As John points out below, John McCain has released a commercial on the economy. The ad is titled "Enough is Enough." Did I miss the memo that says whichever candidate says this cliché the most times automatically wins? The video and the text follow:
JOHN MCCAIN: The economy is in crisis. Enough is enough. I'll meet this financial crisis head on.
Reform Wall Street. New rules for fairness and honesty. I won't tolerate a system that puts you and your family at risk.
Your savings, your jobs … I'll keep them safe.
ANNCR: Experience and leadership in a time of crisis.
On a related note, McCain has suggested that we form the equivalent of the 9/11 Commission to inquire into how this mess came about. Big hint to any future commissioners: It happened primarily because we have a free market economy! I like this idea a little better than the commercial because I guess it's a theoretical possibility that the Commission could conclude that in a free market economy, stuff happens. Yes, it's more likely that the commissioners will suggest a ghastly equivalent of Sarbanes/Oxley for the banking industry, but you know me - I love hope. By the way, if you like what's happened to your home prices the past 18 months or so, just wait until the government gets around to strangling home demand by making credit even tougher to come by. You'll love that.
For his part, Senator Obama showed his trademark ignorance of even basic history and absolutely no hint that he understands what's happening on Wall Street. (He was probably absent the day they taught mortgage backed securities at community organizing school.)
Obama rejected McCain's call this morning for a national commission modeled after the bipartisan panel that investigated the 9/11 attacks as a desperate ploy, labeling it "the oldest Washington stunt in the book."
"You pass the buck to a commission to study this problem," Obama said, rejecting the measure as unnecessary. "We know how we got into this mess. What we need now is leadership that get us out. I'll provide it. John McCain won't."
Obama sought to burnish his credentials as a leader who could face tough crises and make deadline decisions. "History shows us that there is no substitute for presidential leadership in a time of economic crisis. FDR and Harry Truman didn't put their heads in the sand, and hand accountability over to a commission," Obama said. "Bill Clinton didn't put off hard choices."
The Illinois senator said that the events of the past few days have delivered "the final verdict on an economic philosophy that has completely failed." He compared the current crisis to the Savings and Loan failures of the 1980s, which he said resulted in risky financial gambles that failed and required massive taxpayer-funded bailouts. "Does that sound familiar?" Obama asked a crowd of 2,100 in Colorado.
But Obama demurred in endorsing a rescue similar to the Resolution Trust Corporation created in the aftermath of the S&L crisis to bring an end to the banking crisis. One of his top economic advisors, former Federal Reserve Chairman Paul Volcker, has been a leading advocate for a similar government led intervention to buy up and restructure mortgages.
Everyone says I shouldn't worry about Obama because he'll have smart advisors. His smartest advisor is probably Paul Volcker, but Obama is apparently perfectly comfortable ignoring his advice. Why? Because Barack Obama will provide "leadership." Who needs a knowledge of high finance when you have such magnificent leadership in the Oval Office?
The last several weeks of any campaign are bound to be a silly season. And I understand that knee-jerk populism from the candidates probably focus groups better than "stuff happens." My big concern is that neither candidate has the private sector experience to understand the most basic facts of our economy. In a free market economy, some market players will inevitably make mistakes. Big ones. Those market mistakes will lead to corrections. Painful ones.
Any discipline will come, indeed it must come, from market forces. Lehman Brothers went bankrupt yesterday. The last two men standing in Lehman's industry, Goldman Sachs and Morgan Stanley, surely took notice of this event. To say it is unlikely that they will repeat Lehman's errors is an understatement.
The political misunderstanding comes here - out of their arrogance and hubris, certain lawmakers think they can provide better discipline than the market. They can't. The best they can do is toss monkey-wrenches into the market that make it function less efficiently. For the purpose of this metaphor, please consider Fannie Mae and Freddie Mac T-Rex sized monkey-wrenches. The second best Washington can do is put hurdles in the market that the far more agile-minded people who work on Wall Street will glide over, but not without passing the expense of those hurdles onto consumers.
While McCain's commercial doesn't float my boat, the appeal for a Commission is at least serious. Let's pray he leaves it there. If you ask anyone on Wall Street about politicians and how they might relate to the current situation, they'll say the same thing - they'll make it worse. Barack Obama got a head start on that yesterday when he tried his best to whip up a panic. Fortunately, everyone knows Obama has no insights on the economy and dismisses any comments he might make on the subject as purely political.
What's happening on Wall Street right now is actually quite complex and delicate - simple slogans won't help, and knee-jerk demagoguery will hurt. Unless something more constructive occurs to them, I urge the campaigns to return to lipstick and pigs.
