Maybe the stock markets will bounce back and recover before the end of the day, but seeing the Dow Jones index fall below 10,000 for the first time (I believe) in the Bush presidency (lower than when Bush became president), is a symbolic blow of enormous proportions. I’ve long argued that giving workers a stake in the stock market through 401(k)’s led them to form the false impression that they were members of the investor class. People no longer see Wall Street as the enemy…their net wealth is tied up in those indexes. When the Dow falls, the day they can retire recedes into the future.
If the stock market remains sharply down today and tomorrow, it will be again be the economy that dominates tomorrow’s townhall-style debate between John McCain and Barack Obama. McCain knows the debate is critical.
…McCain appears to be engaged in especially serious preparations for Tuesday’s debate, one of his last opportunities to change the trajectory of a race that may be slipping out of his control. He is certainly doing more formal preparation than he did before last month’s debate in Mississippi.
McCain’s announced plan was to make every attempt to shift the focus of the campaign off of the economy and onto Barack Obama. In particular, McCain wanted to use a kind of Kevin Bacon seven-degrees-of-separation argument to tie Obama to the dubious activities of people for which Obama bears no responsibility. It was a weak strategy to begin with, but a tumbling stock market will make it impossible. Perhaps even more troublesome for McCain is the fact the Obama campaign has launched a major media campaign to re-raise and educate the public about the Keating 5 scandal. They created the KeatingEconomics.com website where, at noon, they will debut a 13-minute documentary about the scandal, McCain’s role in it, and why it mirrors the current mortgage crisis. This line of attack seems immeasurably more topical than McCain’s efforts to dredge up the Weather Underground’s domestic terror activities.
Moreover, the format of tomorrow’s debate is the townhall, where the questions come from ordinary citizens. Obama campaign strategist Robert Gibbs explains the problem for McCain:
“I think they’ve announced they want people to forget about the economy and talk about Barack Obama,” Gibbs said. “I think that’s very dangerous and very hard in a debate where you are taking questions from real people.”
McCain’s been preparing to go negative, but people want a sense of calm and confidence, not a growling curmudgeonly scold. John McCain has no clue about the economy and his record of corruption and deregulatory advocacy is poorly matched for the political moment.
The DOW was below 10k in 2004 (intraday)
It was below 10k for much of 2001, 2002, and 2003.
link
Yeah, I should have said that the last time it was below 10k was 2004. My bad.
well, if McCain approaches the debate like Palin did, he can answer any question that he wants – regardless of what is actually asked….
I don’t think that will happen, seeing as Brokaw’s book has been out for a while and dealt with 1968 instead of successful black politicians, and he won’t be afraid of being too hard on poor widdle Johnny the way Gwen Ifill just let Palin steamroll her as moderator.
on the other hand though, wasn’t/isn’t Brokaw the NBC “liaison” to the McCain campaign?
I didn’t see MTP yesterday, but he did bring up Ayers, which is totally bogus. At least Begala shot that down.
Then someone needs to bring up McCain’s PAL Raffaello Follieri who is in prison for fraud.
They can also mention his membership in that anti-communist group that the John Birch members wouldn’t even touch with a ten foot poll.
pole
After September 11, 2001 the Dow went down to about 7,200. I’ve decided for no reason that it will go down to that point again. Maybe the number reflects some kind of true value.
So in the End, do Republicans grow the economy while their in office. Or do they just steal from the poor and middle class, in the form of tax cuts for the wealthy, lower capital gains taxes, and $4.00 dollar a gallon gasoline or $149.00 dollar per barrel.
Stop worrying about a rebound in the Dow and how it might make the topic economy “go away”. It won’t. Bail-out efforts in the US and elsewhere have been too slow and too limited: the international credit structure has in the meantime suffered a Chernobyl type meltdown, which is now chain reacting through the global economy. McCain/Palin is collateral damage and toast. But that’s almost an afterthought.
Townhall format huh? Like with ordinary people mumbling into cheap microphones? I can only hope McCain’s hearing is as bad as his comprehension. “Eh? What was that? What did he say..?”
Now is the time in the race when the campaigns will play their trump cards. Obama camp plays the Keating 5 / Savings and Loan scandal with perfect timing. Lacking anything real to talk about, McCain will play the race card, and its gonna be ugly–expect them to drag out Rev. Wright again, the secret muslim smears, and whatever else nonsense they can think of.
Axelrod et al are not just calculating, they are lucky as well.
The Keating 5 we’ve all been shouting at them to use, they held firmly in their hip pocket until now during the last few weeks of the campaign when it will resonate with the tale of how the economy tanked and the character of the man who enabled the destroyers.
Smart timing, smart moves and all this while continue to talk about a road forward.
An Interview with Edward Wolff, professor of economics at New York University. Originally published in the May 2003 issue of Multinational Monitor. The May issue contains more articles on wealth and income inequality in the U.S. The data reflected the data in 1998, ten years ago and before the Bush tax cuts. Can’t imagine what the data collected today would show. As for 401Ks, look at what little wealth that provides average Americans compared to wealthy Americans.
Edward Wolff is a professor of economics at New York University. He is the author of “Top Heavy: The Increasing Inequality of Wealth in America and What Can Be Done About It,” as well as many other books and articles on economic and tax policy. He is managing editor of the Review of Income and Wealth.
I am shocked that the bailout didn’t unstick the credit markets. Totally surprised.
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Boy was I a sap. meanwhile the banks seem to be listening to Steve Miller’s “Go On take the Money and Run”:
So to recap: the bailout hasn’t had much of an effect on the credit markets, and the banks don’t want to participate. What was the reason for all this again?
you thought the announcement of a bailout would unstick credit? At a minimum, it was hoped that it would calm jittery investors. It was never contemplated that you could unstick credit without, you know, actually spending any money.
that is not true.
Just last week, i read plenty of predictions from people in the WSJ, the times business page, claculated risk that simply announcing a bailout would help the problem. In fact, i think it’s in one of my quotes above too.
Unfortunately this unwillingness by the stronger banks was inevitable given the “improvements” in the bill that passed. The much derided 3 page original refinancing bill was the way to go. By adding provisions on capital stakes for the treasury and measures limiting executive pay, the participating banks will look like they were partly taken over by the government. Any bank that can will avoid that black mark and rather reduce lending.
Main Street demanded a more virtuous bill and will now pay the price for this excessive virtue.
If you want to get a graphic idea what is going down in the credit markets, read the jolly entry filed under Chernobyl disaster in Wikipedia.
Jonathan Weil, If There Must Be a Bailout, Here’s How to Do It