Some Politcs: the current economic mess.

First, a quip:

Pot and Kettles: From the Huffington Post:

John McCain’s campaign says the Republican is picking up the support of a top Hillary Clinton fundraiser and member of the Democratic National Committee’s Platform Committee.

Lynn Forester de Rothschild has said she thinks Democratic nominee Barack Obama is arrogant and has a problem connecting with average Americans.

Rothschild is a member of the DNC’s Democrats Abroad chapter and splits her time living in London and New York. She was one of Clinton’s top fundraisers, bringing in more than $100,000 for her presidential campaign. She built a multimillion-dollar telecommunications company before marrying international banker Sir Evelyn de Rothschild.

Ok, to show that I am fair minded: if there is a video of Ms. Rothschild endorsing Senator “Seven House” McCain, I will post it.

But hey, maybe I am being closed minded; she probably talks to her servants all of the time!

The Economic Mess

McCain Ad:

Our Response:

Yep, put the fox in charge of protecting the chickens.

Oh yes, remember when McCain supported putting your social security into this mess?

So if you are still tempted to vote Republican to help out our economic mess, check out this list.

Of course, I probably haven’t told you that Paul Volcker, the Federal Reserve Chair who tamed inflation, endorsed Barack Obama? Note: Volker served under Ronald Reagan, but was appointed by Jimmy Carter.

As to the nonsense that Obama is all talk and no solutions:

It is a 31 minute video; a nice analysis of it can be found here:

The speech prompted the progressive economist Robert Kuttner to write:

First, he connected all the dots — between the complete dismantling of financial regulation, the declining economic opportunity and security for ordinary people, the current financial meltdown, and the political influence of Wall Street as the driver of these changes. Astounding! I wish I had written the speech. It is this kind of leadership and truth-telling that is the predicate for the shift in public opinion required to produce legislative change. A radical, appropriately nuanced, and deeply public-minded description of what has occurred, the speech was Roosevelt quality: the president as teacher-in-chief. Those who felt that Obama was capable of real growth that will transcend the campaign’s early and somewhat feeble domestic policy proposals should feel vindicated.

The speech also showed real understanding and subtlety in grasping how financial “innovation” had outrun regulation, as well as a historical sense of the abuses of the 1920s repeating themselves. Obama is one of the few mainstream leaders — Barney Frank is another — calling for capital requirements to be extended to every category of financial institution that creates credit. This is exactly what’s needed to prevent the next meltdown, but if it were put to a vote now, it would be rejected by legislators from both parties because they are still in thrall to market fundamentalism and Wall Street. That’s where presidential leadership comes in.

So the speech was courageous, in that it goes well beyond the current Democratic party consensus, and one can only wonder about the reaction of some of Obama’s own financial backers. He also took on a couple of other sacred cows, such as electricity and telecom deregulation, proven failures to everyone but industry defenders and their allies in the economics profession.

This is should be a debate that Obama welcomes; it’s friendly territory for Democrats.

This Robert Reich post speaks to the current problem and the solutions:

Ironically, a free-market-loving Republican administration is presiding over the most ambitious intrusion of government into the market in almost anyone’s memory. But to what end? Bailouts, subsidies, and government insurance won’t help Wall Street because the Street’s fundamental problem isn’t lack of capital. It’s lack of trust.

The sub-prime mortgage mess triggered it, but the problem lies much deeper. Financial markets trade in promises — that assets have a certain value, that numbers on a balance sheet are accurate, that a loan carries a limited risk. If investors stop trusting the promises, Wall Street can’t function.

But it’s turned out that many promises like these weren’t worth the paper they were written on.

That’s because, when the market was roaring a few years back, many financial players had no idea what they were buying or selling. Worse, they didn’t care. Derivatives on derivatives, SIVs, credit default swaps (watch this one!), and of course securities backed by home loans. There seemed no limit to the leverage, the off-balance sheet liabilities, and what credit rating agencies would approve by issuers who paid them to.

Two years ago I asked a hedge fund manager to describe the assets in his fund. He laughed and said he had no idea.

This meant almost no limit to what was promised. Regulators — Alan Greenspan in particular — looked the other way.

So Reich goes on to say that we need more careful regulation, which, of course, the economic conservatives will howl about.