How Wall St.'s Crisis Affects The Campaign

Politico: Both Candidates Forced To Confront Banking Meltdown, Instability

(The Politico)  This story was written by Mike Allen.

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America’s banking instability could upend the final 50 days of the presidential campaign, with both candidates forced to confront a calamity that has gotten only glancing attention during the first 20 months of the race for the White House.

Red flags about the nation’s economic infrastructure have been popping up at least since the collapse in March of the investment bank Bear Stearns. But neither Sen. John McCain (R-Ariz.) nor Sen. Barack Obama (D-Ill.) has talked in detail about the potential consequences for voters and the government.

Until now, the crisis seemed like a confusing Wall Street story. That all ended with the fast-moving events of Sunday, which The New York Times called “one of the most extraordinary days in Wall Street’s history.” A CNBC special report on Sunday night called it "a complete realignment of Wall Street."

And that was before the extraordinary 9:30 p.m. announcement by the Federal Reserve of new efforts to shore up markets.

So it’s no longer an insider's game. The crisis is now at 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.

Here are four huge effects for the campaigns:

1. The candidates had hoped to put off their detailed prescriptions until they were in office, unrolling an economic agenda in conjunction with an address to the new Congress. Now, there's no way to duck it.

But at a time when the economy is the top issue on voters’ minds, one of the candidates could wind up winning the neck-and-neck election by talking clearly and convincingly about the fallout and what should be done.

"This is the financial equivalent of Russia invading Georgia - an unexpected event that calls for leadership and direction," said James Rickards, senior managing director for market intelligence at Omnis Inc., a research and analysis firm based in McLean, Va.

"This is an opportunity for both candidates to go beyond their [comments on] administration action and show how they would stabilize the system on a more lasting basis." (Read Obama and McCain's statements on the crisis on Monday)

2. The new crisis crowds the candidates’ agendas in the stretch run, keeping them from talking about the issues that they had planned to focus on. But the candidates are creatively trying to meld the disaster into their existing messages.

McCain aides say he plans to use the news to underscore the reform message that he began hammering at the Republican National Convention.

“This is bad news for the country and yet another sign that we need to reform Wall Street,” a senior McCain official said. “The only way we can do that is by reforming Washington first. We will show McCain and Palin as the ticket who will take action on the economy and make sure the taxpayers aren't stuck with the bill.”

Obama aides say he will hammer the message that the market upheaval shows that the country can’t afford four more years of policies aligned with those of the current administration.

His running mate, Sen. Joe Biden (D-Del.), was already scheduled to give a major speech Monday in St. Clair Shores, Mich., and is likely to get heavy coverage for his fiery elaboration on this theme.

3. Just like the markets, however, each candidate faces an enormous downside risk: Troubled times could make voters less likely to take a chance on Obama, with his shorter time in Washington. McCain could pay the price for the economic disruption on a Republican's watch, or if he looks like he doesn’t have the energy and creativity to reassure a worried nation.

4. They will also be more constrained when they get to Washington, with analysts estimating that the government takeover of mortgage giants Fannie Mae and Freddie Mac is likely to cost the Treasury $100 billion to $300 billion.

Treasury Secretary Henry Paulson "spent te cookie jar" with the takeover, a McCain adviser said.

[grumpas]

The Democrats have been in charge of the House and Senate and regulations in America---that is Obama''''s people. Want to put them in full charge now?

Posted by max0010

You like to forget that the Republican''s were completely in charge for the six years before that and in the majority in Congress since 92. They gave Bush every last thing he wanted. It''s only since 2006 the Democrats have been in charge and had to fight Republican''s all the way if anything gets done. You had better believe I want them in full charge! Anything is better than ''borrow and spend'' Republican''s. Whose idea of economic stability is a trillion dollar deficit and shipping jobs overseas.

[oleander8]

Neither Sen. John McCain nor Sen. Barack Obama has talked in detail about plans to fix our floundering economy, global warming, or the war. It''s all about Sara Palin and lipstick and who is meaner to whom.

I want the media to get to the issues that are tearing the country apart - and I want the candidates to give some open press interviews in order to answer some serious questions. Stop wasting our time with petty, irrelevant issues.

We deserve some decent information before we select our next president.

[max0010]

The Democrats have been in charge of the House and Senate and regulations in America---that is Obama''s people. Want to put them in full charge now?
On Monday in Colorado Obama used his teleprompter because he can only deliver speeches really well by reading---not thinking! No time now to make slips%u2026.just read the words that others have gone over and written.

[rwassel]

Is it coincedence that the last time 3 recessions have been under a Republican watch?

[rwassel]

It''s okay that Wall Street is crashing...John McCain thinks the "fundamentals of our economy are strong" and that "we are a nation of whiners"

[msay3]

This looks like a win/win presidential race.....If McCain loses, we win, if Obama loses, we win.....

[n8yvn29]

Of course Palin won''t cooperate. She continues in the ''proud'' tradition of the Bush administration: stonewalling official government investigations, obstructing justice, and denying that we have three branches of government. Do we need four more years of such nonsense? I don%u2019t know about you, but I don''t.

[babooph]

Good thing we borrowed that fortune from the Chinese before we went broke-lucky we gave our rich 10 years of a massive tax cut too,or they could suffer with the troglites.All voted for by those not even having a lobotomy !!

[ddaryl1]

(this time without all those typos)

Hey; You want to fix the economy stupid.

We need investment from our government into our own infrastructure. We need to use our taxes to fund alternative energy and mass transit infrastructure that creates high paying jobs with excellent benefits.

This country needs to find a way to get more money down to the citizens. Down to the blue collar workers. Get more money down into the hands of the workers and this entire economy will improve.

Keep shoveling the money to the wealthy and the corporations and we will continue to sink.

The only way a capitalisitic society works is if the masses have the means to spend and consume. Otherwise the money dries up and when the workers do not have enough money recession trickles all the way to the top.

Now in reverse if you get money down low to the workers it will also trickle all the way to the top but in a good way.

Stop supporting conservative BS and the economy will get better. It really is that simple!!!

[ddaryl1]

Hey; You want to fix the economy stupid.

We need investment from our government into ou owwn infrastrucutre. We need to use our taxes to fund alrternative enrgy and mass transit infrastrucuture that creates high paying jobs with excellent benefits.

This countryt needs to find a way to get more money down to the citizens. Down to the blue collar workers. Get more moeny down into the hands of the workers and this entire economy will improve.

Keep shoveling the money tot he wealthy and the corproations and we will continue to sink.

The only way a capitalisitic society works is wf the masses have the means to spend and consume. Otherwise the oney dries up and when the workers do not have enough money redcession rickles all the way to the top.

Now in reverse if you get omey down low to the workers it will also trickle all the way to the top but in a good way.

Stop supporting conservative BS and the economy will get better. It really is that simple!!!