Tuesday, September 16, 2008

Its the economy...stupid!


Volcker said at a Sept. 5 banking conference in Calgary that the U.S. financial system is broken and may contribute to the weakest expansion since the 1930s. [1]

By Terry Bankert http://goodmorningflint.blogspot.com/
Above Longer article , mostly research so you can draw your own conclusions, with citations, short summery below at http://flinttalk.com/viewtopic.php?p=36162#36162
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REFLECTIONS: Can we allow our middle class to slip away? Experts say our financial markets are broken. Who do you want in charge to fix it. The party that has broken us, Republicans? Some say our financial systems are imploding. If you have rotten garbage in your house you put it out. The republicans must be put out. Obama has long urged a modernizing of the financial system. What is understood is that protecting our financial markets with governmental regulation and intervention is a necessity. Irresponsible republican deregulation and lack of oversight has let the fox into the chicken coop. We shall most certainly suffer with out leadership. Bush 3 and thumper cannot offer meaningful financial leadership for America. The answer is Obama/Biden.[trb]
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OUR FINANCIAL SYSTEM IS BROKEN If many voters are fuzzy on the events that over the weekend forced Lehman Brothers Holdings into bankruptcy and Merrill Lynch & Co. to be swallowed by Bank of America, the continuing chaos among the most venerable names in American finance — coming on top of the recent government seizure of mortgage giants Fannie Mae and Freddie Mac and the demise of the Bear Stearns — has stoked their anxiety for the economy, the foremost issue on voters' minds.[5]

USA FINANCIAL SYSTEMS ARE IMPLODING: GEORGE BUSH HAS DESTROYED AMERICA AND MCCAIN IS HIS NUMBER ONE CHEERLEADER. The U.S. banking crisis is shaking up the presidential race as well as the agenda of the next president, forcing both candidates to confront a financial calamity.[2] Obama said McCain "doesn't get what's happening between the mountain in Sedona where he lives and the corridors of Washington where he works." [5] But the Democrats repeatedly tried to bring voters back to their core message: that the economy was in serious trouble after two terms under President Bush and that McCain would continue Bush's policies. "Ladies and gentlemen, I could walk from here to Lansing, and I wouldn't run into a single person who thought our economy was doing well, unless I ran into John McCain," Biden said during a campaign stop in Michigan. [6]

OBAMA HAS A PLAN Obama has long urged a modernizing of the financial system. He called for it in a speech at NASDAQ a year ago and outlined a plan for an overhaul of Wall Street regulations in March.[4] In March 2007, however, he warned of the coming housing crisis, and a year later in a speech in New York he outlined six principles for overhauling financial regulation.[5]

OBAMA HAS SPECIFICS, MCCAIN ONLY GENERALITIES Obama set out his general approach to financial regulation in March, calling for regulating investment banks, mortgage brokers and hedge funds much as commercial banks are. And he would streamline the overlapping regulatory agencies and create a commission to monitor threats to the financial system and report to the White House and Congress.[5]

IT’S THE ECONOMY STUPID, Y’ALL BETTER HAVE A PLAN....NOT A PALIN... A PLAN. As Wall Street's financial crisis deepens, presidential candidates Barack Obama and John McCain are looking to some of the nation's top economists for advice. [1]

THE ONLY PLACE TRICKLED DOWN HAS WORKED IS IN A CRAP HOUSE Obama yesterday held a phone call with one-time Treasury secretaries Robert Rubin and Lawrence Summers, who won praise a decade ago for helping avert other potential meltdowns, and former Federal Reserve Chairman Paul Volcker, credited with halting the raging inflation of the late-1970s and early-'80s. [1] Sen. Obama singled out the Bush administration's deregulatory push for what he described as "the most serious financial crisis since the Great Depression." While Sen. McCain wasn't at fault, he said, "I do fault the economic philosophy he subscribes to...one that says we should give more and more to those with the most and hope that prosperity trickles down."[2]

MCCAIN HAS BEEN WRONG ALL ALONG But his record on the issue, and the views of those he has always cited as his most influential advisers, suggest that he has never departed in any major way from his party's embrace of deregulation and relying more on market forces than on the government to exert discipline.[5]

DEREGULATION OF THE FINANCIAL MARKETS IS THE PROBLEM (MCCAIN)...he has consistently characterized himself as fundamentally a deregulator and he has no history prior to the presidential campaign of advocating steps to tighten standards on investment firms.[5] (MCCAIN)He has often taken his lead on financial issues from two outspoken advocates of free market approaches, former Senator Phil Gramm [5] In early 1995, after Republicans had taken control of Congress, McCain promoted a moratorium on U.S. regulations of all kinds. He was quoted as saying that excessive regulations were "destroying the American family, the American dream" and voters "want these regulations stopped." The moratorium measure was unsuccessful.[5]

FROM THE ASHES MCCAIN TURNS TO DADDY McCain on Saturday talked with Harvard economics Professor Martin Feldstein, a onetime adviser to President Ronald Reagan, Stanford University economist John Taylor and former Hewlett- Packard Co. Chief Executive Carly Fiorina. [1] These advisers are helping shape the messages of Democrat Obama and Republican McCain, as the latest upheaval in the financial markets and the credit crisis begins to crowd out other issues on the campaign trail. [1]

MCCAIN HAS NO PLAN. “On just about every economic issue, there is not a dime’s worth of difference between John McCain’s proposals and what we have right now. In 19 months, he has not named one thing he would do differently from this administration on the central issue of this election, not one thing.[3]

... BIDEN ON MCCAIN Joe Biden threw his hardest punches yet at John McCain on Monday, linking the Republican presidential candidate to the economic policies of the Bush administration, describing him as out of touch with middle-class Americans and claiming he is in the pocket of big oil and other corporations.[7] “John McCain doesn’t seem to understand what middle-class people are going through today,” Biden said at a campaign stop. “I don’t doubt that he cares. He just doesn’t think that we have any responsibility to help people who are hurting.[7]

TWO DECADES OF DEREGULATION AND REPUBLICAN RULE HAVE OUR COUNTRY ON THE BRINK OF A DEPRESSION. TIME FOR THE MIDDLE CLASS TO RISE UP ``You won't be able to get the economy moving again, create jobs, without fixing the mess in our financial system,'' said Obama economic adviser Jason Furman. [1] McCain ``has been calling for some time for a focus on the economy,'' Fiorina said in an interview. [1]

WE DO NOT CARE WHO SEES THE FIRE FIRST. WHO IS GOING TO PUT IT OUT IS WHAT WE CARE ABOUT Both campaigns argued that their candidate was first out of the gate in warning of the credit crisis, which led to the bankruptcy of Lehman Brothers Holdings Inc. and the sale of Merrill Lynch & Co. to Bank of America. [1] Power to the Fed [1] Obama's advisers point to a March speech in New York, in which he called for giving the Federal Reserve greater supervisory authority when it acts as a lender of last resort, strengthening the capital requirements for financial companies and streamlining the collection of overlapping regulatory agencies that oversee Wall Street. [1] ``The main thing we're advising is the ideas he laid out as long as three years ago and as recently as March of this year are still the right ones to deal with our financial problems,'' Furman said in an interview. [1] In a March speech on financial-market overhaul, Sen. Obama called for extending commercial-banking regulations to investment banks, hedge funds and mortgage brokers. He called for a commission that would monitor threats to the financial system. He said deregulation that culminated in 1999 with a partial repeal of the 1930s' Glass-Steagall Act, which had separated investment banks and commercial banks, had been driven by lobbyists and was intended primarily to facilitate mergers.[2] "I certainly don't fault Senator McCain for these problems, but I do fault the economic philosophy he subscribes to," Obama told several hundred people who gathered for an outdoor rally in Grand Junction, Colorado.[5]

MCCAIN HAS A PALIN... BUT NO PLAN, ...THE THUMPERS CANNOT HELP YOU WITH THIS ONE JOHNNY Adviser Fiorina said McCain would address the situation by ``making sure that it never happens again.'' [1]McCain is offering no specifics.[trb]

OUR COUNTRY HAS BEEN HOODWINKED INTO THINKING THAT THE REPUBLICANS KNOW HOW TO HANDLE MONEY. Obama, 47, an Illinois senator, yesterday said Bush's policies have caused ``the most serious financial crisis since the Great Depression'' and called for ``modernizing'' regulations, at a rally in Grand Junction, Colorado. [1] `Clean Up Wall Street' [1]

MCCAIN SAYS WE WILL BE GOOD FROM HERE ON ..PUT US BACK IN POWER...PLEASE McCain vowed to ``clean up Wall Street'' and ``replace the outdated, patchwork quilt of regulatory oversight,'' at an event in Jacksonville, Florida. ``We will never put America in this position again,'' he said. [1]

POLITICAL DEAMENSHIA SPELLED MCCAIN The Arizona senator, 72, told several thousand supporters that while these are difficult times, ``the fundamentals of our economy are strong.'' That prompted the Obama campaign to call the Republican nominee ``out of touch.'' [1]

THE REPUBLICAN PARTY WILL BE THE FIRST POLITICAL VICTIM, WE NEED A BIG BROOM AND A CLEAN SWEEP The fallout from the financial markets is dominating the presidential race as Americans look to the candidates for solutions after Lehman, the fourth-largest U.S. investment bank, filed for bankruptcy yesterday. The company lost 94 percent of its market value this year. [1]

HEY REPUBLICANS ....THIS IS WHAT LESS GOVERNMENT GETS YOU AFTER INADEQUATELY FUNDING THE AGENCIES TASKED WITH PROTECTING OUR ECONOMY.... I BET CHENY HAS MOVED HIS MONEY OFFSHORE Neither Obama nor McCain has offered specific fixes. And the two campaigns are using similar language to blame regulators and the banks themselves for the mess. [1] That may stem from a view shared by their advisers that the situation may worsen and that it would be hard for the government to stay on the sidelines. [1]

WE ARE IN A TIME LIKE PRE-DEPRESSION Rubin, in a Sept. 10 television interview with Charlie Rose, called these times ``probably the most complex and difficult since the 1930s in the financial markets.'' [1]

GOVERNMENT INTERVENTION ONLY ALTERNATIVE He said for the next year and a half ``we could be in a highly proactive mode'' on public policy. ``We should do whatever seems sensible and also accept undesirable side-effects if necessary in order to try to promote better economic conditions,'' he said. [1]

IF YOU RIDE THE WAVE YOU CRASH INTO ROCKS Summers, another Obama adviser, said in the same interview that the situation ``isn't something we can ride out with the hope that somehow, in a deep sense, the fundamentals are strong.'' [1] He said there will likely need to be ``more active interventions in the financial and housing markets than we've seen.'' [1] System Is Broken [1] Volcker said at a Sept. 5 banking conference in Calgary that the U.S. financial system is broken and may contribute to the weakest expansion since the 1930s. [1] Some McCain advisers also foresee greater government involvement. [1] Feldstein, in an Aug. 26 Financial Times column, warned that ``the risk of a downward spiral of house prices is the primary danger facing the American economy.'' [1] He proposed a federal program of ``mortgage replacement loans'' to provide financial incentives that would stop defaults among those who still have positive equity but face further price declines. [1] Kenneth Rogoff, former chief economist of the International Monetary Fund and now a Harvard professor, said the crisis ``had to happen'' because the financial system was ``bloated and overgrown and reckless to some extent,'' in an interview published Sept. 15 by Der Spiegel.[1] If the system continues to ``implode,'' he said, ``it's going to be very difficult for the Fed to step back and let all the banks go under. They're clearly going to have to throw taxpayer dollars in.'' [1]

WHO ARE YOU VOTING FOR? So when you walk into that voting booth in 50 days, ask yourself, Can your family afford to take a chance on an economic policy that offers $200 billion in tax breaks to the biggest corporations, including the oil companies, but not one penny of relief to more than 100 million Americans? ... [3] Biden condemned what he said was "a culture in Washington where the very few wealthy and powerful have a seat at the table and the rest of us are on the menu."McCain's economic programs are virtual copies of Bush's, he charged. "If you're ready for four more years of George Bush, John McCain is your man," Biden said. [6] McCain, who has voted with Bush 90 percent of the time, would offer more of the same, Biden said.[7] “Just as George Herbert Walker Bush was nicknamed ‘Bush 41' and his son is known as ‘Bush 43,’ John McCain could easily become known as ‘Bush 44,’” he said.[7]

Posted here by Terry Bankert 9/16/08
[1] http://www.bloomberg.com/apps/news?pid=20601103&sid=ajMl5w.sSXGo&refer=us
[2] http://online.wsj.com/article/SB122151017079138227.html?mod=googlenews_wsj
[3] http://www.nytimes.com/2008/09/16/us/politics/16words.html
[4] http://www.reuters.com/article/marketsNews/idUSN1536198820080916
[5] http://www.iht.com/articles/2008/09/16/business/16record.php
[6] http://www.baltimoresun.com/news/nation/bal-te.candidates16sep16,0,24366.story
[TRB] Comments of Terry Bankert to include unattributed cap headlines http://attorneybankert.com/
[7] http://elections.foxnews.com/2008/09/15/biden-calls-mccain-out-of-touch-with-middle-class/


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