Within less than an hour the stock market opened this morning with a 300 point drop and is now at about 280 points as I type this. This was in reaction to Lehman Brothers filing for bankruptcy and Merril Lynch & Co. being bought out. John McCain said "these are very, very difficult times." That's the understatement of the year. Yet went on to say that he still thinks (as of this morning) that the "fundamentals of the economy are sound." When long-time pillars of our economy such as Bear Sterns, Lehman Brothers, Merril Lynch and AIG are dropping like flies we are beyond difficult times, we are living in an economic emergency.
Fundamentals of the economy include jobs which are being lost at record numbers. It includes consumer confidence which is low with less people investing and buying goods and services. It also includes purchasing power which is much less with the declining value of the dollar. Another fundamental would be reduced debt and yet under the Bush/McCain policies of staying in Iraq and giving tax cuts to the rich we must continue to go into debt to pay for it all. Another fundamental is a strong middle class but because again McCain wants to continue the tax cuts to the rich the middle-class is continuing to shrink everyday.
So when I hear McCain saying that basically the fundamentals are sound I know that he's beyond out of touch. People are losing their home which is their biggest investment and meanwhile McCain basks in one of his 7 houses saying "it's not that bad." This is the same guy whose top economic adviser said no, we aren't in a recession but that it's a mental recession and that we're all just a bunch of whiners. And one of his other economic advisers is Carly Fiorina who single handedly destroyed Hewlett-Packard company resulting in thousands of job losses.
The crisis, which once seemed like a confusing Wall Street story, has reached a tipping point where Wall Street will visibly affect Main Street: Home buyers, consumers and entrepreneurs will have even more trouble getting credit, slowing the nation’s job machinery.
And it's not just partisan liberals who believe that we are in a catastrophic crisis, conservative economy guru Alan Greenspan said yesterday that this is, "The worst economy I've ever seen" and Greenspan has been around a while and knows a thing or two. His is a sobering view that goes way beyond a scenario where things are simply "difficult." As well as a statement that is in stark disagreeent with the McCain comments that our economy is still fundamentally sound.
John McCain has said that he wants to set up a special panel headed by Greenspan and yet despite his admiration for Greenspan, McCain apparently disagrees that this is the worst economy in a long while with this non-sense that the fundamentals of the economy are sound.
McCain claims that we need to reform the relaxed regulations (which we do) of these banks and mortgage companies and yet he was part of the problem leading up to this economic meltdown by voting against such regulation!!:
McCain Voted Against An Independent Regulatory Agency For Federal Home Loans. McCain voted against the Federal Housing Regulatory Reform Act which created an independent regulatory agency within the Department of Housing and Urban Development to oversee the activities of Federal National Mortgage Association and Federal Home Loan Mortgage Corporation. [1992 Senate Vote #137, 7/1/1992]We can't afford more of the same punitive Bush economic policies that McCain would continue to prop up.
UPDATE: The McCain camp claims that what he was really saying by his statement that the fundamentals of the economy are sound was that the American workers still have a strong work ethic, productivity and ingenuity. I assume he's not talking about the unemployed workers who are apart of the record 6.1% unemployment rate? Which by the way was around 4% when Bush took office. When one traditionally speaks of the fundamentals of the economy they include more than just the work ethic of the American worker. I think most economists would agree that our economic fundamentals are also critical things like GDP rate, the strength of the dollar and the trade deficit to name a few.
But second, the American worker isn't fundamentally sound--not in the least!! The American worker today has to work more hours for less pay, get less for their dollar, pay more for less insurance, suffer pay-cuts and worry if they'll have a home to come back to after work.