Sunday, September 14, 2008

McCain vs. Obama on the Crisis

Democratic presidential nominee Barack Obama said Monday the upheaval on Wall Street was "the most serious financial crisis since the Great Depression" and blamed it on policies that he said Republican rival John McCain supports.

"This country can't afford another four years of this failed philosophy."

"The challenges facing our financial system today are more evidence that too many folks in Washington and on Wall Street weren't minding the store. Eight years of policies that have shredded consumer protections, loosened oversight and regulation, and encouraged outsized bonuses to CEOs while ignoring middle-class Americans have brought us to the most serious financial crisis since the Great Depression."
Here's the summary of Obama's speech last March:
Obama pledged to restore confidence in the markets, tackle the housing crisis and protect families from the economic slowdown by:

* Creating 21st century standards for transparency and oversight of the financial system in order to prevent future abuses and crises.

* Providing immediate relief to homeowners hit by the housing crisis.

* Enacting a second stimulus package to stabilize and strengthen the economy, provide aid to homeowners and states hardest-hit by the housing crisis, and extend and expand unemployment insurance.
In extreme contrast, the three action points from McCain's speech last March:
Our financial market approach should include encouraging increased capital in financial institutions by removing regulatory ... impediments to raising capital.
First, it is time to convene a meeting of the nation's accounting professionals to discuss the current mark to market accounting systems.
We should also convene a meeting of the nation's top mortgage lenders.
To review, McCain think the problem is that we have too much regulation, so his response to call for ... a meeting of accountants and another of mortgage lenders. Did McCain adviser Donald Luskin write this speech? As I noted in my post at the time of the speech, among everyone except the most deranged right-wingers, it's clear that the crisis illustrates the need for better regulation of the financial system.


Greg said...

A few questions: The current financial crisis is occurring because thousands of financial institutions invested in mortgage packages that have lost large percentages of their value; correct? The reason for this is was lenders offered loans to borrowers who ultimately could not afford their mortgage. The homeowner defaults…yadda, yadda, yadda. Who’s ultimately to blame? (Now, I live in a 1 bedroom condo w/ my wife as we continue to save our money for a sizeable down payment and affordable mortgage so I have no problem shaking my finger at my neighbors for not doing their homework) However, shouldn’t there be some serious regulatory changes for lenders? The “free hand” has a hard time working when the other hands picking its own pocket.
By the way, that hand has to be sore after slapping the Brothers AND the Bull off Wall Street.

charles said...

According to the New York Times, Democrats blocked Bush’s Fannie Mae and Freddie Mac reforms so low income people with bad credit could buy houses.
''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, and the less we will see in terms of affordable housing.'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee.