Statement From Chairwoman June O'Neill On Debate Tonight

"Understanding of the serious economic challenges" (0.00 / 0)

The most amazing thing to me about the debate was that McCain continued to push his misinterpretation of the financial crisis.  In trying to cast himself as somehow ahead of the curve on the financial crisis, he continued to pretend that Fannie Mae and Freddie Mac were the problem's cause:

"Fannie and Freddie were the catalyst, the match that started this forest fire," he said. "There were some who stood up against it. There were others who took a hike."

This is, frankly, partisan, self-serving BS. Serious economic research and economists' opining on the subject, such as this and this and this, cast the issues with Fannie and Freddie as more effect than cause of our difficulties.

Indeed, Paul Krugman saw this coming way back in July, and wrote about it then here.

The private mortgage-backed securities (MBS) and their derivative cousins, the credit default swaps (CDS) are widely understood to be the central problems that have brought us here, along with un- and under-regulated over-leveraging of the Investment Banks and hedge funds.  Indeed, McCain's solution to our economic woes-- that the Treasury purchase mortgages directly-- is simply a re-assignment (and a very expensive one, at that) of the role of the GSEs in the housing market.

McCain doesn't get it.  He doesn't get economics generally, and he doesn't get this crisis in particular.  His closest economic advisor-- Phil Gramm-- is the patron saint of Enron, and responsible for some of the legislation that enabled our financial descent into crisis. And, incredibly, he has done this before during the S&L bailout, when he and 4 others-- the Keating Five-- put the private interests of their campaign contributors above the public welfare.  "This one" is dangerous in serious economic crisis.  "That one" has a firm grasp of what is going on, a team of expert economists that he listens to, and a willingness to understand that complex problems require nuanced solutions.  Trusting know-nothing Republicans, more interested in militarism and social conservatism than responsible stewardship of our economy, has brought us to this.  We need Obama's steady leadership to lead us out, not more of McSame.  

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by: robinia @ Wed Oct 08, 2008 at 08:29:56 AM UTC