Krugman is always spot-on -- until now. He's making a valid argument, but nobody who's in the running quite meets the bill. Perhaps that's just my way of throwing up my hands in despair over the economic disaster that is befalling the country, caused, clearly, by the Phil Gramm era.
Op-Ed Columnist
The 3 A.M. Call
comments (27)
new_york_times:http://www.nytimes.com/2008/09/29/opinion/29krugman.html
if (acm.cc) acm.cc.write();
By PAUL KRUGMAN
Published: September 28, 2008
It’s 3 a.m., a few months into 2009, and the phone in the White House rings. Several big hedge funds are about to fail, says the voice on the line, and there’s likely to be chaos when the market opens. Whom do you trust to take that call?
Post a Comment »
Read All Comments (27) »
I’m not being melodramatic. The bailout plan released yesterday is a lot better than the proposal Henry Paulson first put out — sufficiently so to be worth passing. But it’s not what you’d actually call a good plan, and it won’t end the crisis. The odds are that the next president will have to deal with some major financial emergencies.
So what do we know about the readiness of the two men most likely to end up taking that call? Well, Barack Obama seems well informed and sensible about matters economic and financial. John McCain, on the other hand, scares me.
About Mr. Obama: it’s a shame that he didn’t show more leadership in the debate over the bailout bill, choosing instead to leave the issue in the hands of Congressional Democrats, especially Chris Dodd and Barney Frank. But both Mr. Obama and the Congressional Democrats are surrounded by very knowledgeable, clear-headed advisers, with experienced crisis managers like Paul Volcker and Robert Rubin always close at hand.
Then there’s the frightening Mr. McCain — more frightening now than he was a few weeks ago.
We’ve known for a long time, of course, that Mr. McCain doesn’t know much about economics — he’s said so himself, although he’s also denied having said it. That wouldn’t matter too much if he had good taste in advisers — but he doesn’t.
Remember, his chief mentor on economics is Phil Gramm, the arch-deregulator, who took special care in his Senate days to prevent oversight of financial derivatives — the very instruments that sank Lehman and A.I.G., and brought the credit markets to the edge of collapse. Mr. Gramm hasn’t had an official role in the McCain campaign since he pronounced America a “nation of whiners,” but he’s still considered a likely choice as Treasury secretary.
And last year, when the McCain campaign announced that the candidate had assembled “an impressive collection of economists, professors, and prominent conservative policy leaders” to advise him on economic policy, who was prominently featured? Kevin Hassett, the co-author of “Dow 36,000.” Enough said.
Now, to a large extent the poor quality of Mr. McCain’s advisers reflects the tattered intellectual state of his party. Has there ever been a more pathetic economic proposal than the suggestion of House Republicans that we try to solve the financial crisis by eliminating capital gains taxes? (Troubled financial institutions, by definition, don’t have capital gains to tax.)
But even President Bush has, in the twilight of his administration, turned to relatively sensible people to make economic decisions: I’m not a fan of Mr. Paulson, but he’s a vast improvement over his predecessor. At this point, one has the suspicion that a McCain administration would have us longing for Bush-era competence.
The real revelation of the last few weeks, however, has been just how erratic Mr. McCain’s views on economics are. At any given moment, he seems to have very strong opinions — but a few days later, he goes off in a completely different direction.
Thus on Sept. 15 he declared — for at least the 18th time this year — that “the fundamentals of our economy are strong.” This was the day after Lehman failed and Merrill Lynch was taken over, and the financial crisis entered a new, even more dangerous stage.
But three days later he declared that America’s financial markets have become a “casino,” and said that he’d fire the head of the Securities and Exchange Commission — which, by the way, isn’t in the president’s power.
And then he found a new set of villains — Fannie Mae and Freddie Mac, the government-sponsored lenders. (Despite some real scandals at Fannie and Freddie, they played little role in causing the crisis: most of the really bad lending came from private loan originators.) And he moralistically accused other politicians, including Mr. Obama, of being under Fannie’s and Freddie’s financial influence; it turns out that a firm owned by his own campaign manager was being paid by Freddie until just last month.
