The Financial Mess

http://www.guardian.co.uk/commentisfree/2008/sep/16/economics.wallstreet?gusrc=rss&feed=worldnews

Joseph Stiglitz wrote a commentary in yesterday's Guardian about the Lehman Brother's failure. Here are a couple excerpts:

"Houses of cards, chickens coming home to roost - pick your cliche. The new low in the financial crisis, which has prompted comparisons with the 1929 Wall Street crash, is the fruit of a pattern of dishonesty on the part of financial institutions, and incompetence on the part of policymakers.

We had become accustomed to the hypocrisy. The banks reject any suggestion they should face regulation, rebuff any move towards anti-trust measures - yet when trouble strikes, all of a sudden they demand state intervention: they must be bailed out; they are too big, too important to be allowed to fail."

"The crisis in trust extends beyond banks. In the global context, there is dwindling confidence in US policymakers."

"Moreover, it is difficult to have faith in the policy wherewithal of a government that oversaw the utter mismanagement of the war in Iraq and the response to Hurricane Katrina. If any administration can turn this crisis into another depression, it is the Bush administration."

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I blame deregulation, which is a hallmark of McCain's economic strategy under the advisement of Phil Gramm (a leading proponent of banking deregulation in the 90's).

http://www.npr.org/templates/story/story.php?storyId=94640709
"The McCain-Palin administration will replace the outdated patchwork quilt of regulatory oversight and bring transparency and accountability to Wall Street," McCain said. "We will bring transparency and accountability, and we will reform the regulatory bodies of government."
McCain offered no details of what that overhaul would look like. But a spokesman said this is a time to update rules, not relax them, suggesting a break with Gramm.

Another hallmark of McCain's economic plan is that he'll have a lot of commissions. Read his issues pages - there's lots of calls for commissions http://www.johnmccain.com/Informing/Issues/

And, true to form, yesterday he called for another commission:
http://ap.google.com/article/ALeqM5hdX1csHuXbUFJ6REp97MjBsJouHAD937QR282
"Republican presidential candidate John McCain on Tuesday called for a high-level commission to study the current economic crisis and claimed that a corrupt and excessive Wall Street had betrayed American workers."

I don't think anyone (not even me!) needs a commission to figure out why this happened: greedy people didn't care about anything except getting as much money for themselves as they could. This economy has been built on air for a long time. Its nothing. It creates nothing except marketing and ways to move money/risk around. But, somebody's going to be left holding the bag. Here we are. I blame deregulators and greedy people. Greedy people are on both sides, they created the instruments and took advantage of them. I blame me if I have some of those instruments in my 401K plan and don't know it (I should know it). Everyone wants to get rich.

So, don't give me a commission McCain! If you need it to figure out what went wrong, you're not ready to be President of the United States.

For me, I just want to stay on the straight and narrow. I want to stay employed and not spend money frivolously (which luckily, was my goal for 2007). I need to build up my savings so I'm not immediately in trouble if something unexpected happens.