The fact that we have reached a point where the Federal Reserve felt it had to take this unprecedented step with the American International Group is the final verdict on the failed economic philosophy of the last eight years. While we do not know all the details of this arrangement, the Fed must ensure that the plan protects the families that count on insurance. It should bolster our economy’s ability to create good-paying jobs and help working Americans pay their bills and save their money. It must not bail out the shareholders or management of AIG.
This crisis serves as a stark reminder of the failures of crony capitalism and an economic philosophy that sees any regulation at all as unwise and unnecessary. It’s a philosophy that lets Washington lobbyists shred consumer protections and distort our economy so it works for the special interests instead of working people; a philosophy that says we should give more and more to those with the most and hope that prosperity trickles down to the rest.
Instead, the pain has trickled up – from the struggles of Main Street all the way up to the crises on Wall Street.
Despite his eleventh hour conversion to the language of reform, Senator McCain has subscribed to this philosophy for twenty-six years in Washington and the events of this week have rendered it a colossal failure. It is time for a new economic strategy, guided by the principle that America prospers when all Americans prosper, where common-sense rules of the road ensure that competition is fair, open, and honest. That is the strategy I will pursue as President, and I will bring the change we need to restore confidence in our financial markets and strength to our economy.
. . . the final verdict on the failed economic philosophy of the last eight years
US Soldiers in Iraq
killed
wounded
killed
wounded
#1 by Craig Johnson on September 17, 2008 - 9:36 am
It’s time for Obama to HAMMER that message home. Clinton got it right in 1992.
A steady stream of messages like this I think would win the election. What a great ad:
http://www.livingroomcandidate.org/commercials/1992/milwaukee
#2 by Glenden Brown on September 17, 2008 - 9:39 am
Preach it brother!
Obama has a challenge Clinton didn’t have though – if he gets to tough he comes cross the “scary angry Black Man” which sends lots of white people into screaming hysterics.
#3 by Stewart on September 17, 2008 - 9:40 am
I can’t help but find the irony of this devastating economic crisis a tad bit sweet. I mean the Republican mantra for the last few decades has been deregulation of our economic system.
The free market economy will take care of itself, right? So, finally the Republicans get control of the White House, Senate and Congress and get what they wanted; total deregulation. What was the ultimate outcome? Nationalization of 3 major financial companies; nationalization isn’t that kinda, well Socialist?
So I get it, the way to liberalize our economy is to give the conservatives what they want. Well hind sight is 20/20.
#4 by Cliff Lyon on September 17, 2008 - 10:50 am
Reagan’s policies were a failure too, contrary to conventional Republican wishful thinking. When Clinton came into office, he was told by his economic advisors that he would not be able to implement many of his promises until he could ameliorate the fiscal imbalance of the Reagan years.
Few people realize, Bush Sr. HAD to raise taxes for the same reason.
Cutting taxes for the rich, trickle-down, and supply-side, did and does, not work.
#5 by Glenden Brown on September 17, 2008 - 10:55 am
Bush Sr was actually a competent president. He wasn’t a very politician, he was pretty good on policy. His worst choices as President seem to have been connected to his attempts to placate the hard right.
#6 by cav, an anon's anon on September 17, 2008 - 11:05 am
Now let’s nationalize womething of value. The energy block.
#7 by cav, an anon's anon on September 17, 2008 - 11:26 am
Don’t you just love ripping through our children and grand-children and great-grand-childrens’ future earnings?
#8 by Matt on September 17, 2008 - 2:59 pm
Why is it a bad thing that these companies are failing?
One of the most important aspects of a “free market” is that the weakest businesses get weeded out and better ones pick up the slack and improve things. Bailouts give us a temporary sense of security but only deflate optimism for the future that could be.
It’s also important to realize that the economy fluctuates up and down all the time. It would do this even if economic policies never changed. I think it’s pretty hard to attribute any particular swing to a president’s policies, whether the swing is positive or negative. We give presidents way too much credit.
#9 by Glenden Brown on September 17, 2008 - 3:12 pm
Your both right and wrong, Matt. Yes, we tend to over-credit presidents for the economies of their terms.
But you’re wrong about policies – presidents and administrations and political parties favor, support and enact policies. Deregulation – strongly pushed by Republicans – created the environment in which a great many decisions and choices were made by corporations that created unnecessary risks. When regulatory agencies are run by industry lobbyists, they do a poor job of regulating those industries- and often draft policies that serve the short term needs of industries. What we’re seeing is the outcome of deregulation run wild. Business practices that would never have occurred under an older regulatory structure were allowed and are now driving huge businesses into failure. That is the fault of the people who ran the agencies, who drafted the laws.
#10 by Matt on September 17, 2008 - 4:19 pm
Fair enough, Glenden. Maybe deregulation did create “the environment in which a great many decisions and choices were made by corporation that created unnecessary risks,” but that gets back to my original question…who cares? Who cares if businesses take big risks? Who cares if businesses fail? Certainly the people who invest in public companies care, but that is their choice to invest in them, they’re not forced to do it. People who lose their jobs when companies fail will care, but again, people can generally choose for whom they work, and if they lose their job there’s probably going to be another one out there for them, well, unless government regulates business so much that they can’t afford to create new jobs.
I’m afraid that we’re afraid of failure. As I said before, failure is good for the economy. Risk taking and failure are what drive innovation and success. We can regulate industries to avoid failure and have a mediocre economy that is pretty well off, or we can let businesses take risk and succeed or fail. As individuals, we can all choose where we work, what stock we purchase, and wherever else we invest our money. I hope I don’t sound heartless. I really believe that people are better off in the long-run with a very lightly regulated economy. I don’t want anyone to lose a job or their retirement savings, that’s just the risk we assume by enjoying the benefits of the most productive economy in the history of the world.
#11 by cav, an anon's anon on September 17, 2008 - 5:02 pm
Matt, I could agree with you about burdonsome regulations. In this complex system, complex regulations may be required.
Having written that, it is quite easy, at this ,to suppose that a system could be overly regulated, but that none of the regulations were informed or policed to any effect other than letting the swine at the trough. The ‘golden rule’ didn’t quite get at those potentials, so others were written, and here we find ourselves.
As the saying goes, The poor will always be with us…so too wil be the greed-heads, who will hire twenty others to find loopholes in the regs.