This round goes to McCain.
If we are really facing a “once in a century crisis”; if financial institutions will begin to fail at the beginning of next week should Congress not act; if this is the worst economic crisis since the Great Depression, a legitimate economic calamity; then McCain’s decision to suspend his Presidential campaign, halt fundraising activities, freeze political advertising, is spot on.
At a moment when Paulson and Washington are asking for carte blanche to spend $700+ billion of our money bailing out Wall Street’s fat cats and bad habits, McCain throws himself in front of the bus.
It’s the economy stupid. At this moment, nothing else is more important.
Remember April 11, 2007, when John McCain was losing the Republican primary race? His candidacy wall all but irrelevant and said, “I would rather lose a campaign than a war.” This is a man who is unafraid of risking everything to do the right thing. Now he wins the confidence of Americans who were wondering if he contained the economic viability to match his foreign policy stripes.
Obama says the president must be able to multi-task, to handle multiple crises simultaneously. Fair point. But if we are to believe our economic leaders, or Obama supporter Warren Buffet, who says this is an “economic Pearl Harbor”, then we don’t want to hear them gab about foreign policy right now. Rarely does a President confront this scale of a financial crisis. Put off the foreign policy debate for a week until this crisis passes.
South Carolina Senator Lindsey Graham, a McCain supporter, had the best critique of Obama’s decision to continue with the foreign policy debate. Graham explained that if a President were abroad visiting with foreign leaders when the national economy collapsed, he/she would rush back to Washington and address the crisis, rather than continue visiting with foreign leaders abroad. Presidents must be able to walk and chew gum, but they also must prioritize crises and act accordingly.
Each candidate must inspire confidence that he can handle the crisis, rather than talk about foreign policy this Friday. By insisting on the national security debate, Obama risks looking seriously out of touch. McCain will look like the economically empathetic, action oriented leader, while Obama gabs about issues that, while important, aren’t in touch with the American public’s deepest momentary concerns: solving the financial crisis.
By the way, McCain isn’t saying cancel the foreign policy debate—he’s saying do it later. A bonus strategic point here- this debate was stacked in McCain’s favor as national security is McCain’s strength, Obama’s weakness. If it’s postponed, McCain will have his favored debate later, closer to the election and fresher on electorate’s collective memory.
September 25, 2008 at 4:30 pm
Great points, Margaret. Let us not forget that Obama himself said, “we are in the most serious financial crisis in generations…”. As someone else has said…many financial experts have compared this to a financial 9/11. Obviously a clear crisis.
If President Bush, on 9/11 wasn’t focusing his full attention on the terrorists’ actions, do you think there would have been outrage?? Of course there would have been. Multi-tasking is one thing, prioritizing is another. Perhaps this is another example that Obama’s priorities are askew??
September 25, 2008 at 8:14 pm
Ms. Hoover, Concur. This gimmick was revealing of both candidates. McCain demonstrated that his priorities are consistent with his campaign’s motto: Country First. In other words, McCain is the adult.
Obama appears petulant, reluctant, and narcissistic. The “if you need me call me” BS was easily his most ego-centric remark to-date in the campaign. Hell, he’s only running for the highest office in the land—and btw, is a sitting US senator. I guess the folks from Illinois who elected this man are ok with his priorities (misplaced priorities).
September 26, 2008 at 1:08 am
[...] Political strategist Margaret Hoover: This round goes to [...]
September 26, 2008 at 2:01 am
Ms. Hoover – Your comments about John McCain are correct. He puts country first. As for Senator O’bama, he say’s Presidential candidates should be able to multi-task. Staying on the campaign trail, he was actually staying in a motel , practicing for the debate, is doing just one thing. How was he multi-tasking? Both candidates were in touch by phone, but McCain felt that was not good enough for a leader, he went to where he could be most effective. John McCain is a warrior.
September 26, 2008 at 2:12 am
If this were a movie, Barney Frank would be the villain, John McCain the hero, and Barack Obama would be Student #4.
….And Harry Reid is the whiny little sister nobody pays attention to.
September 26, 2008 at 3:03 am
I thought I was the liberal here? So why am I agreeing with Ann Coulter, while the rest of you are applauding McCain for implementing conservative socialism? Privatize profits, socialize losses.
