The Worst is Still Yet to Come

The bad news about our nation's economic crisis is that we haven't begun even to smell, let alone see, the true impact of this nightmare. Even in its roller-coaster shifting, we still can't imagine where this financial tsunami will take us. People haven't begun to realize the losses they will suffer when this is finally over.

Today will be another bloodbath on the capital markets, and all signs indicate it will be another tough day for investors. Basically, the market hasn't come to the realization that the losses in the Collaterized Debt Obligation (CDO) market are in some cases two and three times larger than the principal invested.

Increasing debt limits to cover the principal is nowhere near solving this calamity; in fact, we're probably exacerbating it. The fundamentals of the credit market are currently being changed by government intervention. This epiphany may lead to another panic and huge sell-off in the equities market as well as the forced liquidation of commodity holdings.

They will need this immediate liquidation in order to receive more U.S. dollars necessary to pay for losses in the CDO market. This will lead to lower commodity prices, which would lead consumers into believing that the current inflation of our money supply is no longer a problem.

Once this trade begins to fully unwind, then history's greatest inflation of the money supply will have an even greater impact on Main Street. This will take at least months and probably years to come to fruition. But believe this: The die has been cast and the bloodletting has begun.

The Markets Have Already Spoken About the Next President

The wild swings on Wall Street every day are almost to be expected, but they still are hard to stomach by even the most seasoned investors.

The extreme volatility in the markets, however, is very telling about the attitude of businesses, consumers and the larger investment community. In other words, no one seems to be optimistic about Nov. 4 and what is in store for the country in the months and years to come — whether the leadership is Republican or Democrat.

Why? Think Finance 101. The “efficient market theory” is one of the fundamental tenets of finance that suggests prices for assets like stocks and bonds reflect all known information. If that hypothesis holds true, the markets have already given their vote of confidence — or lack thereof — on both candidates.

It seems that the daily capitulation and multiyear lows in the capital markets are a reflection that investors have little confidence about the state of our economy in the coming months — regardless who is elected as commander in chief on Nov. 4. This does not bode well for consumers, businesses or the new administration.

Do any of you reading this blog truly believe that Obama or McCain will have an immediate positive impact on the market if elected? Considering Sen. Obama's inexperience in understanding how global economies work and what he's now proposing economically for the country, this could spell further doom and disaster for the world economy. On the other hand, McCain may have the experience, but does he have the temperament and discipline to leave well enough alone until the market corrects itself?

I would welcome feedback from you sophisticates with strong opinions on who is best to guide us through this economic tsunami. Please don't spew the party lines in responding, just give us hard facts and figures that makes sense as we move dangerously ahead.

Biden vs. Palin

Why is Sen. Joe Biden (D-Del.) getting a huge pass from the elite media and Alaska Gov. Sarah Palin (R) being ridiculed as the world watches?

While one has to acknowledge that the biased media has used her selection to weaken McCain's chances of capturing the White House, they certainly haven't succeeded in diminishing her qualifications, experience and good nature with everyday Americans.

The latest from Mr. Biden, suggesting that Barack Obama would face a "generated crisis" early on if he is elected, is only the beginning of his gaffes. Imagine how the media would have pounced on Palin for saying something so outrageous. What's even more pathetic is supposedly credible media giant NBC News refuses to air Biden's remarks.

Why are we continuously allowing the outrageously prejudiced and unashamedly biased media and Obama PR machine to manipulate us into believing that Biden, not Palin, is the best choice for vice president in this upcoming election?

If one closely examines Biden’s record and past predictions, the outcome would be downright frightening. The Democratic VP nominee’s solution for Iraq was to divide the country into four provinces so that each of the factions could have their own jurisdiction, rather than the united country that they have now. The reason he's known as the gaffe machine is because he puts his mouth in gear before putting his brain in gear. Is this really the kind of individual we want sitting in the Oval Office?

While Biden gets no scrutiny from the press, Palin is being lynched and hammered on the hour. Regardless of how you feel about the Alaska governor, can you honestly say that this is fair and balanced?

