I CAN'T LOOK! TELL ME WHEN ITS OVER
Why is America in the current economic and banking crisis? If you've been reading our blog, you know that we are cats and our mission is to research and inform American voters. And if you're like us, that means you're cute, know how to find a sunny spot for a nap, and you're not that up on the history of banking in America. As the investigative cat of the group, I went online over the last few days to find out what I could.
HISTORY
What I learned was that several years into the Great Depression, in 1933, a large number of the commerical banks in America collapsed due to bad debt and the larger economic depresssion. During 1933, two laws were passed in the US Congress that are jointly known as the Glass-Steagall Act. These laws separated investment banking from commercial banking which was designed to curb speculation and it created the FDIC (Federal Deposit Insurance Corporation) which insures your deposits in the bank. Under these regulations, a bank could not offer investment, commercial banking, and insurance services. The regulations in the Glass-Steagall act were designed to prevent a similar bank failure from happening again.
MCCAIN SUPPORTS REPEAL OF GLASS-STEAGALL
In 1999, the Gramm-Leach-Bliley act repealed parts of the Glass-Steagall Act allowing commercial and investment banks to consolidate. This act loosened the restrictions on banks, brokerage houses, and insurance companies. John McCain was a supporter of this act and he voted for it. Phil Gramm is reported to be one of McCain's top economic advisors today.
Earlier this year McCain wrote about the success of bank deregulation and suggested it should be a model for the deregulation of the health care insurance market. "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."
McCAIN IN CURRENT CRISIS
On 60 Minutes this past Sunday (9/21), McCain said that he did not regret his support of deregulation of Wall Street. If you don't see the embedded video, watch it on YouTube.
Financial analysist and even conservative reporters are talking now about how McCain's handling of the events of the last week suggest that he is not the leader we need in the current economic situation. Albert Hunt on Bloomberg.com wrote that McCain stumbled and did not show a steady hand. He argued that the most revealing element was who each candidate turned to for advice on the financial situation - McCain's advisors were, in his estimation, much weaker. And McCain did not show an ability to converse easily on the economic situation and seemed uncomfortable with it to 'detatched observers.'
On ABC This Week September 21st, 2008, conservative columnist George Wills said,
"The question is, who in this crisis looked more presidential, calm and un-flustered? It wasn't John McCain who, as usual, substituting vehemence for coherence, said 'let's fire somebody.' And picked one of the most experienced and conservative people in the administration, Chris Cox, and for no apparent reason... It was un-presidential behavior by a presidential candidate." (go about half way into the clip linked above to see this part of the discussion)
The Washington Post wrote:
"A decade ago, Sen. John McCain embraced legislation to broadly deregulate the banking and insurance industries, helping to sweep aside a thicket of rules established over decades in favor of a less restricted financial marketplace that proponents said would result in greater economic growth. Now, ...the Republican presidential nominee is scrambling to recast himself as a champion of regulation to end "reckless conduct, corruption and unbridled greed" on Wall Street. McCain condemned the executives of failing companies for pursuing the very strategies the Gramm-Leach-Bliley Act made possible and said that regulatory agencies in Washington were also to blame. This even though in March McCain told the Wall Street Journal, "I'm always for less regulation."
OBAMA LEADS IN CURRENT CRISIS
The ABC This Week panel went on to praise Senator Obama's calm and measured handling of the week's events and the quality of his advisors. The Bloomberg.com article also praises the towering financial minds that Obama has been turning to for advice on the economy. They point out that Obama "has called for the overhaul of the financial-regulatory system and tougher enforcement well before this past week....Detached observers who watched [Obama] last week, especially in a Bloomberg Television interview, were taken by how conversant and confortable he was on the subject..."
The Bloomberg.com article goes on to say, "Tellingly, three former SEC chairmen, a Democrat, Arthur Levitt, and two Republicans, David Ruder and Bill Donaldson, have endorsed Obama. Donaldson, who was tapped by Bush to head the SEC, says Obama called him last year about the financial-regulatory problems. He has never heard from McCain. "Obama has been talking about the need for better financial regulation well before this crisis hit and has done some real thinking about it,'' says Donaldson, a lifelong Republican. "McCain comes across as someone who suddenly realized changes have to be made.'"
AMERICANS TRUST OBAMA ON ECONOMY
Polls continue to show that most American's trust Obama over McCain to fix our economic problems. Events of the past week, and the candidates handling of those events, suggest to this cat that most American's are right on about this one!
-Starbuck
www.cats4obama.com
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