Posted: March 17, 2008 3:35 PM
Clinton, Obama Remark on Economy Woes
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In the wake of a major key interest rate cut and the buyout of Wall Street giant Bear Stearns by JPMorgan Chase & Co., Democratic presidential rivals Sen. Hillary Clinton and Sen. Barack Obama were prompted to address America’s economic troubles.
“The crisis that began in the subprime mortgage market has spilled over now and poses a broader threat,” Clinton said in a news release, adding that she spoke with Treasury Secretary Henry Paulson Monday morning, who said the Fed’s action Sunday was meant to “ensure liquidity and restore confidence in the market.”
Obama also drew on his personal experience with Wall Street figures, mentioning, “Months ago, I went to Wall Street and said that our capital markets could not function without the confidence and trust of the public,” in a statement. “We must focus on what we can do to restore the public’s confidence in the market and help millions of Americans who are worried about their jobs, their homes, and their financial future. The Illinois senator expanded on this idea in an interview with the NewsHour. “What we have is a crisis of confidence in the credit market,” he told Gwen Ifill in an interview set to air Monday evening. “People don’t know where the bottom is.”
The economy has emerged as the No. 1 concern for many Americans, and Clinton has emphasized repairing it as a central campaign focus.
“I will continue to monitor the situation closely throughout the day and will seek advice and counsel from a broad range of economic advisors,” Clinton said.
On Monday in Washington, Clinton mentioned she is “not going to second guess the Fed” on their decision to cut key interest rates, the Associated Press reported.
Meanwhile, Obama blamed President Bush for failed economic policy and drove home the importance of a changing administration.
“History will not judge President Bush kindly for his failure to act in a way that could’ve prevented or alleviated this economic crisis,” he said, adding, “nowhere has the failure been more pronounced than the president’s refusal to address the plight of homeowners and Main Street businesses that lie at the heart of the turmoil right now.”
Both Democratic candidates have enjoyed large donations from Wall Street employees. Clinton received $152,000 in donations from Bear Stearns employees, while Obama received $36,000, the AP reported.
JPMorgan employees have also made an impact in presidential campaigns, donating $270,000 to Obama and nearly $200,000 to Clinton, according to the AP. Both firms’ employees have also donated in large numbers to presumptive Republican nominee Sen. John McCain of Arizona.
-- By , NewsHour with Jim Lehrer | Comments | Link
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Senator Obama said this evening in an interview with Gwen Ifill that the U.S. "must move on" and deal with problems other that the current preoccupations (he was speaking specifically about the financial crisis).
From where I sit it seems that the U.S. has usually done exactly that when confronted with a financial crisis: it has "moved on" without properly addressing either the crisis or the problems that created it, and without providing a proper remedy. What is always cited as a justification is that, by implementing regulations, the government is "interfering" in the capital market, that it should not be telling the market what to do or how to run its affairs etc.
Would it not be a more rational, more sane way of dealing with these crises - which appear to result from inherent structural weaknesses - by strictly enforcing regulations that will keep the components of the financial system from being overcome by greed before a collapse is unavoidable?
Some years ago I answered an employment ad placed by a Bay Street investment firm. The interviewer told me point blank to read a particular book and to come back only if I still thought I could do the job.
The book was Extraordinary Popular Delusions and The Madness of Crowds, by Charles MacKay. Written in 1841, it detailed the mass psychosis that can develop once greed becomes a motivating factor, particularly in economics.
One hundred sixtyseven years later, and counting, we still fall prey to the same feelings, the same scams, the same collapses. We forget too quickly, move on too soon.
No, Mr Obama, moving on is not the right thing to do. This is the time finally to stop and examine the mess, salvage from it what can be salvaged, and learn from all the mistakes that have led the U.S. to this point.
Hi Alexis,
The key to a president's success in leading the economy is primarily in knowing how to allow individuals to drive it. Dogmatic adherence to policy or ideology is the one thing a President can do to guarantee that won't happen.
I take some exception to the glorious memories of the Clinton 90s in this context. I supported Mr. Clinton during his tenure, but I also invented one of the first Internet Firewalls and worked with four companies during that period to create an enormous amount of jobs - and that did not require Presidential approval. The Tech boom created the economy and budget surpluses of the nineties, not Washington.
A President can make things worse, and the actions of President Bush are in that category. Senator McCain suggests continuing these policies - so that isn't encouraging.
Senator Clinton is today making a point of deriding Senator Obama for allowing that situations may require adaptability should he get into office - rather than didactic adherence to campaign policies - so that isn't encouraging for her, either.
What we need is a president who does not insist on following a given path just because they said they would. That sort of stubborn pride is one of the few things that a Presient can do to take away the ability of the rest of us to build the economy.
-regards
-chris
As evidenced by the Ifill interview, when a reporter interviews Mr. Obama they had better bring their "A" game or risk being seen as intellectually challenged.
One factor not touched upon as yet by the press concerning the cascading impact of the lack of regulation in the sub-prime mortgage lending market is the fact that the Glass Steagall Act, a depression era piece of legislation designed to prevent such types of speculation by the banking industry, was repealed in 1999 during the Clinton administration.
This was a big mistake and has allowed the greed in the banking industry jeapardize the whole economy.
The point is, Clinton ineptness, whether in voting for an elective war which is the most important U.S.foreign policy blunder of the decade,or the repeal of the Glass Steagall Act, arguably the most important U.S.domestic policy blunder of the last ten years, has extensively damaged the U.S. and proven that their judgement has been a catastrophic failure.