Monday, September 15, 2008

McCain in Pottersville - All's, Hee-Haw, Hunky-dory

It's A Wonderful Life bank run

(Watch the full-version of the scene here)

If Stumblin' Bumblin John McCain lived in Bedford Falls, perhaps the town's Mayor (or, we can even keep him a Senator), no doubt he would be extolling the virtues of Pottersville, saying that things there were 'fundamentally sound" and that Mr. Potter "and his innovation and his entrepreneurship, his businesses, those are the fundamentals of America and I think they’re strong.”

He'd be doing this, having tossed away is first wife, and now toting around his second, Violet Bick.

His policies would have benefited Sam Wainwright, to move his business overseas.

His aide-de-camp, Sarah Palin, would have shuttered the library, banning virtually all of the books, leaving poor Mary Hatch unemployed.

Ernie and Bert would have been stop-lossed, and now overseas fighting in a 100-year war.

And, as he would be dead wrong standing in the middle of Bedford Falls' Main Street, he's as dead wrong today, standing on the main political stage, painting himself as the savior of the American way of life.

This morning, as Wall Street melted, like a Hershey bar lying on a dashboard in July (or, one of those American workers McCain once mockingly challenged to work in the hot Yuma summer sun - H/T The Jed Report), Stumblin' Bumblin' Johnny stuck to his stump script and pronounced, that despite the troubles of the day, our economy was fundamentally sound.

By noontime, he was being, rightfully so, derided as woefully out-of-touch, and his talking heads were rushed onto the cable news sets to start spinning "what he actually said", which caused severe technical problems with the broadcasts, having the sets spinning so ferociously.

Then by late today, Stumblin' Bumblin' Johnny was doing the spinning himself, offering “The American worker and their innovation and their entrepreneurship, the small business, those are the fundamentals of America and I think they’re strong.”

Nice, jingoistic compliment, but it doesn't address the reality, or have anything to do with what's going down with the economy.

Kind of an Economic POW-POW-POW story.

However, it's almost like gushing, glowingly, over the bin of bright, shiny colorful oranges, when the issue is the bin of rotten apples right next to them.

One has nothing to do with the other.

Paul Krugman, today;

The new system was supposed to do a better job of spreading and reducing risk. But in the aftermath of the housing bust and the resulting mortgage crisis, it seems apparent that risk wasn’t so much reduced as hidden: all too many investors had no idea how exposed they were.

And here’s the thing: The defenses set up to prevent a return of those bank runs, mainly deposit insurance and access to credit lines with the Federal Reserve, only protect the guys in the marble buildings, who aren’t at the heart of the current crisis. That creates the real possibility that 2008 could be 1931 revisited.

But Henry Paulson, the Treasury secretary, was adamant that he wouldn’t sweeten the deal by putting more public funds on the line. Many people thought he was bluffing. I was all ready to start today’s column, “When life hands you Lehman, make Lehman aid.” But there was no aid, and apparently no deal. Mr. Paulson seems to be betting that the financial system — bolstered, it must be said, by those special credit lines — can handle the shock of a Lehman failure. We’ll find out soon whether he was brave or foolish.
Hmmm ... Sounds like there was no oversight, or regulatory process in place.

Whether it be Krugman, or any other analyst today, I didn't see any vibes, any allusions, any blame been plastered on the worker bees of Lehman Bros., Merrill Lynch, or that other teetering elephant in-the-room, AIG.

McCain is desperately, to the point of looking utterly foolish, of trying to rip off his Republican suit, as if he (and, specifically, his prime financial advisor, Phil Gramm, he of "Mental Recessions" and "Whining"), had nothing to do with the melting economy.

What's going down now is the direct result of the Republican administration, and rubber-stamp Congress for six-of-the-past-seven-years.

Let the free markets be free, and not burdened with the government looking over their shoulders and everything will take care of itself.

Policies that will continue in a McCain-Palin administration.


Bonus McCain's Economy's Strong Riffs

BusinessWeek: Wall Street's Perfect Storm - Investors deal with a Lehman bankruptcy, the sale of Merrill Lynch to BofA, and a possible AIG restructuring

Joe Klein: Their Brand is Collapse


Space Cowboy: McCain: Economics Supergenius in Training

Chris In Paris: The Sunday night Wall Street tsunami, Part I: What happened?

Hilzoy: Donald Luskin Reclaims His Title

Pam Spaulding: Greenspan's "once-in-a century" financial crisis counters McCain's economic hallucinations

NYT Dealbook: Counting the Cash for Lehman’s Chief

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