I know, the most recycled line in history about the economy, but it’s still true. It is the economy this election cycle and things are only getting worse. We awake this morning to two huge stories:
1. Lehman Brothers filed for Chapter 11 bankruptcy protection;
2. Bank of America took over Merrill Lynch in a stock only deal.
World stock markets are tumbling, the dollar is falling, 7 international financial institutions have set up a fund to try and prevent other banks from crashing. There is no doubt that the Dow will take huge hits today. All of this is, of course, tied to the housing market crash (no, not a slump) that has dragged down the financial markets for over 14 months.
The electorate should, and probably will, tie this crisis to the failed economic policies of the Bush administration and their failure to oversee the commercial banking industry. Since McCain promises not much more than a continuation of most of Bush’s policies, wholesale, surely the American voters will understand that a McCain / Palin administration will not provide the answers to pull us out of the recession we’re in (face it, folks) and the darker days to come. We can all revisit McCain’s admission that he really doesn’t get the economy, but we’ve been over that ground until the path is bare. The facts are plain: McCain is a Bush retread and we’re in trouble if we let him anywhere near control of this economy.
Update: Here’s Obama’s response to these events:
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.
I certainly don’t fault Sen. McCain for these problems, but I do fault the economic philosophy he subscribes to.