Even though Sarah Palin doesn't come from the elite (Harvard, Yale, Stanford) class, her background and values are those of middle-class and everyday Americans. Interestingly enough, that is a concept that is fairly new to us and it's difficult for the elite and non-elite class to digest. It's difficult for the elite class because they’ve always had control and difficult for non-elites because they've always accepted being ruled by an elite class that is clearly out of touch.

As I think about this more, it has been the elites who have and continue to destroy the world and its system of values and virtues. Unfortunately, people just don't adjust to change as well — as demonstrated by the fact that Obama, who is supposedly the change candidate, surrounds himself with the liberal elite establishment from the East and West coasts, whereas when McCain selected someone outside of that group, she is pilloried. Pilloried for not being the kind of person that the elite and the so-called intellectuals of this country feel she should be.

Go back and think about all the things that Biden has said that have been false and laughable and are being ignored in this campaign. Many people, including this pundit, are beginning to wonder out loud that maybe having Palin as vice president is not such a bad idea compared to what the country would be in store for with Biden.

Mayday! Mayday! Do your own examination of these candidates and draw your own conclusions. Just don't allow yourself to be horse-whipped by the media into believing who and what these candidates really are.

This Election is Far from Over

It is not a foregone conclusion that this election is over, despite the media and intellectual elites’ effort to make us believe so.

People are still unsure about who Sen. Barack Obama is. I find it amazing that, no matter how charismatic, charming or intellectually superior Barack is, there still remain serious questions about his experience and unapologetic, off-the-charts liberal record.

I still don't see how anyone in their right mind could argue that the senator from Illinois is more experienced and prepared to lead this country than John McCain is. McCain may have many issues that plague him, but leadership, wisdom and having been in the line of fire are not among them. (Sarah Palin is another story, and is definitely hurting his chances of becoming president.)

While Sen. McCain (R-Ariz.) is arguably the better of the two candidates on security and foreign policy, this war has had significant domestic economic effects. For one, because of the ongoing conflict, we have been unable to fully exploit the oil resources of Iraq. Moreover, some of Iraq’s neighbors and friends in the U.N., such as Venezuela, have fought us economically, by restricting the oil production from their own reserves. To make matters worse, China’s growing economy has placed increased demands on the world’s already tight energy supply. While not a direct consequence of the Iraq war, this factor has certainly affected the supply and price of oil.

The fact of the matter is that the American electorate has come to view the war on economic, rather than merely political, terms. The threat of terrorism is seen as secondary to America’s economic security.

This is where Obama obtains his major advantage. McCain has admitted that he is not as strong on economic issues. Moreover, his chief economic adviser, former Sen. Phil Gramm, put his foot in his mouth when he demonstrated a complete lack of empathy with the plight of the American worker, calling this a “mental recession” that had no basis in economic reality. The facts on the ground in recent months have certainly indicated otherwise, and further expose McCain to the accusation that he just doesn't get it on domestic economic issues.

If Sen. Obama isn't leading comfortably by six points or more the weekend leading into the election, this could spell a serious upset in the making by Sen. McCain. Word to the wise: Don't count your eggs before they're hatched; just go out and vote for the candidate of your choice.

The Powell Effect

The ink is barely dry on this morning’s paper and the Obama camp is already hinting that Gen. Colin Powell could play a pivotal role in an Obama administration.

The cynic would say that was exactly what was intended with yesterday’s endorsement. Gen. Powell saw the writing on the wall, and figured he better get while the gettin’ was still good.

I disagree. Colin Powell is an admired friend; one whom I know rises above the political winds and the spoils of victory. If what the cynics say were true, we’d be addressing him as President Powell in the wake of the successful Gulf War.

But as much as I admire and respect him, Powell made the wrong choice yesterday. Unless he’s changed his party affiliation, Gen. Powell is still a Republican, and Sen. Obama is as liberal as they come. Just ask yourself this: If there were a white liberal Democrat running for president against McCain, would Gen. Powell’s decision been any different? Would his announcement on "Meet the Press" been any less prominent? The point is it’s easy to get caught up in the potential significance of this election, and I think that’s what happened with Gen. Powell.

