Cross Post: McCain’s judgment in economics is inherently flawed

As the markets spin out of control, with wild swings based on calamitous events such as Countrywide, MBIA, Ambac, Bear Stearnes, Fannie Mae, Freddie Mac, IndyMac, Lehman Brothers, Merrill Lynch and AIG, why do many insist that Bush’s administration, or his party’s nominee, John McCain, have gotten anything right at all?

John McCain’s former top economic advisor, ex-U.S. Senator Phil Gramm of Texas, had a primary hand in the Gramm-Leach-Bliley Act of 1999 that eliminated the firewall protections made by the Glass-Steagall Act of 1933 between investment, commercial banking, and insurance services during the Great Depression when so many banks failed. As a result of this deregulation, we are now seeing the enormous problems of integrated services spread like a plague throughout the market as many of these financial players mixed investments and savings and high-risk loans together and across various business entities.

McCain’s economic proclamations and company kept should be an albatross around his neck. You cannot expect change from a man that hires people that called Americans, “a nation of whiners,” during an economic crisis of their making. Meaning: Phil Gramm had his hand in your misery and now blames you for it.

Phil Gramm continues to be major cog in McCain’s campaign.

How is that change we can believe in?

Late Addition: (WaMu, another bank, is headed for sale....Yahoo Business)
A quote from the link:

But TPG agreed to waive the clause after concluding WaMu needs all the help
it can get.
"It became clear that it would be in the best interests of
Washington Mutual and our investors to waive the ... provisions," Fort
Worth, Texas-based TPG said in a statement. "Our goal is to maximize the
bank's flexibility in this difficult market environment."
The efforts to
find a buyer, though, were being complicated by uncertainty about the magnitude
of losses still lurking in Washington Mutual's home loan portfolio.
"No
one knows what's in their books," said a person briefed on the talks
between regulators and banks, speaking Wednesday on the condition of anonymity
because of the sensitivity of the matter.

Citing unidentified sources, the New York Post said the potential
buyers include JPMorgan Chase & Co. and HSBC Holdings PLC., as well as Wells
Fargo. The banks all declined to comment.

Nice to see the whole financial system is in scared rabbit mode. Hopping up and down the road, looking for a way out while a Mack truck bears down on their position.

It won't be long now people. Look out below minimum wage workers. Get prepared for calamity you lower-middle class (under $50,000) per year people. Cut back considerably you upper middle class wannabes. The Rich: you'll go to your pile of bricks, lock you doors and come out when the getting is good again.

Good Luck All!

Economic Woe: I don't like Hurricane IKE or the U.S. Economy

Hurricane IKE path:

If you lived in the Caribbean this year, it has to suck. Haiti, Cuba, Turks and Caicos, all hit by the storms Gustav and now, IKE. Ike is heading into the Gulf, again, bearing down on New Orleans by this recent projection. My agnostic prayers are with you.

Today, my mother is seeing a bankruptcy attorney. Hopefully, he'll take the case. Because, folks, it is pretty grim for her (and myself) if she doesn't get the bleeding stopped. Unlike Fannie Mae and Freddie Mac, who have the U.S. government taking over their affairs, I haven't the power to takeover my mother's or my aunt's yet.

On my other blog, I related that I would address The Perfect Storm, aka, the current financial crisis. I have flaked out only due to a myriad of other concerns. Like getting food, shelter and gas paid for or at least addressed. Assuming I can get the research back on track, I'll complete it. But, if not, here's a few highlights:

• Longstanding energy issue via the politics of the Middle East
• Changes in financial rules, going off the gold standard, and supply-side economics via Milton Friedman, former President Ronald Reagan and former Prime Minister Margaret Thatcher
• Former Senator Phil Gramm's involvement in Enron and changing banking rules to allow Investment banks and Commercial entities to operate essentially under the same roof, sharing the same assets (and same liabilities) while being linked to the subprime mortgage maliase
• The degradation of the U.S. Dollar: Trade deficit, Balance of Payments and the China syndrome
• Engaging in the Iraqi war on dubious, and often, criminally wrong pretenses because it is about oil and Middle East restructuring. Meanwhile Saudi Arabia, Russia and Iran are all legitimately doing far, far worse to the United States. The crisis in Georgia may be a political trick to convince Americans to put McCain in office
• Globalization has made us a nation of consumers - not producers - undermining our status in the world as we are only 5% of the population, but use 20-25% of world's resources

Because of these and various underlying stories, there is a likelihood of a severe recession and possibly, the D-word.

People at the bottom will really feel it.

Good Luck riding out this Perfect Storm.