Messaging
My summary of the candidates (President and VP) and their messaging on the ongoing financial crisis:
Obama: We’re in this mess because the fundamentals are bad, and the fundamentals are bad because the Republicans have been ignoring ordinary working people and their needs. Most of what I think we should do is not particularly germane, and what is germane I don’t want to explain in too much detail because I’m worried I might get it wrong. I’m sticking to my platform.
McCain: We’re in this mess because a bunch of Wall Street hot shots got us into it, but they won’t dare to pull that stuff when I’m in the White House, because I survived five years in a POW camp. Do I look like the kind of guy who hangs around with a bunch of Wall Street sissies who buy their shirts at Thomas Pink? Not on your tintype girlie-girl.
Biden: I’ve been in the Senate forever, and I proposed a whole bunch of bills to deal with this problem – in fact, I’ve proposed bills to deal with just about any problem – but nobody will listen to me, particularly not John McCain. I hate it when people don’t listen to me.
Palin: I’m pretty sure John said he was against the bailout yesterday, but today he said he supported it. So I guess this is one of those times when you have to support something that you don’t basically feel good about because there’s no real alternative. That sounds about right.
Yeah, Obama’s finance guy was on Morning Edition and he was in an odd place because basically Obama has to stand behind Treasury (read: the Bush administration) right now (and is wise to: it looks like Paulson is, to the extent he can, trying to preserve the ability of the next administration to make choices). But he can’t really say he’s backing Bush on this, so he had to say they “wouldn’t second-guess the Fed” on AIG. When in fact what seems to be happening is Treasury is telling the Fed what to do: this is Paulson’s baby, not Bernanke’s.
— Sanjay · Sep 18, 12:13 PM · #
I don’t see this. Obama is proposing a massive tax increase on the top five percent of income earners, the very people responsible for this mess. He also proposed increasing regulation of financial activity, a counter to 30 years of deregulation under Republicans and Democrats.
I can see why Obama doesn’t want to push this message too hard, because the anti-tax, anti-regulation sentiments are still pretty strong among the chattering classes, but this is a significant change from what we have now.
— Martin Johnson · Sep 18, 03:13 PM · #
Obama is pretty funny. I heard the same radio piece, and IIRC, Obama’s position is:
1) Everything is Republicans’ fault.
2) Obama called several months ago for the Fed to convene a summit to decide what to do, which shows that he is ahead of the curve.
3) However, at this point, any call to appoint a commission is risible. With the exception of the commissions that Obama has called for, commissions don’t solve problems, bold leadership does.
4) Obama’s bold leadership regarding the credit crunch appears to consist of (i) blaming republicans for the credit crunch and (ii) refusing to “second guess” the fed and treasury. (This means that Obama will neither endorse their plan, criticize their plan, nor offer his own suggestions for a plan, because any of that would be “second guessing.”)
— J Mann · Sep 18, 03:59 PM · #
“I don’t see this. Obama is proposing a massive tax increase on the top five percent of income earners, the very people responsible for this mess.”
Actually the top five percent usually pays their mortgages. =) It’s the folks who got into loans way over their heads that are defaulting that caused the problem, IMHO.
In other words, people didn’t take responsibility for their own finances. Rather than figuring out if they can afford a house or not, they figured that if someone is willing to lend them the money, they MUST be able to pay it…
— Falshrmjgr · Sep 18, 07:37 PM · #
“3) However, at this point, any call to appoint a commission is risible. With the exception of the commissions that Obama has called for, commissions don’t solve problems, bold leadership does.”
not quite. not even close.
Obama is opposed to McCain’s proposal of a commission to investigate what happened since we already know what happened.
we don’t need an autopsy here; we already know the cause of death. what we need now is to know how to prevent similar deaths.
— cleek · Sep 19, 03:42 PM · #
“In other words, people didn’t take responsibility for their own finances. Rather than figuring out if they can afford a house or not, they figured that if someone is willing to lend them the money, they MUST be able to pay it…”
Remember how, back in school, Math was Hard? And the most common complaint was, “Seriously, what is this stuff good for, anyway?” We’re paying in spades for that attitude right now. (Same goes for Science class, but that’s another topic.)
The problem is that people believed that 1) the bankers wouldn’t do a deal that was bad for them, and 2) defaulting on a loan was bad for the banker. The bankers knew that the US Government had their backs, by way of Fannie/Freddie/whatever, and that the “risk” they claimed wasn’t really that risky. To wit: a bunch of free-market, deregulation folks expected to escape the consequences of their actions if things went south.
The real, long-term solution is for people to hire real-estate specialists to review mortgages on their behalf, since the buyer isn’t qualified to understand it all and the banker doesn’t care which way. You know, kind of like the way realtors are supposed to work. We need to get away from the current system that closely resembles used-car sales.
We’ll see how that turns out. Who knows? The rich may yet again get the last laugh; there’s precedent.
— NotParatrooper · Sep 19, 03:49 PM · #
This whole situation throws everybody’s economic and fiscal policies out of whack, but it is more of a problem for McCain for several reasons. First, he represents the party in power, and hence is, by default, stuck with the blame. Second, his primary solution to most problems, military force, is not helpful here. Third, his own record, and that of all his economic advisers, are very much in favor of the deregulation that is generally regarded as the casue of this crisis. Fourth, when conservative Republicans start saying we have to buy giant corporations then it is pretty hard to say that the Democrats are the party of big government.
— RP · Sep 19, 03:53 PM · #
“In other words, people didn’t take responsibility for their own finances. Rather than figuring out if they can afford a house or not, they figured that if someone is willing to lend them the money, they MUST be able to pay it…”
I think that we have to consider that the greed within the lending industry, if greed is the right word and not opportunism with the reduced/modified regulation, in pushing the loans and convincing the persons that as experts and professionals in the industry, they know the loan applicants can either afford the loans based on future likely income increases and tax deductions and other rigmarole, or can afford to carry the loan until they flip the houses in the hot! hot! hot! housing market.
Some people did get overly ambitious (greedy?) and take out loans they they knew they couldn’t afford and fooled themselves into thinking they could carry, but others got fooled by the lending industry because they trusted the “experts” in a complicated and interconnected industry supporting the market.
There is enough blame to go around.
Frankly, the two areas of government that affect everyone (supposedly) are so complicated they require years of study and specialized degrees to even partially understand the full implications and ramifications of their effect on anyone’s life. Those areas are the Law and Taxes. We should simplify those areas to a high school graduate level and keep them there. Tough to do, but needed.
We should also consider the implication of any one company or industry carrying the economy such that a scandal, raw materials, or change in the technology or other quickly changing support/infrastructure could hugely impact the entire US economy. Financial planners tell you to invest keeping diversity a key consideration to bring risk into line with need for liquidity. Our economy is not something to be played with, so the government and the citizens should think more than just about the short-term and their own rewards. No, I did not say “not think about their own short-term and own rewards” as in some stereotype of socialism, but we should consider also the long-term for ourselves and our fellow citizens.
— Robert in SF · Sep 19, 03:57 PM · #
“Actually the top five percent usually pays their mortgages. =) It’s the folks who got into loans way over their heads that are defaulting that caused the problem, IMHO.”
Yes and no. If it was just the people not paying the mortgages that shouldn’t have been given to them in the first place, the economy would be fine. It was the bundling and selling and re-selling of those mortgages as credit default swaps that is the trouble. I’ve heard this in itself is probably around 62 trillion….way more than just the bad loans themselves. It’s unregulated, so nobody knows for sure how much their value was magnified…but it was a whooooole bunch. Fresh Air has a good episode on it if you want to take a listen: http://www.npr.org/templates/story/story.php?storyId=94686428&ft=1&f=13
— McTee · Sep 19, 04:06 PM · #
“Rather than figuring out if they can afford a house or not, they figured that if someone is willing to lend them the money, they MUST be able to pay it”
The mortgage brokers were granting loans to everyone and their dogs because they knew they’d be bundling the mortgages up and selling them out the back door in plain brown wrappers marked as “low risk high yield investments”, and by the time things blew up they’d already be safely rich.
The customers being served were the institutional investors with big money to invest. That was the game – generate mortgages by hook or by crook for bundling and sale. The people buying the mortgages were just the sheep to be shorn. The banks didn’t actually care if the loans would be paid back, because they were focused on the short-term profits and stupidly believed that the housing market would keep going up (and they had those nice CDSs to insure things.)
— Jon H · Sep 19, 04:07 PM · #
Obama’s messaging seemed pretty clear that he thinks Republicans have a policy weak spot in being ideologically against regulation and oversight, and, implicitly were asleep at the switch. His “solution” messaging is closer to your cartoon spoofs.
— PaulC · Sep 19, 04:30 PM · #
So I guess, what, we’re screwed either way? How about we go with who’s less bad then?
— Herb · Sep 19, 04:49 PM · #
Sure, the ol’ “plenty of blame to go ‘round” whine. “What? I’m to blame? Well sure, there’s uh… plenty of blame to go around, not to mention the guy who stupidly got in the way of my bullet.”
As an analogy, the guy who got plowed down while in the cross-walk on green SHOULD have looked both ways. He was foolish to have trusted that the folks with their foot on the gas and their hands on the wheel and their eyes supposedly looking ahead would follow the rules of the road. So the crosswalk guy (we’ll call him John Q. Public) lying spattered in the crosswalk gets blamed, while the criminally reckless guy behind the wheel (we’ll call him Bobby Novacc) gets pitied for having to deal with a dented fender.
These trickle-down apologists are really having to bend over backwards to avoid the reality of their failed philosophy nowadays.
— iLarynx · Sep 19, 05:34 PM · #
This can safely be lumped in with all of those problems that do not have a partisan basis. That is not to say that politically, tacticly, it won’t hurt the GOP, but more that if we’re honestly interested in solving these problems then it’s going to take more than a new administration and a new party. Neither party is strong on this stuff, they’re all just as guilty Don’t forget – The Fannie Mae/Freddie Mac cow was led to slaughter by Jim Johnson – the same Jim Johnson Barack originally hired to vet his VP picks.
— Rick · Sep 19, 05:46 PM · #
Well all I know is that after Reagan (S&L) Bush I (recession) Bush II (now) every-time a Republican runs the country the economy suffers a melt down. It blows chunks that the DLC and other corporatist Dems in the 90s have embraced a similar (lite) philosophy but the pedal was pushed to floor (by Alan Greenspan in advance of the 2004 elections) and kept there by the other guys.
— MNPundit · Sep 19, 07:22 PM · #
“Sure, the ol’ “plenty of blame to go ‘round” whine. “What? I’m to blame? Well sure, there’s uh… plenty of blame to go around, not to mention the guy who stupidly got in the way of my bullet.”
As an analogy, the guy who got plowed down while in the cross-walk on green SHOULD have looked both ways. He was foolish to have trusted that the folks with their foot on the gas and their hands on the wheel and their eyes supposedly looking ahead would follow the rules of the road. So the crosswalk guy (we’ll call him John Q. Public) lying spattered in the crosswalk gets blamed, while the criminally reckless guy behind the wheel (we’ll call him Bobby Novacc) gets pitied for having to deal with a dented fender.
These trickle-down apologists are really having to bend over backwards to avoid the reality of their failed philosophy nowadays.”
I don’t know how you can even claim that that this analogy is even close to appropriate or reasonable. No one is purely blaming the “pedestrian” or pitying only the “driver”, at least not that I can see. If you had said that a number of persons crossing got hurt or killed, by a number of cars, and that some of those pedestrians were “waved on” to cross by some of the passengers in cars that had already crossed the intersection, then maybe that would be more in line.
And what “failed philosophy” are you talking about the “apologists” have?
If you mean the “everyone has a right to own a home” faction that supposedly seems to be the cause of the current crisis, then I would like to see sort of reference to where that was the culture being promoted somehow. I hear that bandied about, but I wonder if it’s more stereotype than fact.
— Robert in SF · Sep 19, 07:41 PM · #
What jumps out at me is the fact that none of the candidates said a word about the fact that the Federal Reserve is going to inflate the money by ANOTHER trillion bucks or so to do these “bailouts”. If it were possible to improve an economy by inflation, then Zimbabwe would be the most prosperous place on earth.
Abolish the central bank, and you’ll abolish the boom-and-bust cycle.
— Some Guy · Sep 20, 11:10 PM · #
The U.S. Treasury Secretary, Hank Paulson, supported by the Fed Chairman Ben Bernanke and the U.S. President George W. Bush, requests that he has an immunity from prosecution for the shortcomings of the bailout solution that he is going to implement. All the while the solution itself has so many gaping holes that even the classically inept Congress seems to have come up with a better plan. Meanwhile, the presidential hopeful John McCain, who have claimed not so long ago not to know much about economics, is accusing his competitor, Senator Obama, of the lack of leadership skills based solely on the fact that Obama needs to reflect and to consult the team of top-notch economic advisors before rendering judgment.
We are facing the second most dangerous moment in the history of the U.S. economy since the Great Depression. The idiotic rush to come up with a solution in one day is not going to work! This is not another movie about an asteroid falling on Earth. A cowboy with a nuclear explosive is not going to save the day. A bunch of bookish looking economists with bow-ties and the contemplative politicians used to looking at nuances of their decisions, devoid of utterly arrogant confidence in their own divine inspiration and infused with a bit more of (traditionally Christian) humility would be a better A-team.
— Irreverent Comment · Sep 23, 04:31 AM · #