Fearing a financial crisis worldwide, the Federal Reserve reversed course on Tuesday and agreed to an $85 billion bailout that would give the government control of the troubled insurance giant American International Group.
The decision, only two weeks after the Treasury took over the federally chartered mortgage finance companies Fannie Mae and Freddie Mac, is the most radical intervention in private business in the central bank’s history.
Sen. John McCain struggled Monday for a consistent economic message in the face of the weekend’s Wall Street meltdown, saying first that the “fundamentals of our economy are strong” and then abruptly shifting to say the fundamentals are “at great risk.”
“Our economy, I think, is still — the fundamentals of our economy are strong…” McCain said. “I promise you, we will never put America in this position again. We will clean up Wall Street.”
How, pray is John going to fulfill his promise “never to put America in this position again?” Is he an economic Svengali who will simply will Wall Street to health and prevent another bout of this malady?? And how does he propose to “clean up” Wall Street? He and his Republican brothers have done nothing to address similar previous economic implosions and corporate malfeasance in the past seven years. Why should anyone trust that McCain would know what the hell he was doing in addressing a crisis of this magnitude? And keep in mind all this happened on George Bush’s watch. Given McCain’s closeness to Bush, what would the former do differently??
Wall Street faces the greatest crisis perhaps since the 1929 Crash and John McCain can’t move off his stump speech and acknowledge the crisis. He can’t rise to the occasion because he and his campaign have political arterial sclerosis. Partly it’s his age I have no doubt. And partly it’s the kind of campaign he’s decided to run.
He may be willing to pull a big trick out of hat like Sarah Palin when it’s something on the periphery of his campaign. But when it comes to the hardcore serious issues like the economy he’s simply not going to come up with anything that engages the seriousness of the moment.
All of which provides Obama a golden opportunity. He and his advisors should come up with the equivalent of an domestic economic Marshall Plan. Something that will show the American people that he is engaged with the moment. That he understands the true danger we face. And that Osama bin Laden and Al Qaeda pale in comparison to this economic danger. Obama needs to show gravitas in the face of McCain’s cluelessness.
And in case anyone needs further evidence of how at sea McCain is, there is this:
“We’re going to reform the way that Wall Street does business and put an end to the greed that has driven our markets into chaos,” he said. We’ll stop multimillion-dollar payouts to CEOs that have broken the public trust.”
Is he really proposing that the federal government oversee the salaries of corporate CEOs?? Can anyone hear this with a straight face from a Republican allied with America’s corporate interests? Besides, why would anyone want the feds to interfere in the economy in this way? This is yet another sign of McCain flailing around for a life preserver, anything to make him look relevant when he is anything but…
Silverstein has published Tikun Olam since 2003, It exposes the secrets of the Israeli national security state. He lives in Seattle, but his heart is in the east. He publishes regularly at Middle East Eye, the New Arab, and Jacobin Magazine. His work has also appeared in Al Jazeera English, The Nation, Truthout and other outlets.