Today, Lehman Brothers Investmant Bank declared bankruptcy, brought down by the subprime mortgage crisis that it helped to create. To give you an idea of how bad this is, consider:
- The firm was 158 years old. It survived the Great Depression in the 1930s and countless other financial upheavals, but it could not survive its own greed.
- Their bankruptcy filing lists $613 BILLION (yes, more than half a Trillion dollars) in debt, making it the largest bankruptcy in all of history. That’s more than $2,000 for every man, woman, and child in the USA.
- The former editor of the American Bankruptcy Institute Journal says that there is likely to be a domino effect on other institutions and individuals. “The whole thing is frankly frightening for the U.S. economy.”
Campaigning this week, McCain declared:
We will never put America in this position again. We will clean up Wall Street. This is a failure.
McCain also called for “transparency and accountability” on Wall Street.
For starters, that “transparency” could include admitting that McCain’s own chief financial advisor, former Senator Phil Gramm, was the person who was personally “accountable” for sneaking in the last-minute amendment that deregulated the part of the financial industry that directly led to the mortgage meltdown. Not to mention his involvement in deregulating energy markets, which led to the Enron mess. Yes, that is the same Gramm who called America a “nation of whiners”.
Not only that, but after the “whiners” comment, McCain supposedly removed Gramm from his campaign, but by most accounts, Gramm is still working for McCain. Is that “transparent and accountable”?
In addition, McCain is now suddenly blasting “golden parachutes” for CEOs, but doesn’t bother to mention that one if his top advisors, Carly Fiorina, received such a parachute worth $42 million after her short tenure at HP (which she mismanaged enough to get herself fired).
New Rule: if you claim that you are going to fix a problem, you have to actually say how you are going to fix it. McCain provides no details, just talk. And you can start with how you are going to fix that same problem inside your own campaign. How can you clean up the rats in Washington when your own home is infested? (Or should that be homes?)
Meanwhile, Obama introduced legislation over a year ago to try to prevent the subprime mortgage crisis, and has been working on this issue since his days in the Illinois Senate.
UPDATE: Obama gave an excellent speech on the economy today.