Then Mr. Paulson released his plan, and Mr. McCain weighed vehemently into the debate. But he admitted, several days after the Paulson plan was released, that he hadn’t actually read the plan, which was only three pages long.
O.K., I think you get the picture.
The modern economy, it turns out, is a dangerous place — and it’s not the kind of danger you can deal with by talking tough and denouncing evildoers. Does Mr. McCain have the judgment and temperament to deal with that part of the job he seeks?
Labels
- Civil Society (478)
- Liar's Poker by Michael Lewis (342)
- Hot Air (327)
- Heating Degree Days (160)
- Good Writing (153)
- natural gas (148)
- Deregulation of Electricity (139)
- Cramer Yesterday (134)
- Paul Krugman (128)
- Masters of the Universe (102)
- baselinescenerio.com (101)
- Countrywide (95)
- madoff (88)
- tech tips (76)
- aggregation (72)
- health care (63)
- trading again (63)
- Saakashvilli (59)
- Duke Energy (58)
- Trading Natural Gas and Other Futures and Derivatives (58)
- bailout (55)
- friedman (53)
- David Brooks (52)
- e-bills (52)
- Not Hot Air (51)
- simon johnson (50)
- Home Buyer (45)
- goldman sachs. (45)
- Leverage (43)
- Bear Stearns (39)
- Gretchen Morgenson (36)
- aig (36)
- herbert (35)
- real estate (33)
- GE (29)
- derivatives (29)
- Cramer Today (28)
- confessions of a pattern day-trader (28)
- gs (28)
- 885 Greenville (27)
- etf's (27)
- brooks (26)
- CNBC Today (25)
- Crash of 1987 (24)
- Rush Limbaugh (24)
- rich (23)
- How to Read This Blog (22)
- saackashvili (22)
- crash now (21)
- Clarence Thomas (20)
- kristoff (20)
- Nocera (19)
- William F. Buckley Jr. (18)
- cohen (17)
- credit default swaps (17)
- dowd (17)
- lehman (17)
- The Big Short by Michael Lewis (16)
- citicorp (16)
- hedge funds (16)
- obama (16)
- Charlie Rose (15)
- collins (15)
- cramer last night (15)
- globe_mail (15)
- banks (14)
- dreier (14)
- flynn's oil (14)
- georgia (14)
- kristol (14)
- Banc of America (13)
- Cramer and October 8 (13)
- Gold (13)
- Jimmy Rogers (13)
- The Current Stock Market and Reporting Therein (13)
- Warren Buffett (13)
- geithner (13)
- Bill Gross (12)
- Norris (12)
- Value of Diversification (12)
- c (12)
- fifth third (12)
- stimulus plan (12)
- American Energy (11)
- Auchincloss (11)
- bill moyers (11)
- david f swensen (11)
- humor (11)
- margaret wente (11)
- nakedshorts (11)
- pattern day trader (11)
- Ah Enron (10)
- alternative investments (10)
- yale (10)
- Energy Savings for Residential Home (9)
- Paulson (9)
- aig.credit default swaps (9)
- bond funds (9)
- investment advisors (9)
- realtors(R) (9)
- toxic (9)
- Misleading CNBC Ads (8)
- Why I Was Too Busy (8)
- canada (8)
- carlos celdran (8)
- consuelo mack (8)
- dead_of_winter (8)
- fifth_third (8)
- jp morgan (8)
- larry summers (8)
- morgan stanley (8)
- rubin (8)
- wolfe (8)
- Amaranth (7)
- Barefoot Advertising (7)
- Cooling Degree Days (7)
- Glengarry (7)
- Judge Cudahy (7)
- No Hot Air smart grid (7)
- Weakening Dollar (7)
- james kwak (7)
- pogue (7)
- reflects (7)
- symmes township (7)
- what we learn when special people die (7)
- Municipality Bankruptcies (6)
- Notary Signing Agents (6)
- Private Equity (6)
- andrew ross serkin (6)
- bogle of vanguard (6)
- civil rights (6)
- fannie and freddie (6)
- gm (6)
- health (6)
- italy (6)
- keynes (6)
- mortgage brokers (6)
- stan chesley (6)
- susan boyle (6)
- volker (6)
- ; CNBC Today (5)
- Actual Laurel and Greenville (5)
- Cost Per Megawatt (5)
- Deregulation (5)
- Judith Warner (5)
- Merrill Lynch (5)
- Phil Gramm (5)
- The Dollar (5)
- auction rate securities (5)
- bonds (5)
- cramer's crash checklist 2010 (5)
- credit cards (5)
- dan gearino (5)
- dominion (5)
- dulley (5)
- high frequency trading (5)
- iou (5)
- iran (5)
- john lanchester (5)
- joseph cassano (5)
- kesselschlacht (5)
- libor (5)
- mybesttime (5)
- natural gas is not like oil (5)
- palin (5)
- philippines (5)
- sec (5)
- stanford (5)
- ted kennedy (5)
- Gail Collins (4)
- Hunter S. Thompson (4)
- Si burick (4)
- US Dollar (4)
- art cashin (4)
- blow (4)
- buffett (4)
- don marshall (4)
- dwell (4)
- economics (4)
- finances (4)
- fraud (4)
- green township (4)
- grisham (4)
- harry markopolos (4)
- heating oil (4)
- hillary (4)
- investment banks (4)
- john c bogle (4)
- pajama traders (4)
- rider fpp (4)
- soros. friedman (4)
- sotomayor (4)
- subprime meltdown (4)
- supreme court (4)
- tarp (4)
- where we live out lives (4)
- 1998 (3)
- 970 laurel (3)
- Fiscal Stimulous (3)
- Paul Newman (3)
- Reich (3)
- The Associate (3)
- Thomas Frank (3)
- What a Ride Ye Gave Thee Shareholders (3)
- ackman (3)
- bp (3)
- burry (3)
- calvin trillin (3)
- carlos slim. masters of the universe (3)
- cdo (3)
- cds's (3)
- checklist (3)
- christopher buckley (3)
- collapse (3)
- commodities (3)
- david muth (3)
- doug worple (3)
- duhigg (3)
- duke energy retail sales llc (3)
- elizabeth warren (3)
- euro (3)
- flash crash (3)
- g-20 (3)
- glendale (3)
- goolsbee (3)
- gs; Liar's Poker by Michael Lewis (3)
- gs; goldman sachs. (3)
- hank greenberg (3)
- institutional investor (3)
- insurance companies (3)
- law firms (3)
- manila (3)
- mcnees (3)
- meredith whitney (3)
- middle east (3)
- movies (3)
- new yorker (3)
- option arms (3)
- paul daugherty (3)
- procter (3)
- reagan (3)
- ritchard posner (3)
- steve martin (3)
- stimulous plan (3)
- terrorism (3)
- toqueville (3)
- trust (3)
- wendell potter (3)
- words (3)
- Bernie schaeffer (2)
- Buddy (2)
- Editor's Selection (2)
- Frank DeFord (2)
- Gasparino (2)
- George Vecsey (2)
- Geothermal (2)
- God (2)
- Greenspan (2)
- Latest Carry Trade (2)
- Railroads (2)
- Remnick (2)
- Rich.reflects (2)
- Spitzer (2)
- The Very Crux (2)
- Wachovia (2)
- Weather Futures (2)
- a heddgie (2)
- abacus (2)
- aep (2)
- andreww ross serkin (2)
- arthur nadel (2)
- auto task force (2)
- barcelona (2)
- barrons (2)
- barton (2)
- bernanke (2)
- beth smith (2)
- biden (2)
- bill black (2)