Thats not country first, thats wall street first. Whats the point anyways? This bail-out is doomed to fail. Why, because the real reason our economy is failing is because of the devaluation of the dollar, because of our rampant deficit spending under the current administration. Its real simple, double the deficit, the dollar drops in half, inflation doubles, all of a sudden people stop spending money, because they don’t have it, business drops, people get laid off, suddenly they can’t pay thier mortage. All printing another 700 billion in the backroom is going to do is inflate the economy even more.
So, now what, McCain is going to cut pork by lighting the fire for the biggest barbecue in our nations history? Thats nice…
September 26, 2008 at 6:04 am
Kozzmo, I would disagree that it’s that simple. I would not say that the economy is “failing.” The financial markets are a bit queasy, but the economy itself is far from actually failing at the moment. If the unemployment rate shoots up to over 10%, I’ll maybe consider that.
Also, a plan of sometime is likely going to be passed anyhow. The key is to make sure that it is an investment that will make money for the taxpayer, like the S&L bailout and the bailout of Chrysler.
As for whether the bailout is actually needed, who knows. Some say Armageddon will come if it isn’t passed, others say this is just a bunch of fearmongering by a bunch of bureaucrats. Conservatives who would generally be against such a bailout believe that this is one of those once-in-a-lifetime instances where the failure would be so large that it could have serious repercussions and ultimately cost the American citizens more than a bailout; others believe that there should be no bailout.
September 26, 2008 at 10:32 am
Hmmm…Kozzmo. I haven’t seen one person here say that a bailout was good. Margaret only mentioned the $700 Billion in passing.
The point is that McCain is getting back to Washington to deal with the issue, rather than stay on the campaign trail and watch nothing get done.
I don’t think any of us want a bailout…but none of us want to face another Great Depression either.
We’ve got two options…pass some legislation now and delay the inevitable, giving some people a chance to pay down some debt and fix their personal finances. Or we can do nothing and take the lumps now and get it out of the way.
While the purist in me says take our lumps now…I know that I personally(and I’m sure millions of others) would rather delay it a bit so that we can deal with out personal finances and start a rainy day fund.
September 26, 2008 at 8:03 pm
The Glass-Steagall Act, aka the Banking Act of 1933, ensured that banks were prevented from participating in the investment business. Additionally, the New Deal also proposed and passed a bill creating the Federal Deposit Insurance Company. As the Supreme Court held, in 1971, in Investment Company Institute v. Camp, “The legislative history of the Glass-Steagall Act shows that Congress also had in mind and repeatedly focused on the more subtle hazards that arise when a commercial bank goes beyond the business of acting as fiduciary or managing agent and enters the investment banking business either directly or by establishing an affiliate to hold and sell particular investments.”
Business interests had been incrementally encroaching on the dividing line between commercial and investment banks for some time. In 1996, Alan Greenspan, in his role of Fed Chairman, issued a decision allowing bank holding companies to invest up to 25% of their securities. Greenspan’s decision was the major beachhead in eroding the Glass-Steagall Act. Sandy Weill, the head of CitiGroup, and a strong proponent of repeal, was key in aligning Congressional support for the bill. Treasury Secretary Robert Rubin, the former co-chairman of Goldman Sachs and a strong supporter of the repeal, joined Weill in convincing Clinton to sign the bill. In 1999, President Clinton signed the bill repealing the Glass-Steagall Act. Shortly thereafter, Rubin went to work for Weill.
Since 1999, both political parties have put pressure on the financial sector to increase mortgage loans to minorities. The pressure ultimately led to altered underwriting standards. The standards were lowered to the point where Fannie Mae committed, to the Department of Housing and Urban Development, half its business to low and moderate income brackets.
From 2002 through 2007, White House and Treasury Department Staffers started pressing for significant reforms of Fannie Mae, Freddie Mac and other government sponsored entities. In 2003, Barney Frank, in response to Administration’s overhaul plan, stated, “These two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis, the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.” The Washington Post wrote that Barney Frank opposed any attempt to regulate Fannie Mae and Freddie Mac stating that regulators “would sacrifice activities that are good for consumers in the name of lowering the companies’ market risks.”
