactly the Dilbert guy he set up the protocols on this, this survey can't be presented as an accurate representation of Democratic vs. Republican opinions.
richard
Dick, Gramps identifies himself as an independent. However, I didn't say that the economist interviewed were "liberal" (you did), I said "left leaning".
As for the Dilbert Survey, Scott Adams, the creator of Dilbert and an outspoken libertarian, commissioned a survey of economists on the subject. In his own words:
"This summer I found myself wishing someone would give voters useful and unbiased information about which candidate has the best plans for the economy.
Then I realized that I am someone, which is both inconvenient and expensive. So for once I asked not what my country could do for me.
At considerable personal expense, I commissioned a survey of over 500 economists, drawn from a subset of the members of the American Economic Association, a nonpolitical group, some of whose members had agreed in advance to be surveyed on economic questions.
The results do not represent the economic association's position. The survey was managed by The OSR Group, a respected national public opinion and marketing research company."
You should still read the survey, it is pretty interesting. I think he has one coming where the same questions were asked of CEOs.
JK
Jesse,
My father has never been an independent in his life. He has always been extremely conservative.
As for OSR - who 'managed' the survey is less important than who was questioned for it. i.e. the American Economic Association.
You are aware that AEA's main publication, the American Economic Review, was edited by Ben Bernanke, before he was appointed by President Bush to replace Alan Greenspan as Chairman of the Board of the Federal Reserve?
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