Today we got some very bad news from Wall Street. Two of the bastions of the US financial sector have gone down in flames. Lehman Brothers has filed for bankruptcy and Merill Lynch had to be rescued by Bank of America for $50 Billion. Stock markets around the world are tumbling. The Dow Jones index lost 4.4% of its value. BBC.com is reporting that central banks around the world are responding with emergency injections of capital (to the tune of $50 Billion). The British stock market is also tumbling. The FTSE is down 3.9%. These are big companies. BBC is reporting also that Lehman Brothers employees in the UK alone are owed $75 Million in paychecks that may now bounce or never arrive.
Monday, September 15, 2008
This is bad news for the country. But it is not unexpected. To be fair, this crisis is not particularly sudden. The troubled economy was one of the one things all the Democratic primary candidates could agree on. In contrast the Republicans were falling over themselves to talk about how great the economy is. Today, McCain may have really put his foot in it. He repeated his oft stated line that the "fundamentals" of the economy are strong. When he was pounced on for saying something so completely out of touch in the context of the weekends events, he said, that he - er - really meant - uh - that workers and small business are strong and they're being threatened by those bad guys on Wall Street.
Of course McCain can't really do much about this. After all, Republicans are philosophically opposed to intervening in the economy very much at all and politically committed to protecting the stock portfolios of the top 1% of the income distribution. He can't very well come out with a comprehensive plan to fix this. Obama can - and should. It won't matter that whatever either President proposes won't be enacted. It only matters that they are seen to be doing something or at least advocating doing something.
What this does, if nothing else, is irrevocably change the subject of the conversation to the economy. 75% of Americans think we are currently in a recession. In July, Obama had a 54% to 35% advantage over McCain over "who do you trust to handle the economy." However after the Republican convention, McCain narrowed that to a 47% to 42% advantage for Obama. This news, and McCain's lame response, could put those numbers right back to where they were before the conventions.
Posted by Raised By Republicans at 3:40 PM