I can’t say I didn’t have similar feelings myself. Sure, when Obama first came on the scene, I felt that sense of history being made. I still do. But there’s so much more that makes a man (or woman) right for the highest office in the land, and frankly, it’s those doubts that should have caused Gen. Powell to give further pause to his decision.

As “electrifying” as President Obama would be, how quickly would that luster wear off should the winter months bring a greater Afghanistan threat? Or the Russians wade deeper into the former Soviet republics? You have to imagine the world’s tyrants will test Obama from day one.

The Illinois state Senate is not the Oval Office. And Gen. Powell would have done well to remember that you don’t put your greenest soldiers on the front lines in the heat of battle.

Debating the D.C. Scholarship Program

I was in attendance at the last presidential debate at Hofstra University in New York and was most intrigued about the exchange between the two candidates on the D.C. Scholarship program. The attention given to the role of vouchers and school choice in education reform in the last presidential debate notwithstanding, the magnitude of the worldwide financial crisis was a powerful confirmation of the essential importance of choice to the future strength of the United States.

What was most interesting about the debate was Barack Obama's position that we should not find out whether vouchers should play a central role in education reform and state the facts about how vouchers have single-handedly empowered families and drastically improved the educational experience of many young people.

When John McCain raised the D.C. Scholarship program as an example of a successful project to give parents the same choice over schooling that both Sens. McCain and Obama and their wives had themselves enjoyed, Obama's response was that the data do not show that vouchers work — implying that charter schools were the only choice alternative.

But such data as do exist contain strong suggestions of success, and one of the principal purposes of the D.C. program is to provide enough data over a five-year period for the experts to make some definitive judgments in the context of a federally funded and -administered program.

There are privately funded and state-funded programs in several cities. Milwaukee was the pioneer city, where the results have been very positive, and there is a privately funded program in D.C., where studies are also positive but not definitive about the impact on children. The D.C. Scholarship program is designed in part to yield a statistically sound evaluation. The parents in Washington have registered their evaluation, and in their estimation, the program is overwhelmingly successful and has drastically improved their children's educational opportunities.

Time for Accountability on the Hill

Americans are voting with their wallets like never before.

A record number of Americans are pulling their money — or what’s left of it — out of the stock market. It is not surprising, given that yesterday was the worst day in the stock market since the crash of 1987 and last week was the worst on Wall Street since 1933.

Americans are sitting on more than $1.0 trillion in credit card debt, which is growing by the day, and it seems certain that the recession will be deep, long and painful. Unfortunately, it seems that all of the elixirs that the administration has injected into the economy and financial system cannot restore the confidence needed to stabilize the markets.

But this should not be surprising. Why? Because politicians are asking us to trust that they are capable of fixing the problems and protecting the American consumer, but it was the politicians who created a highly flawed system — starting with housing finance policy and regulation a decade ago — that is crippling the health of the global economy. Ironically, they now want to play watchdog over a solution when they allowed their “solution” from a decade ago to operate essentially without regulation or oversight. In the process, their legal umbrella enabled and facilitated corruption and protected those who enriched themselves, passed risk on to the American public, brought the global financial system to a halt and washed their hands of the matter.

Again, it is not surprising that the American public, corporations and the global financial community are unwilling to commit the much-needed capital to bring the market and economy out of the doldrums when Congress has breached their trust and seems to be above reproach. We cannot expect confidence to be restored until those on the Hill who created this mess step up, take ownership and assume accountability for creating a “solution” that has had less oversight than even the gaming industry. Before Congress goes on its witch hunt on Wall Street, perhaps they should look in the hallowed halls of the Capitol.

What We Can Learn from Paulson’s Leadership

Treasury Secretary Henry Paulson has stepped up at the right time not only to inject much-needed liquidity into the financial system, but also to restore confidence throughout global markets.

Paulson has been instrumental in leading a global effort to avert a complete implosion of the global financial system. The unprecedented move in the stock markets yesterday — including the Dow Jones — are a testament that the extraordinary measures by the Treasury, Federal Reserve and FDIC, among other agencies, over the last month have been working to restore confidence in the system.

While many Americans object to Paulson’s efforts as a way to protect friends on Wall Street, it was on Wall Street that he gained an invaluable understanding of the markets, their mechanics, and the dynamics within. We should have greater confidence in his leadership because it is his real-world experience that has enabled him to bring meaningful solutions to the system and provide leadership within the global community.

In fact, it is his mastery of the markets that is in stark contrast to many members of Congress who have testified on the economic matters but clearly do not understand the speeches on this subject that have been prepared for them. House Speaker Nancy Pelosi’s (D-Calif.) recent comments have made it clear that she is more interested in her political positioning than understanding what she is saying about the financial market collapse.

Sen. Obama's Myth that Reduction in Defense Spending Can Pay for Social Programs

The Obama campaign is quick in reminding us that if it were not for the Bush wars overseas in Iraq, we probably could lessen the financial crisis that we're now facing.

Anyone with a grasp of Economics 101 knows that their rhetoric doesn't match the reality of the dire situation that Americans face. Sen. Barack Obama (D-Ill.) would have us believe that it's military spending, and not the excessive social programs that he's advocating in his campaign, that will further damage and tank the U.S. economy.

Where is the money going to come from to pay for expensive new social programs that Mr. Obama seems determined to enact if elected? The military budget is an easy target, but even if we cut military spending to its post-war low, that is only .7 percent of GDP.

The United States spends 3.7 percent of its GDP on its military, less than China's 11 percent, more than France's 2.6 percent and less than Saudi Arabia's 10 percent. This is historically low for the United States since it peaked in 1944 at 37.8 percent of GDP (it reached the lowest point of 3 percent in 1999-2001). Even during the peak of the Vietnam War, in 1968, the percentage reached a high of 9.4 percent.

If the military budget is cut and we raise the white flag in Iraq and Afghanistan, it will contribute less than 1 percent of GDP to other programs.

The truth is, the U.S. spends a significantly smaller percentage of its national income on the military, even with the war, than it does on entitlements. Even if the U.S. completely eliminated military spending, our entitlement programs are not able to properly fund in the current form.

Benefits must be adjusted for the times. What we don't need are tax-and-spend politicians, but leadership that is willing to make tough and necessary decisions that will put policies and programs in place to ensure that what we're facing today can't and will not ever happen again.

Bailout Trumped Common Sense

With the financial markets sinking, Armstrong Williams compares the situation on Wall Street to that of his own family's experiences working a farm. Williams points out that not everyone gets a bailout, so why Wall Street?

Government-Created Jobs Will Put America Back to Work

When politicians tell voters that the government will create jobs through infrastructure programs, they do not realize that these programs may crowd out jobs in the private sector. The money for these infrastructure projects has to come from somewhere to pay for those government jobs.

When the government raises taxes to pay for “new” government-sponsored jobs, it takes that money from private businesses or consumers, thus reducing jobs in the private sector. Thus, usually, government spending does not result in a net increase in total jobs in the economy. Maintaining and upgrading our decaying infrastructure is important as an investment in our economy. It should not be a jobs-creation program but an investment program.

As most of us know, the government is not noted for its efficient use of taxpayer money. Compare the U.S. Post Office to Federal Express and UPS. Look at the $500 toilet seats purchased by the Pentagon and the infamous Alaskan Bridge to nNowhere. Construction projects usually cost more than in the private sector because of pork barrel requirements such as living wage requirements, union requirements, complex bidding procedures and the latest lobbyists’ pet requirement.

Under the best of circumstances, the government does not spend money as efficiently as the private sector or consumers. Consequently, it is generally more efficient to let consumers and private businesses spend their hard-earned money where they see fit rather than have the government spend it for them.

Americans Let Pundits Sway their Votes

Armstrong Williams says that Americans are allowing the pundits and the news media to influence and sway their opinions of the presidential candidates.

There Was No Bailout; It is a Rescue Plan

Many people (including Yours Truly) were concerned that the $700 billion rescue plan was a coordinated effort to bail out the Wall Street executives whose firms contributed to the crisis that has consumed the global economy.

The more recent emergency measures by the Federal Reserve and central banks around the world since then should be evidence that the bailout was, in fact, a desperate but much-needed measure to keep the financial system intact and the infrastructure afloat. Furthermore, the abysmal performance of securities exchanges around the world serves as a good litmus test that this crisis goes well beyond the concern of executive compensation and golden parachutes.

No doubt, naysayers will pounce on the myriad examples — such as AIG’s $400K boondoggle after the government stepped in to save it — in an attempt to prove that the package is flawed and it is propping up the perpetrators of our economy’s financial crimes.

Of course it is. But the absence of even the most “flawed” plan would have been cataclysmic. There will be time enough to go back and point fingers, place blame and prosecute those who have been reckless with our money. Until then, Paulson, Bernanke, et al are taking the drastic measures to keep historians from rewriting textbooks about the Great Depression as the worst economic disaster in our history.

The Debate that Really Won’t Matter

Unless Barack Obama really chokes, tonight’s debate really won’t move the needle of public opinion in John McCain’s favor. Oh, plenty of Americans will be watching, but I would wager that a dwindling few of them remain truly “undecided.” This month’s financial mess has served to crystallize in voters’ minds what they were sensing in their guts for far longer — that the Republican Party just isn’t up to the task of addressing the serious issues facing our nation right now.

To be clear, that’s not to say that the GOP can’t return to its once-dominant role as the party of prosperity. But for now, Americans aren’t buying what Republicans, at any level, are selling.

The more I think about it, the more I’m convinced this goes beyond just having a bad year of Abramoff-type scandals, bathroom-stall encounters and federal indictments. Those don’t help, but the larger problem is one of losing their own identity.

The party I knew fought against wasteful spending at all costs; they didn’t take the path of least resistance when faced with tough choices, as congressional Republicans often did with Bush in the White House. I’m not piling on here, but we all know the first step toward recovery …

So why does this matter to John McCain, you ask? After all, he’s the un-Bush, the one who takes on establishment Republicans. Well, yes and no. Yes, he is an independent-minded thinker, but he’s still brushed with the same coat of paint that has stained the entire party this election cycle. And no, in these final four weeks, McCain will not need to go on the offensive, and that means trotting out some tired lines about the tax-and-spend liberal tendencies of Obama. That sort of hackneyed message just doesn’t appeal to the glassy-eyed hopes of young voters.

Irrespective of his policies and their impact on the electorate, Sen. Obama has elevated above those arguments. Tonight’s debate once more will allow him to look presidential. And that’s why you won’t see too much movement in the polls later this week.

Taxing the Rich is a Free Ride for Middle-Class Taxpayers

Voters are told by politicians that the government can raise more money by increasing taxes on the rich. However, they must follow the logical progression of the effect of higher taxes on the rich to see the true impact.

For example, increasing taxes reduces the number of jobs in the private sector. Higher taxes mean the rich have less money to spend for goods provided by the private sector and less money to invest. Less money spent in private-sector consumption means few private-sector jobs. (Housekeepers, gardeners, artists, jewelers and high-end restaurant personnel need to begin looking for new jobs!) Less money to invest means less money in the bank that can be loaned to consumers for homes. It also means less money is available for businesses to expand and hire more people.

Taxing the rich does not hurt those who are already wealthy as much as it does those hardworking young people with the drive and intelligence who add the most value to our society and who are trying to become wealthy. It is the entrepreneurs and small-business people in the U.S. who provide the bulk of the jobs and most of the country’s growth. If the entrepreneurs and small businesses have less money from their enterprises, they will have less money to invest in their business and therefore will hire fewer employees. If taxes are high enough, they may even decide the risk of being an entrepreneur and small-business person is not worth the risks.