Over the years, White House, Treasury and Council of Economic Advisors pushed for the following changes: require Fannie Mae and Freddie Mac to submit to regulations of the SEC; adopt FASB standards of accounting; follow bank standards for capital requirements; shrink their portfolio of assets from risky levels; and allow regulators oversight to monitor the firms. In 2005, in support of the Senate Bill 190, John McCain stated, “I join as a cosponsor of the Federal Housing Enterprise Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American Taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.” Senators Dodd, Kerry, Obama, and Clinton, the top four recipients of Freddie Mac and Fannie Mae contributions from 1988 to 2008, successively opposed this measure.
Barney Frank has blamed Republicans and deregulation for our current financial problems, yet it was Democratic leadership, Barney Franks, and Senator Dodd that continued to fight reform of Freddie Mac and Freddie Mae. Accounting irregularities were covered up be Freddie Mac, Fannie Mae, Barney Frank, Chris Dodd, and Democratic Leadership.
The dishonesty and cover-up continues today. The Democrats have a majority in both Houses of Congress and could drive their own bailout solution. They need Republicans to concur on any solution. Senator Harry Reid claimed he had an agreement yesterday when there was not any agreement, so he attempts to blame McCain and the intrusion of Presidential politics. I find it astounding that the House Republicans were excluded from discussions. The fact is the Democrats are the primary cause of the financial meltdown while the Republicans are not without some blame.
The Federal Bureau of Investigation has initiated investigations into at least twenty-four cases of fraud involving Fannie Mae, Freddie Mac, AIG and Lehman Brothers. The FBI, Senate and House have an obligation to investigate Senator Dodd and Representative Frank, removing them from their chairmanship positions pending completion of the investigation. Both individuals were complicit in financial meltdown..
Additionally, when members of Congress raised the red flag of accounting irregularity, like Senator McCain, urging greater oversight, both Dodd and Franks fought against the proposal. The fact that these individuals were receiving contributions and sweetheart loans from Government Sponsored Entities is a blatant conflict of interest. Congress is becoming nothing less than an organized criminal cartel. The conduct of Dodd and Franks fails to pass the sniff test. Failure to take action against Dodd and Franks will reveal how corrupt Congress really is.
September 27, 2008 at 12:12 am
I really have gotten annoyed with these politicians, both parties, for now crafting a bill to ‘save us’ when they were the ones who opened the door to all these problems. The major problem is the banks should have never been allowed to lend these mortgages to people who couldn’t afford them. I have one friend(couple) who got a mortgage in 2005 with no money down, and they didnt have the greatest credit, and wondered how was that possible? 2 years later they defaulted because suprisingly they couldn’t afford the monthly payments.
I saw the housing market inflate for 5 years, and everyone thought we were in a housing boom, when all it was a huge bubble, and now the people who played by the rules are going to have to pony up now for 700 billion dollars. I didn’t move up to a bigger house this decade as most of my friends bought these ridiculous houses with huge mortgages, as I only refinanced once in 2003 at a very low rate, and now I am sitting prettier then most people I know, as I didn’t get greedy. But I should think McCain, Obama, and all the other people in Washington are looking out for our own interest? I’m sorry but McCain and Obama have people who are working for them who were working for Fannie Mae and Freddie Mac at one time during this bubble, and then you have guys like Chris Dodd and Barney Frank who loosened the regulations to let ‘anyone’ become a home owner. Margaret, we agree alot as I am a moderate too in our party, but this past 2 weeks has made me sick to my stomach because this could have been avoided 5-6 years ago, but the congress is a reactionary government not a pro-active government, and that is why they are floating this 700 billion dollar bailout in front of us to ‘save’ us.
September 27, 2008 at 3:22 am
I never thought I’d say this, however, thank God for the House Republicans. The way I see it, no one wants to claim credit for this bailout, because its political suicide. Hopefully they will just keep arguing long enough for us to realize that this is only another instance of our government trying to panic us into a bad decision.
As far as McCains decision to cancel the debate, looks like it was a game of chicken to rush the passage of the legislation. I’ll let you decide who blinked.