After getting up at the crack of dawn today, I saw the headlines about Lehman, Merrill Lynch and AIG. Of course, we had a feeling news was coming of an economic meltdown after what happened with Fannie and Freddie, as well as Bear Stearns.
But when I heard this statement from John McCain, I had to wonder, “Which one of us is living in a delusional parallel universe?”
Our economic fundamentals are sound? I’m not sure what “fundamentals” he’s talking about, but I do know this — just because you say the sky is green doesn’t make it green. But I guess McCain thinks if he and his surrogates say it enough, we’ll believe it, even though I can hear squeaky bed springs all around the country as people are taking their money and stashing it under their mattresses.
Lots of pundits are attributing our economic problems to the sub-prime mortgage crisis. But I say it’s more than that. After spending over six years as an attorney at the Securities and Exchange Commission in the late ’90s and a little beyond, I can tell you that no matter what kind of leash, and no matter how slack that leash was that regulators tried to put on the banking and investment world, lobbyists and corporations won out more often than not. Yes, there are plenty of rules and guidelines on the books, but if they’re watered down and the agencies tasked with enforcing them don’t get the money for enough staff to be real watchdogs, then nothing will change to protect our bank accounts, our investment portfolios or our home mortgages.
Corporate cries of, “The expense of the regulation will be too costly and hurt investors!” and “Free markets are the best regulation!” won out time and again over the stories of investor after investor who had lost their savings precisely because there wasn’t enough timely oversight.
Those who managed large institutional interests too often were more Gordon Gekko than the Geico gecko.
As far as I can tell, we’re not going to be helped by the political rose-colored glasses McCain and his people seem to have slipped on. They might make things look good in the parallel economic universe he’s made for himself where he thinks all families look like his, with the cushion of millions of dollars in trust money he can comfortably sit on.
But for the rest of us, who are worried about whether banks are going to go under and whether the money we were all told would be safe in our long-term investments really will be, someone better find a way pretty fast to deal with that’s going on in this financial universe. No matter how cute or savvy that gecko is, he can’t solve all our money problems.
September 15th, 2008 at 2:08 pm
Hey, his economic advisor is Phil Gramm, after all. The Phil Gramm who told the United States that we were a “nation of whiners” because we were worried about recession. Also, the same Phil Gramm who apparently did a boatload of work on deregulation of the financial industry back in 1998, setting the stage for all this.
Also, Dubya said essentially the same thing a few months ago (remember Bear Stearns?), saying “the U.S. economy is fundamentally sound”. Nothing has made me more afraid than that, frankly…
September 15th, 2008 at 2:27 pm
When it finally implodes the Government (McCain’s or Obama’s) will only throw out the life rafts for the big players. The average person is going to be good and truly screwed.
I joke with my husband about how we are part of the first generation in which no one retires. Throwbacks to our great-grandparents era. But it is not a joke. The boomers will eat up whatever might be salvaged but our TSA’s, IRA’s, pensions SS or Medicare? Gone. Like the money that was deducted from our paychecks with the assurance that one day we would get a slice of the pie too.
In our country it is “of the people, by the people and for the good of the economy”.
It’s only going to get worse.
September 15th, 2008 at 3:07 pm
I just said the same thing to my husband anniegirl….. born in 1960 we are on the tail end of the boomer generation, and we are watching our IRA’s and 401K’s drop further and further, ensuring that we’ll be working for years longer than we had dared to hope. Somehow, I have more belief in Alan Greenspan’s sour outlook than McCain’s unrealistic positive one.
Interestingly enough, I hear Phil Gramm is still a key advisor to McCain, just not a publicized one. Makes me feel warm and fuzzy!
September 15th, 2008 at 3:36 pm
Amen Donna – I’m the same age as you (class of ‘78)! Yep those older boomers are bankrupting the country (j/k) but I don’t expect to retire and I don’t think others our age do either!
September 15th, 2008 at 3:43 pm
Can you give or point us to a “for dummies” explanation of what regulation does and why it helps? I would like to better understand and be able to explain this.
September 15th, 2008 at 5:17 pm
Is that the same Phil Gramm who said he came from the Plant Remulon?
I put more faith in Dennis Kucinich, who admits he has seen UFOs.
September 15th, 2008 at 5:18 pm
Oh dear, I meant PLANET Remulon!
September 15th, 2008 at 8:00 pm
www, If you go online and type in bank regulation and read the reference information under Wikipedia it gives you a pretty good outline for what financial regulations mean. Unfortunately, the last 6 – 8 years the regulations have loosened in the banking industry and mortgage industry and the whole Jenga structure is collapsing while we watch. People got greedy and wanted to make money in the housing boom, and there were plenty of unsavory mortgage lenders who were more than happy to peddle subprime loans to a lot of people who shouldn’t have qualified and probably didn’t understand 1/2 of the information in their documents.
Clearly there has been fault on all sides, but for McCain to stand on a stage today, and talk about how fundamentally sound our economic system in the United States is right now is really laughable. Obviously, he has nothing to worry about in his old age….. he’s already there, has great health care and has Cindy’s money to ensure that he never worries about being on a fixed income.
September 15th, 2008 at 9:33 pm
I agree wholeheartedly that we need to tighten our spending in Washington. Oddly, this often gets me labelled as a conservative.
I’d argue with, however, the assertion that McCain’s statement that the economy is “fundamentally sound” means the same thing as the economy is “good.”
September 16th, 2008 at 12:40 am
Great minds think alike! I just blogged about McCain living in economic “fantasyland,” then surfed on over to you referring to his “delusional parallel universe.”
At this point I’d take the gecko for President over McCain!
September 16th, 2008 at 8:40 am
Who knew we would all be nodding our heads in agreement with Alan Greenspan?
September 16th, 2008 at 8:43 am
WMW — without the regulators, banks and financial institutions who “trade” in mortgages and securities can do what they please with no accountability of consequences. Remember Gordon Gekko in the movie Wall Street saying, “Greed is good.” That’s what happens — no accountability and little investors lose out.
September 17th, 2008 at 4:36 pm
Oh, yeah. Our economy sure is a fundamentally sound place. That’s why the government (the government? that same entity that’s supposed to keep out of the free market?) is bailing out all these institutions? If the economy were fundamentally sound, they would NOT be throwing money at these giant corporations. They’d just let the free market do its thing, and it all would come out just fine, right? Because the economy is fundamentally sound.
How stupid does he think we are?
September 23rd, 2008 at 5:53 am
John McCain has already said that he will support Israel in an attack on Iran, and Sarah Palin (an Evangelical Christian)says she will support it for religious reasons. The new book on amazon.com “Clash of the Gods” discusses the frighening future of a religious war. Anyone who reads it will be educated in Middle Eastern politics and Israel’s ambitions…and not vote for McCain.