Historically, the Laffer Curve shows us that when marginal tax rates are increased, the government generally takes in less revenue as taxes because people modify behavior to reduce taxable income in order to pay less taxes, and there is less economic activity creating income. Americans are not generally aware that the wealthy pay more taxes when rates are low than when rates are high. In 2006, the top 5 percent of taxpayers paid 60 percent of all income taxes while earning 37 percent of the income. The bottom 50 percent of taxpayer paid 3 percent of income taxes. The wealthy paid a much lower percentage of income taxes in the 1960s and 1970s when marginal tax rates where much higher.

Regulation and the Law of Unintended Consequences

The current financial crisis is a result of the law of unintended consequences of two political policies promoted by both Republicans and Democrats since the Great Depression: 1) encouraging homeownership for all Americans regardless of whether they can afford the costs and 2) over-regulation of the financial community. Both policies have turned into a deceptively sweet bubble of air in the veins of the economy.

First, the government artificially inflated residential real estate sales through several laudable — but sloppily executed — policies such as: 1) tax breaks on interest and property taxes for homeowners; 2) implicit government guarantees of the debt of Fannie Mae and Freddie Mac to purchase conforming home mortgage loans; 3) relaxed credit standards on home mortgage loans permitted by the banking regulators; and 4) encouragement of the collateralization and sale of mortgages to investors.

In the short term, these policies had the beneficial effect of subsidizing housing costs and injecting extra liquidity into the housing market. Over the long term, these policies weakened the economy by inflating housing prices and by encouraging the financial community to make risky loans to homeowners who would not otherwise get a loan in the unregulated mortgage market. The results, as we now see, are disastrous.

Specifically, American consumers were encouraged to buy homes whether they could afford them or not. Homeowners were also lulled into believing that homeownership was an investment and not a housing expense. The annual costs of homeownership with mortgage payment, property taxes, insurance, utilities and maintenance can be over 10 percent of the value of a home. That means a home has to appreciate more than 10 percent annually in order for it to be a good investment. These housing policies significantly contributed to driving up the prices of residential real estate over the past 20 years. They also contributed to over-leveraged homeowners and more risky mortgage loans held by banks and investors.

Don't think for a moment that the passage of today's federal government's far-reaching and historic plan to bail out the nation's financial system, which President Bush signed into law, will resolve these woes and return our economy to stability. Yes, the House voted 263-171 to make this possible and it's well-known in Washington elite circles that this will only give a temporary reprieve to Wall Street and lobbyists. It will, however, do nothing for everyday Americans who will continue to lose their homes and life savings because of unbelievable greed and highly calculated risks that went South.

Stay tuned: Much more to come.

Obama Stretching His Lead

I like to make predictions. It’s in my blood. I predicted the Redskins would defeat the Dallas Cowboys Sunday in Dallas. Oh, I didn’t tell anyone because I love my ’Boys, but I (sadly) got that one right, too.

And so I’m making another prediction today — Barack Obama will continue to dominate the campaign high ground for the next few weeks, perhaps stretching his lead to as much as double digits.

I know this for two primary reasons. First, the narrative of this financial crisis facing America plays to Sen. Obama’s strengths — he’s measured and thoughtful in his responses and in the principles he lays out. Some would argue that he’s been too vague, but that’s what presidents do — set priorities and let the bean-counters sort through the numbing details.

Second, the Republican brand continues to haunt John McCain and his campaign. Countless times over this week you heard the phrases “Bush administration” and “Republican-led Congress” of the past eight years presiding over this ticking time bomb. As my momma likes to say, “the chickens have come home to roost” on this one, and, whether the blame is well-placed or not, the Republicans are bearing the brunt of this bailout criticism.

