Lehman And Merrill And AIG, Oh My!

As the financial world appears to crumble around us, here's baseline react today from the presidential candidates and their running mates:

-- John McCain thinks the "fundamentals of our economy are strong" and that Barack Obama is unnecessarily alarming the public.

-- Obama, meanwhile, cautions that McCain will offer the same "failed" policies of the last eight years.

-- Joe Biden, in a forceful speech in MI, emphasizes McCain's remark last week that he's "divorced" from real people's problems. (Clip after the jump.)

-- And Sarah Palin, in a turn reminiscent of Bill Clinton's 1992 "feel your pain" pitch, spins a populist line to CO voters. She noted that she's a small business owner, as are her relatives (service station for one and hardware store for another), and Palin said she knows what it takes to make ends meet. Empathy as campaign strategy. She also -- per the latest news of Lehman Brothers' collapse -- said she's glad the government is saying "no to using taxpayer money to bail out another one."

So McCain appears woefully, well, divorced from reality, but Obama seems unable to articulate a clear strategy to start digging the country out of this mess. Obama's proposed $1K middle class tax rebate is a fine thing and would certainly allow a family to buy additional groceries or fill the gas tank, but it does nothing, of course, to fundamentally shift the dynamics of a sinking economy. Yet McCain continues to advocate for an extension of the Bush tax cuts and for corporate income tax cuts. How could he possibly make those points in the homestretch of this campaign given the dramatic turn of events, from Fannie and Freddie to Lehman Brothers to Merrill Lynch and AIG?

"It's the economy, stupid," should be a rallying cry for Dems. It's not working, though. Not yet anyway. Could this week mark a turning point for Obama/Biden? Will the "three terms of failed Bush policies" line finally break through? The very serious and complicated market situation could underscore the party's cry for fresh and seasoned leadership in Washington. As yet, meanwhile, the Dems have been unable to halt Palin's impact on swing voters. The latest spates of dire financial news could help do the trick.

(JENNIFER SKALKA)

(After the jump, excerpts of Obama's prepared remarks today in CO. He does respond to McCain's comment today that the economy's fundamentals are strong. "What economy are you talking about?" he's expected to inquire of his GOP rival.)

The Change We Need

Monday, September 15th, 2008

Grand Junction, Colorado

This morning we woke up to some very serious and troubling news from Wall Street.

The situation with Lehman Brothers and other financial institutions is the latest in a wave of crises that are generating enormous uncertainty about the future of our financial markets. This turmoil is a major threat to our economy and its ability to create good-paying jobs and help working Americans pay their bills, save for their future, and make their mortgage payments.

Today offers more evidence that too many folks in Washington and on Wall Street weren’t minding the store. For eight years, we’ve had policies that have shredded consumer protections, loosened oversight and regulation, and encouraged outsized bonuses to CEOs while ignoring middle-class Americans. The result is the most serious financial crisis since the Great Depression.

I certainly don’t fault Senator McCain for these problems. But I do fault the economic philosophy he subscribes to. It’s the same philosophy we’ve had for the last eight years – one that says we should give more and more to those with the most and hope that prosperity trickles down to everyone else. It’s a philosophy that says even common-sense regulations are unnecessary and unwise; one that says we should just stick our heads in the sand and ignore economic problems until they spiral into crises.

Well now, instead of prosperity trickling down, the pain has trickled up – from the struggles of hardworking Americans on Main Street to the largest firms of Wall Street.

This country can’t afford another four years of this failed philosophy. For years, I have called for modernizing the rules of the road to suit a 21st century market – rules that would protect American investors and consumers. And I’ve called for policies that grow our economy and our middle-class together.
______________________

It’s not that I think John McCain doesn’t care what’s going on in the lives of most Americans. I just think doesn’t know. He doesn’t get what’s happening between the mountain in Sedona where he lives and the corridors of Washington where he works. Why else would he say that we’ve made great progress economically under George Bush? Why else would he say that the economy isn’t something he understands as well as he should? Why else would he say, today, of all days – just a few hours ago – that the fundamentals of the economy are still strong?

Senator – what economy are you talking about?

What’s more fundamental than the ability to find a job that pays the bills and can raise a family? What’s more fundamental than knowing that your life savings is secure, and that you can retire with dignity? What’s more fundamental than knowing that you’ll have a roof over your head at the end of the day? What’s more fundamental than that?

The fundamentals we use to measure economic strength are whether we are living up to that fundamental promise that has made this country great – that promise that America is the place where you can make it if you try – a promise that is the only reason that we are standing here today.

ICYMI, here's Biden: