It’s the economy, stupid

One of my friends recently said he hoped John McCain just kept on talking about Iraq, because at the end of the day this election will come down to the economy. That was even before this whole Wall Street mess, which has put the spotlight entirely on the economy to the exclusion of everything else. You do know a car bomb hit our embassy in Yemen yesterday, right? You don’t? Well, I’m sure you know that on Monday McCain said the fundamentals of our economy still remain strong.

I hate that my job as a political commentator occasionally reduces me to this, but unfortunately I have to point out that the economic tragedy for America … helps Democrats. Anything that moves attention away from foreign policy to domestic issues helps, despite the complete and total international disaster Republicans have created. Why voters haven’t realized that the party who didn’t screw things up should be trusted to fix things, well, that’s just one of life’s great mysteries.

But back to the economy. As far as I can tell, McCain’s plan centers around getting rid of greed and corruption on Wall Street. OK, the second part sounds great, but getting rid of greed on Wall Street? Sure, I’d like the whole world to hold hands and sing Kumbaya, but if anyone believed I could make that happen in the next four years, well, I’ve got a bridge to sell you up in Alaska. More importantly, “getting rid of greed and corruption” won’t solve the underlying problem here, that banks took risks they shouldn’t have taken.

This whole mess goes back to the subprime mortgage crisis and the enormous debt it created for nearly all American investment companies (and those who insure them, like AIG). Greed and corruption aren’t the problems, and as a lover of the free market, I hate to say this, but what we really needed was more oversight and regulation. We should have seen this coming. As I read recently on the Huffington Post:

We also need “speed bumps.” Every financial crisis historically has been associated with the very rapid expansion of particular kinds of assets, from tulips to mortgages. If you dampen that, you can stop the bubbles from getting out of control. The world wouldn’t disappear if we expanded mortgages at 10 percent a year instead of 25 percent a year. We know the pattern so well we ought to be able to do something to curtail it.

As an investor I have to point out that the panic gripping markets right now makes this a great time to buy. I know that doesn’t make a whole lot of sense, but when investors panic they tend to sell stock for far less than what — and I can’t believe I’m going to say this — the company’s fundamentals would indicate they should sell for. One caveat, though: Never buy individual stocks, but rather some sort of market index instead.

OK, now that I’m done geeking out, back to politics. The other real problem here for McCain besides the boneheaded “fundamentals” comment and his broad perception as someone more well-versed in foreign affairs than domestic ones is that … well, actually, I think that sums it up pretty well. Voters do not perceive McCain as someone who can handle an economic crisis. Obama has done a very good job of making McCain look like he just doesn’t understand the problems faced by average Americans, and McCain has reinforced that idea with dumb comments and bad ideas.

And, in case anyone forgot, a car bomb blew up at our embassy in Yemen yesterday. “The attack Wednesday killed 16 people, including a young American woman who was recently wed in an arranged marriage and six militants — the deadliest direct assault on a U.S. Embassy in a decade.”

But right now Americans seem poised to vote their pocketbooks, not foreign policy.

Colorado Independent’s blogumnist (blogger-columnist) Jeff Bridges has worked in Democratic politics for the last 10 years, serving as communications director for two congressional races in Colorado and two governor’s races in the Deep South. Bridges also worked as a legislative assistant in Washington, D.C., with a focus on military and small business issues.

Read Jeff’s latest commentaries.

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Jeff Bridges

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