The Obama machine will roll again today with the Biden-Palin debates. Sen. Biden is an institution in this town, and he knows how to rabbit-punch verbally. And while Sarah Palin is the journey-woman who puts the human touch in John McCain, she’ll get her lunch handed to her tonight if she performs as poorly as she has lately with the national press corps. Say what you will about the networks, but they only ask the questions. It’s up to the candidates to pivot and parlay meaningful responses that strike at the heart of why they deserve elected office. I know Sarah Palin has that fire in her belly; I just fear I won’t see it in tonight's debate.

Oh by the way, why aren’t the Republicans and fair-minded individuals demanding the removal of Gwen Ifill from moderating this debate? If Obama-Biden win in November, she will hit a financial jackpot with her soon-to-be-released (Random House) high-praise book about Sen. Obama.

Wow, only in America. Random House is laughing all the way to the bank. Clink … Clink … Clink.

The Other ‘M’ Word

America has heard a lot of talk this month about “meltdowns” and the financial calamities that await us if the Congress doesn’t act soon and with a singular voice that our credit markets are going to be all right.

But have you all been paying attention to what’s taking place off the stock exchange? First it was Bank of America’s announcement that it was buying Merrill Lynch. Then Washington Mutual collapsed and will no doubt get folded into another entity. Then Citigroup bought banking giant Wachovia.

Detecting a pattern here? All the major customer banks in this country are consolidating into so-called superbanks, or the other ‘M’ word — monopolies.

The Consumer Federation of America is not so sure this is a good idea. Much like the airline industry, banks compete for customers’ attention and their dollars. They offer neat perks such as free checking or no fees on withdrawals from ATMs. Didn’t like the rate your bank’s credit card offered you? No problem, just threaten to take your business elsewhere. See, that’s the beauty of so many mom-and-pop banks to go along with the mega ones — we could price-shop and get a better deal. The Federation fears we’ll lose that ability, to some extent or another, and I’m inclined to think they’re correct.

The jury is still out for me on whether I like this move or not. I do know one thing, however — a functioning bank sure beats no bank; or long lines of angry customers on bank runs to retrieve their savings, like the Indy Bank episode earlier this year. That’s bad news, and something we can ill afford. In fact, we’ve been seeing secret bank runs now, as individuals try to get their deposits under the FDIC-insured $100,000 level in order to have some guaranteed protections. Raising that deposit rate, as both candidates have endorsed, is a good idea.

But one final political point: For decades, I’ve heard Democrats rail against the power of “Big Oil” and “Big Business” and “Big HMOs.” It now appears that “Big Banks” will be added to their litany, and Democrats will only have themselves to blame. But they hope you will forget that minor sticking point as they demagogue the issue in future tirades and accusations of bank greed. They won’t remember this move was a matter of sheer survival, so it’s up to us to remind them …

Not Enough Known About Obama

Looking at the presidential candidates, Armstrong Williams says that Americans just don't know enough about Sen. Barack Obama's record, campaign, and what he is really saying on the campaign trail.

The Cost of Business as Usual on the Hill

Congress once again could not get out of its own way as it failed to pass the critical $700 billion rescue plan.

It seems no one on the Hill is willing to acknowledge the gravity of the financial crisis, because there seems to be no urgency to take the much-needed action to keep our entire financial system afloat. If Congress really understood how crippling this crisis is, they would know that inaction has a price as well.

As the broader stock markets tumbled, more than $1.2 trillion of value was lost — well beyond the cost of the proposed package. Instead, both sides of the aisle are more worried about pushing their agenda and pointing the finger at the other party in an effort to find blame or shirk responsibility.

Now is not the time for business as usual on the Hill; there will be time enough to show that the nature of our political system — both Republican and Democrat — is to blame.

In the meantime, what is striking is that many members of Congress expressed concern about giving too much “power” to the Department of Treasury for fear that Secretary Henry Paulson would abuse the position. It seems instead that Congress has abused its power to jockey for position while letting the markets, confidence and hope for Americans fall further.

If I were a member of Congress, I would quickly acknowledge or even concede (gasp!) that the financial and market experts don’t reside in the hallowed halls on the Hill, but rather with the Treasury, the Fed, and the leadership in those offices. Now let them do their jobs.