This is one of those times when I am happy to be an independent voter. Today, McCain and Obama responded to questions about what they would do to solve the financial tsunami once more threatening to spread from Wall Street into the cities and towns of mainstream USA. Their answers show how, in the midst of a major fiscal crisis, we are not being well-served by the rhetoric of either candidacy
First, McCain: He proposes to set up an independent, bi-partisan committee to address problems of the type caused by Lehman Brothers, Merrill Lynch and AIG. Nice try, but just ask the senior Tom Kean who headed up the 9/11 committee and who, to this day, maintains that the committee’s recommendations were never fully enacted. We don’t have the time for that.
Next, Obama: When asked what he would do about the imminent bankruptcy of the world’s largest insurer, AIG, the response from his staff is that his campaign will take no position, because he doesn’t know the status of AIG’s books. How nice: A Harvard education, mind you; and, while the rest of the world knows that investments made by AIG in mortgage-backed securities, as well as credit default swaps (insurance issued on those securities) would take down profitable units of this financial giant and spread to other firms, Obama doesn’t know seem to know this. How credible is that?
Somebody had to act, and now! Somebody just did: As of this writing, the U.S. government, according to a 9:15 p.m., web news release, “has agreed to provide an $85 billion emergency loan to rescue the huge insurer AIG, the Federal Reserve said Tuesday.”
We don’t have to agree with this particular course of action, but at least some people in Washington and on Wall Street have come together to assess the problem and have taken swift action.
Note: For a colorful reaction to the Lehman Brothers bankruptcy, see Jay Jefferson Cooke’s essay at, http://www.mycentraljersey.com/apps/pbcs.dll/article?AID=2008809160323
Disclosure: I have a son who works for a fiscally sound subsidiary of AIG.
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