Thursday, September 18, 2008

Pig with the Lipstick eaten by Wall St bear?

Business Times - 17 Sep 2008
Democrats pounce on McCain's remark about the economy amid latest financial woes


HERBERT Hoover was one of the most intelligent and talented men to ever occupy the White House. A noted reformer, a humanitarian and an engineer who administered major refugee relief efforts in Europe during World War I and served as a successful secretary of commerce, Mr Hoover had the bad luck to head the winning Republican presidential ticket in 1928. He entered the White House at the outset of the 1929 Great Depression.

He failed to pursue effective policies to end the depression and has been remembered by historians as the US president who kept saying again and again for four years that the 'economy was fundamentally sound' while things went from bad to worse to horrible. All the while he insisted that if only Americans regained confidence and began to invest and buy more goods the economy would recover. It didn't.

So when the ghost of the Great Depression was hovering over Wall Street and a leading Republican politician insisted that the 'fundamentals of the economy are still strong', Mr Hoover's name was suddenly being recalled by members of the chattering class who seemed to be shell-shocked by the terrible financial news.

Lehman Brothers, America's fourth-largest investment firm whose name evokes the dignity and grandeur associated with Wall Street's old financial houses, announced on Monday it would file for bankruptcy after the federal government refused to use taxpayer funds on a rescue. That announcement was followed by news that another great financial firm, Merrill Lynch, agreed to sell itself to Bank of America for US$50 billion. And there were reports that American International Group, America's biggest insurer, was asking other companies and the Federal Reserve to help it raise capital.

And just as Washington, Wall Street and the media were trying to digest these pieces of news, Republican presidential John McCain sounded very Hoover-like during a campaign spot. 'You know that there's been tremendous turmoil in our financial markets and Wall Street and it is (a tremendous turmoil). People are frightened by these events,' Mr McCain said during a speech in Florida. 'Our economy, I think still, the fundamentals of our economy are strong. But these are very, very difficult times.'

Chris Matthews, the anchorman of a very popular political news show on MSNBC Television, Hardball, opened his Monday programme with the following teaser: 'Why is John McCain talking like Herbert Hoover? Depression or just depressing? Let's play Hardball. . . Did John McCain really mean to say the 'fundamentals of the economy are strong'?'

Mr Hoover, who presided over The Great Depression, said over and over again: 'The economy is fundamentally sound.' So is it fundamentally good politics to say, with the stock market plunging, that things are hunky-dory?

In fact, Mr McCain's remarks made for very, very bad politics. After he had gained a 'bounce' in the opinion polls in the aftermath of the Republican convention following his selection of Alaska Governor Sarah Palin as his running mate, Mr McCain, like the Dow Jones, is suddenly starting to drop. There were clearly some indications that the 504-point loss on Wall Street could transform this historic presidential election campaign once again.

Ironically, just a day or two ago, Mr McCain and Ms Palin seemed to be on the political offensive, reigniting the old culture wars between the 'elites' (liberal Democrats like Barack Obama) and 'ordinary Americans' (conservative Republicans like Mr McCain) and launching a massive campaign of personal attacks against Mr Obama, including a series of falsehoods.

For example, Mr Obama had supported a programme to help kindergarten kids to protect themselves against sexual predators. A McCain television ad accused Mr Obama of promoting 'sex education' for six-year-old children.

And after Mr Obama had mocked Mr McCain's promises to 'change Washington' and said that 'that's not change. That's just calling something that's the same thing something different. You know you can put lipstick on a pig, but it's still a pig', the McCain campaign released another ad accusing Mr Obama of comparing Ms Palin to a pig, arguing that Mr Obama was deliberately referring to Ms Palin's line during the Republican convention: 'You know the difference between a hockey mom and a pit bull? Lipstick.'

For a few days it seemed as though the main issue in this campaign was not Iraq or Iran or the high energy prices or the housing crisis or the financial squeeze - but whether Mr Obama equated Ms Palin with a pig, in addition to other reports and gossip about the somewhat exotic governor of Alaska, the Moose Burgers she made, her pregnant teenage daughter, and other items that the gossip sheet, People magazine, regards as important news.

In a way, you could say that following the alarming financial reports and Mr McCain's 'Hooverism', it looked as though Wall Street's big, scary bear ate the Pig with the Lipstick for breakfast.

Mr Obama and the Democrats came back swinging in full force and portrayed Mr McCain the multimillionaire as member of the economic 'elite' and as someone who is out of touch with those forgotten 'ordinary Americans'.

Hence the Democratic presidential candidate said that Mr McCain's 'stubborn insistence' that the 'fundamentals of our economy are strong' demonstrated that his Republican rival 'was disturbingly out of touch with what's going in the lives of ordinary Americans', adding that 'apparently (Mr McCain's) 26 years in Washington have left him incapable of understanding that the policies he supports have created an historic economic crisis'.

Mr McCain's aides countered by suggesting that when Mr McCain was saying that the 'fundamentals of our economy are strong', he was actually referring to 'continuing productivity of American workers', and that by attacking Mr McCain's comments Mr Obama was disparaging those workers.

Democratic vice-presidential candidate Joe Biden followed with another attack on Mr McCain, accusing him of being 'divorced' from the reality that was facing American's workers and recalling that former McCain economic adviser Phil Gramm mocked the talk about the current economic problems by describing Americans as a 'nation of whiners'.

It may be bearish on Wall Street, but the mood among the Democrats seemed to be quite bullish on Monday.

Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.

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