Thursday, October 9, 2008

POLITICS: Bailout Backfiring

I love, from today:
Dow-Jones Average Is Down 1500 Points This Month

The Dow Jones average dropped another 189 points yesterday. It is off over 1500 points during October alone. Here is a chart of the Dow for the past 12 months.

The goverment is now toying with the idea of giving the banks even more money in return for (preferred) stock. In most counries this would be called nationalizing the banks. Who would have thought that the Bush/Cheney administration would go down in history as bigger socialists than FDR? The plan would be voluntary, but it still undercuts a basic tenet the Republican Party has held sacred for a century: the government should leave the private sector to manage itself. It will be interesting to see how the candidates respond to this new wrinkle.

The Fed gave A.I.G. another $38 billion yesterday, on top of the $85 billion they already gave it. People are hopping mad (and the $440,000 party the A.I.G. executives threw for themselves didn't help much). John McCain's strategy of talking about William Ayers 24/7 has apparently backfired and he is pulling the ads. While the base was eating it up, they were already in the bag. Independents didn't like it one bit. They want to hear how McCain is going to fix the economy, not who Obama knew 20 years ago. McCain doesn't want to talk about the economy, of course, since what he really and truly has believed his whole life is the free markets work best and the government should stay out of them. But as people watch their 401(k) plans and their pensions and their future go up in smoke, this is a real tough sell. He'd better think of something different to say in the next 50 nanoseconds or he is going to be--in the immortal words of George H.W. Bush--in deep doodoo.
WTF is going on???

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