- black swan (2)
- blood pressure (2)
- bridge (2)
- brooks-Simon (2)
- bruce abel (2)
- bubbles (2)
- cheever (2)
- chris dodd (2)
- christopher walken (2)
- community reinvestment act (2)
- corporate bonds (2)
- cramer's list (2)
- crash of 1929 (2)
- crash of 2:45 p.m. (2)
- cursing mommy (2)
- daugherty (2)
- donttrythisonyourhome.blogspot.com (2)
- duk (2)
- economix (2)
- entrepreneur (2)
- eu (2)
- fasb (2)
- fast money last night (2)
- financial advisors (2)
- financial crisis inquiry commission (2)
- fool's gold (2)
- glanville (2)
- glass-steagall (2)
- guessing cramer (2)
- hal mcCoy (2)
- house of cards (2)
- hugh laury (2)
- ian frazier (2)
- imf (2)
- immelt (2)
- indymac (2)
- iolta (2)
- jamie dimon (2)
- jimmy cayne (2)
- john mack (2)
- kellerman (2)
- lobbying (2)
- loonie (2)
- magnetar (2)
- marcellus shale (2)
- marselus shale (2)
- mcCain (2)
- medicare (2)
- merton.mit (2)
- milton friedman (2)
- neil bortz (2)
- notes from natural gas country (2)
- nuclear power generation (2)
- patrick french (2)
- paumgarten (2)
- pelosi (2)
- peter bernstein (2)
- phil in the mountains of kyushu (2)
- phillip schuck (2)
- philosophy (2)
- pnc (2)
- power grid (2)
- ratigan (2)
- rebecca Worple pictures (2)
- regions financial (2)
- regulation (2)
- rick santelli (2)
- robert shiller (2)
- rolling stone (2)
- schumer (2)
- schwab (2)
- securitization (2)
- seeking alpha (2)
- shadow banking system (2)
- sir allen stanford (2)
- south ossetia (2)
- stanley fish (2)
- stated income loans (2)
- steen (2)
- stress tests (2)
- structured finance (2)
- taleb (2)
- talf (2)
- too big to fail (2)
- treasury (2)
- troubled asset recovery plan (2)
- trusts (2)
- twitter (2)
- veverka (2)
- walter noel (2)
- water (2)
- weatherization (2)
- wells fargo (2)
- whitney tilson (2)
- william cohan (2)
- world affairs (2)
- 1040 (1)
- 12 angry men (1)
- 60 minutes (1)
- Daschle (1)
- December (1)
- Detroit (1)
- Dirty tricks (1)
- Dmitry Orlov (1)
- Econned (1)
- Electricity (1)
- EnCana (1)
- February (1)
- Gold Standard (1)
- Irremedial (1)
- January (1)
- Jr. (1)
- Judith Timson (1)
- Kevin Hassett (1)
- McFadden Act (1)
- National City (1)
- Negrych (1)
- No There There (1)
- November (1)
- Peter Baker (1)
- Rob portman (1)
- September (1)
- Surowiecki (1)
- T. Boone Pickens (1)
- TWITTER DAY capers (1)
- Teddy Roosevelt (1)
- The Flash Guys (1)
- VaR (1)
- WEP (1)
- WPA (1)
- ` (1)
- aa (1)
- aaron pressman (1)
- above the law (1)
- acorn (1)
- adwords (1)
- afghanistan (1)
- africa trip (1)
- aging (1)
- ai (1)
- ajay kapur (1)
- ajit jain (1)
- aligned interest partnerships (1)
- allegheny (1)
- ambient (1)
- american electric power (1)
- anandarko (1)
- andrew j hall (1)
- andrew lo (1)
- andy redleaf (1)
- anne hathaway (1)
- annuities (1)
- apc (1)
- attorney review (1)
- ayp (1)
- ayres (1)
- bachus (1)
- barofsky (1)
- baseball (1)
- basis_of_stocks (1)
- ben stein (1)
- best line of the day (1)
- bill ayres (1)
- bill gates (1)
- bill o'reilly (1)
- bill youngclaus (1)
- blackstone group (1)
- blankfein (1)
- blodget (1)
- blodgett (1)
- bob woodward (1)
- books and entertainment (1)
- brown-kaufman (1)
- bruce harlamert (1)
- bully points (1)
- buy and hold (1)
- california (1)
- canadian banks (1)
- canadian dollar (1)
- carlyle group (1)
- carol loomis (1)
- casa batllo picture (1)
- cds.money market (1)
- charles ortel (1)
- charles taylor (1)
- chesapeake energy (1)
- chicago (1)
- china (1)
- christopher hitchens (1)
- city-data (1)
- cleaving in two (1)
- closing costs (1)
- cloud computing (1)
- cng (1)
- cobra (1)
- colin powell (1)
- collar funds (1)
- colors (1)
- columbia gas (1)
- commercial property (1)
- communitarian (1)
- conan obrien (1)
- concrete (1)
- conocophilips (1)
- consumer financial product agency (1)
- contracts (1)
- cooking (1)
- corporate law (1)
- cottage ownership (1)
- cox (1)
- creditaig.credit default swaps (1)
- daily normals (1)
- dan kucera (1)
- david corn (1)
- david einhorn (1)
- david faber (1)
- david frum (1)
- david gray (1)
- david gu (1)
- david kessler (1)
- dayton daily news (1)
- default option (1)
- deficit (1)
- discount rate mismatch (1)
- divorce (1)
- dmitri young (1)
- douthat (1)
- dov seidman (1)
- due diligence (1)
- dzhugashvili (1)
- earmarks (1)
- earthquake (1)
- edmund andrews (1)
- education (1)
- effrat (1)
- el-erian (1)
- ellen brown (1)
- emma (1)
- equities (1)
- eric holder (1)
- estate planning (1)
- estate taxes (1)
- ethics (1)
- european union (1)
- everything relates to everything (1)
- ewe reinhardt (1)
- exceptionalism (1)
- extend and pretend (1)
- ezra merkin (1)
- f (1)
- facebook fiasco (1)
- fairenergyohio.org (1)
- fault swaps (1)
- feith (1)
- financial engineering (1)
- finland (1)
- first energy (1)
- fitzgerald (1)
- fixed income (1)
- fonts (1)
- food (1)
- foreclosures (1)
- fracking (1)
- fuchs (1)
- futures chain (1)
- game face (1)
- gary kaminski (1)
- gasoline (1)
- gawande (1)
- gazprom (1)
- gerry spence (1)
- glen beck (1)
- good writing; what we learn when special people die (1)
- greek debt (1)
- gregg (1)
- gs; (1)
- gwyn morgan (1)
- hdd (1)
- heroes (1)
- hilda solis (1)
- home buyer tax credit (1)
- homes (1)
- igs (1)
- index funds (1)
- india (1)
- inflation (1)
- infrastructure (1)
- interest rate swaps (1)
- investment neighborhood concept (1)
- iphone+facebook (1)
- ireland (1)
- irs (1)
- james simons (1)
- john burns (1)
- john cassidy (1)
- john_paulson (1)
- jon stewart (1)
- jose manuel tesoro (1)
- julian epstein (1)
- kagan (1)
- karl icahn (1)
- kate middleton (1)
- kate winslet (1)
- ken lewis (1)
- kevin drum (1)
- lafley (1)
- lawyering (1)
- leonie benesch (1)
- liddy (1)
- limiting wall street salaries (1)
- linda greenhouse (1)
- liquidity (1)
- listen up (1)
- lists (1)
- livingwiththeoldies (1)
- lynn a stout (1)
- macArthur (1)
- madmoneyrecap.com (1)
- maira kalman (1)
- malcolm gladwell (1)
