Capital Commerce

Do Wall Street's Woes Help McCain or Obama?

September 15, 2008 RSS Feed Print

I have no doubt that if President Bush were on the ballot in November, he would probably suffer a crushing defeat. Like Jimmy Carter bad. A weak economy, or the perception that the economy is weak, is what leads to incumbent presidents getting thrashed. Yet poll after poll shows John McCain in the lead, despite the best efforts of Barack Obama to paint a McCain first term as Bush's de facto third term. Will the big shakeup on Wall Street do anything to change that? I don't think so, a belief I had even before checking the Intrade betting odds that have McCain leading Obama, 53 to47, though he's down a smidgen today. Anyway, here is my reasoning:

1) McCain has done about as good a job as possible, both through his convention speech and his veep choice of Sarah Palin, of making himself the nominee of the McCain Party rather than the Republican Party.

2) It's tough to directly tie the credit crisis, or the housing crisis for that matter, to anything Bush has done or failed to do. The Federal Reserve, Wall Street, and homeowners all deserve a chunk of the blame. We had a bubble, and it burst.

3) Likewise, no candidate has a simple answer about what to do next.

4) In tough times, polls show, people become more skeptical of government. That may hurt Obama, who is proposing more government activism and higher taxes on business, investments, and incomes (at least on the wealthier folks).

5) To a great extent, this is all still thought of as a Wall Street problem. Most people don't know much about Lehman Bros. or AIG. The market is down today but not crashing. And the drop in oil prices is raising the real incomes of average workers.

Tags:: presidential election 2008,; economy,; stock market,; Barack Obama,; Wall Street,; John McCain

« Previous Post Next Post »

Reader Comments Read all comments (10)

Add Your Thoughts Comment Name State Email

Please enter the two words below into the text field underneath the image.

Your comment will be posted immediately, unless it is spam or contains profanity. For more information, please see our Comments FAQ.

There is far more anger than reason in most of these thread.
I don't have enough characters left to describe all the stupid things George W. Bush has done, but this isn't one of them. The mortgage and banking crisis is no more Bush's fault than the irrational exhuberance of the tech bubble was Clinton's fault. People with money will do stupid things with that money, like investing millions in pets.com and lending large sums of money to people without verifying their income. People who are using other people's money will do even more stupid things.
Some people want government to regulate away stupidity or to regulate away risk. Sorry, but that's not going to happen. Furthermore, any attempt to regulate away the risk will also regulate away far more opportunities for economic growth.
The banks were stupid and the banks got burned. That's capitalism.
Furthermore, the Sarbanes-Oxley regulations, passed in the wake of the Enron scandal, may be making the crisis worse than it should be. By requiring companies to revalue their assets to current market values even when the market is frozen or dysfunctional and even when the assets could be held to maturity and redeemed at face value, a small temporary downturn can destroy the value of a company as the company is perhaps prematurely forced to write down these large losses.
In other words, poorly thought out regulations have as much to do with the crisis, if not more, than any "laisse faire" attitude from the government.
Nevertheless, the only thing most people understand is that Bush is President, Wall St. Bankers are greedy, and Republicans are greedy. Look for Barack Obama to exploit and direct this anger toward his election in November and as an excuse for higher taxes on the wealthy and more social spending. Do not, however, look for him to provide any plan or any solution to the crisis.

JimBeam of SC 1:56PM September 16, 2008

Oversight-Oversight-Oversight that is what the Federal government could have done.
These banks where making large loans over the internet, allowing the person applying to use the honor system to verify there income. Crooks and drug addicts where emptying the banks while John McCain voted against oversight time and time again.

Dave of OR 1:32PM September 16, 2008

John McCain did say the fundamentals are here, I agree with him and if we can all work hard to make any of these problems go away, my funds over the past few years have done nothing but grow, even though some losses show up the return is usually steady, if we go the way of the obama plan I can only see communism coming to this country, we need a balanced plan, and we don't need any more dems in congress with a 12% approval rating, it is time to take the congress seats back to republican and for McCain/Palin for 2008, that is the only answer to keep the optimism going strong.

Richard of PA 1:11PM September 16, 2008

Do Wall Street's Woes Help McCain or Obama?

Related Articles

Reader Comments Read all comments (10)

Capital Commerce

Subscribe

Editor's Picks