Listen to Krugman

Princeton economist and New York Times op-ed writer Paul Krugman has some points on the current economic crisis worth hearing. The op-ed column is from Sunday and contains an excellent summary of what the problems are facing Wall Street and Main Street.

 

Op-Ed, Paul Krugman: Cash for Trash

from The New York Times, Sunday, September 21, 2008

Some skeptics are calling Henry Paulson’s $700 billion rescue plan for the U.S. financial system “cash for trash.” Others are calling the proposed legislation the Authorization for Use of Financial Force, after the Authorization for Use of Military Force, the infamous bill that gave the Bush administration the green light to invade Iraq. Read more

U.S. Treasury Department Fact Sheet on Proposed Purchase of Troubled Assets

(Source: U.S. Dept of Treasury)

September 20, 2008
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FACT SHEET:
Proposed Treasury Authority to Purchase Troubled Assets

Washington –  The Treasury Department has submitted legislation to the Congress requesting authority to purchase troubled assets from financial institutions in order to promote market stability, and help protect American families and the US economy. This program is intended to fundamentally and comprehensively address the root cause of our financial system’s stresses by removing distressed assets from the financial system. When the financial system works as it should, money and capital flow to and from households and businesses to pay for home loans, school loans and investments that create jobs.  As illiquid mortgage assets block the system, the clogging of our financial markets has the potential to significantly damage our financial system and our economy, undermining job creation and income growth.  The following description reflects Treasury’s proposal as of Saturday afternoon. Read more

Transcript: Meet the Press – Henry Paulson, Michael Bloomberg – Interviewed by Tom Brokaw

(Source: MSNBC.com)

updated 12:10 p.m. ET, Sun., Sept. 21, 2008

MR. TOM BROKAW: Our issues this Sunday: The American financial system in deep crisis. Read more

McCain Must Be Losing It

The Straight Talk Express was a thing of the past long ago.  Ever since John McCain has gotten within sniffing distance of the presidency, he’s been overreaching on a daily basis.  His message is all over the place and the man who pledged long ago to wage a campaign for the presidency on a higher plane has gone to the gutter even amid the most serious U.S. economic crisis since the Great Depression.  Mcain said today:

MCCAIN: You know, we’ve heard a lot of words from Senator Obama over the course of this campaign, but maybe just this once he could spare us the lectures and admit to his own poor judgment in contributing to these problems.

The crisis on — the crisis on Wall Street, my friends, started in the Washington culture of lobbying and influence-peddling, and he was right square in the middle of it. My friends, this is the problem in Washington. People like Senator Obama have been too busy gaming the system and haven’t ever done a thing to actually challenge the system. That’s not country first. That’s Obama first.

Give me a break.  The “culture of lobbying and influence-peddling?”  There are two problems with this.  Most of McCain’s campaign leadership is composed of lobbyists taking a break from K Street to invest some time into what they hope will be a cozy future.  This includes McCain campaign manager Rick Davis.  And, on the other hand, who in the I-want-to-be-president room is one of the Keating Five? 

McCain also went after Obama for taking Fannie and Freddie related campaign contributions as well as advice from two former CEOs of the companies.  What he didn’t say is that he’s taken his share of Fannie and Freddie dollars and two of his campaign leaders lobby for the companies. Hypocrisy.

While shoot from the hip John proposed a name today for what everyone thinks will be a new Resolution Trust-type federal entity, Barack met with a team of leading U.S. economists and outlined several principles he will apply to his consideration of Bush Administration and Congressional action on the crisis. 

After watching coverage of the two candidates today, it’s no question who looks like a leader: calm, cool, and calculating in the middle of crisis.  It was Obama.

Full Text: Obama Statement on Economic Crisis – Coral Gables, FL

(Source: Obama for America)

We are facing one of the most serious financial crises in this nation’s history.  The events of the last week – from the failure of Lehman to the bailout of AIG to the continued volatility of the market – have not just threatened the trading floors and high-rises of Wall Street, but the stability and security of our entire global economy.  Across this country, Americans are worried about whether they can make their mortgage payments, or keep their jobs, or ensure that their retirement is secure.  Truly, we are all in this together.   Read more