- managed futures (1)
- manhattan institute (1)
- mark everson (1)
- mark-to-market rule (1)
- martin act (1)
- mcallen texas (1)
- mcconnell (1)
- meachem (1)
- medicaid (1)
- memory lane (1)
- mergers and acquisitions (1)
- mf global;corzine; Masters of the Universe (1)
- michael jackson (1)
- mike demmer (1)
- mike mayo (1)
- mit (1)
- mit technology review (1)
- mold (1)
- mommy (1)
- money market funds (1)
- moral hazard (1)
- mother jones (1)
- mozilo (1)
- msnbc (1)
- muppets (1)
- mutual funds (1)
- myth of the great war (1)
- nagornay (1)
- naipaul (1)
- nassim taleb (1)
- nationalization (1)
- ncaa (1)
- new construction (1)
- nicholas dawidoff (1)
- nick grealy (1)
- nopec (1)
- not misleading cnbc ads (1)
- not sure (1)
- november 2010 elections (1)
- nymex (1)
- oil sands (1)
- oil spill in gulf (1)
- options (1)
- orange county (1)
- orman (1)
- p&g (1)
- packer (1)
- pakistan (1)
- passive houses (1)
- patrick-taylor plan (1)
- pension funds (1)
- peter weinberg (1)
- phillip blond (1)
- phisosophy (1)
- pico iyer (1)
- pictures (1)
- planes (1)
- plutomomics (1)
- powers of attorney (1)
- prechter (1)
- primal image (1)
- primary care doctors (1)
- procedure (1)
- progress energy (1)
- quants (1)
- queen elizabeth (1)
- quiet zones (1)
- rahm (1)
- randazzo (1)
- random sayings (1)
- randum notes; Hot Air (1)
- ratings (1)
- regulatory capture (1)
- renminbi (1)
- rent scams (1)
- repo 105 (1)
- residential counteroffer (1)
- restoring wireless (1)
- retail (1)
- reunion (1)
- rice v igs (1)
- roger altman (1)
- ron insana (1)
- ross serkin (1)
- roubina (1)
- rtichard posner (1)
- russian winter (1)
- s and p (1)
- sallie mae (1)
- sarah brightman (1)
- saskia de brauw (1)
- saturday night live (1)
- satyajit das (1)
- schadenfreude (1)
- science (1)
- sean miller (1)
- segal (1)
- silver (1)
- single payer system (1)
- singleism (1)
- sistine chapel (1)
- small business (1)
- smart metering (1)
- soros (1)
- speculation (1)
- springfield township (1)
- stalin (1)
- steele (1)
- steidlmayer (1)
- stenfors (1)
- steven g breyer (1)
- steven schwartzman (1)
- stewart (1)
- stiglitz (1)
- strauss-kahn (1)
- strictly local (1)
- susan jacoby (1)
- tabula rasa (1)
- tanenhaus (1)
- tanta (1)
- target date funds (1)
- taxes (1)
- ted forstmann (1)
- ten things (1)
- tett (1)
- thamel (1)
- the haggler (1)
- the reader (1)
- thomas jefferson (1)
- thomas lee (1)
- thomas montague (1)
- thomas ricks (1)
- timeline. laffley (1)
- timothy egan (1)
- tivo (1)
- tod_x;Duke Energy (1)
- todx (1)
- tom archdeacon (1)
- tom daschle (1)
- tom wilson.allstate (1)
- trains and automobiles (1)
- travel insurance (1)
- ultra (1)
- ung (1)
- united states steel (1)
- vanity fair (1)
- vatican (1)
- verizon (1)
- victoria falls (1)
- victorian homes (1)
- w (1)
- wall street (1)
- washinton mutual (1)
- whitebox (1)
- wilpon (1)
- wtrg (1)
- wwII. flash crash (1)
- www.rule26a1.com (1)
- x (1)
- year_end (1)
- zambia (1)
- zardari (1)