Memo to Presidential Candidates on the Financial Crisis
Both candidates did a lousy job in last night's debate discussing the current financial crisis. From having talked about it here for the last few weeks, I have a modest suggestion on how to talk about it to the American people in a way that may instill confidence.
1. Recognize how important this is - if the financial crisis doesn't get resolved favorably, then it will be impossible to do anything. Health care reform and use of our military will be much harder if we're in a Depression.
2. You need to make sure that $700 billion is well spent. Priority #1. That means ensuring no conflicts of interest with the people running it (ie financial institutions giving advice on how to spend the govts money and selling their own crap tot he govt or getting paid by clients for advice on selling crap to the govt). Since Americans are now saddled with a Wall Street Incompetence Tax, make sure that this money achieves its goal of stabilizing the financial system at least cost to the taxpayers.
3. Work on a regulatory system that will ensure this does not happen again. Priority #2. We've been through the S & L, Enron and the other financial frauds, now this. Worse still, we deregulated after the S & Ls, then scaled back the SEC after Enron, Worldcom, Tyco, Global Crossing, Adelphia, etc and etc blew up in some of the largest corporate bankruptcies up to that time. We don't need 'deregulators' who have now changed their tune - and could well change back again when the crisis has passed, thus paving the way for more problems.
We know there will always be business cycles, and financial markets need some room to innovate. But when things go poorly, they shouldn't take down the national or global economy. We need some intelligent regulation that will not be undone by lobbying three or four years down the road.
It is a big job, but at least pretend you have a clue.
PS - John "my friend" McCain - you have some explaining to do because this quote of yours scares the crap out of me: "Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation."