The Washington Independent raises the question of why the presidential candidates are ignoring the credit crunch:
But, based on the contest so far, don’t look for either Sen. Barack Obama or Sen. John McCain to take on the biggest, most troublesome economic problem facing many American families and financial institutions — the credit crunch.
Like the budget deficit and rising Medicare costs, the credit crunch seems to be well on its way to earning the honor of the Issue Candidates Want to Ignore.
There are a number of reasons for this, the story says, including its complicated nature and the connections between campaign money and policy:
Dean Baker, co-director of the Center for Economic and Policy Research, says he does not expect either side to raise the issue:
“The Republicans don’t have much to say, and it’s not high on their agenda. The Democrats aren’t much different. Obama’s taken a lot of money from Wall Street, and the Republicans are tied to those people too. There’s just a real reticence to get into this.”
And that is to our detriment. As William Poole, the former president of the St. Louise Federal Reserve, points out the longterm costs of the bailout of Fannie Mae and Freddie Mac are likely to be high.
In Poole’s view, the bailout could wind up with a tab as high as $300 billion, or $1,000 for every man, woman and child in the country. That should be enough to get people’s attention, he said. So might figuring out who to blame for the mess, with suspects on both sides failing to rein in the mortgage giants as the firms lobbied Congress during the past decade. Poole, however, is not optimistic the candidates will take the bait.
Without a discussion of the credit crunch, real solutions are unlikely, as are mechanisms likely to prevent future meltdowns.
Hank Kalet 