This is a moment of great unique uncertainty in our financial markets. The crisis that began in the subprime mortgage market has spilled over and now poses a broader threat. I am following the developments in our markets closely. This morning I spoke with Secretary Paulson and New York Federal Reserve President Tim Geithner. They both outlined the actions that were taken yesterday to ensure liquidity and restore confidence in the market. I relayed to them my thoughts and concerns. I will continue to monitor the situation closely throughout the day and will seek advice and counsel from a broad range of economic advisors.
As a senator from New York, I am keenly focused on the impact of these market developments on the lives and livelihoods of thousands of New Yorkers and on the New York economy as a whole. I am also reminded everyday as I meet with families and listen to their stories that the effective function of our market isn’t just about Wall Street, it is about Main Street. It’s about the families I meet that are struggling to fend off foreclosures and stay in their homes. It’s about construction workers who used to build houses and are now out of work. It’s about the college student who has good credit but is struggling to get a loan. What is happening on Wall Street may well affect the lives and fortunes of tens of millions of Americans who work hard everyday. They’ve done nothing wrong, but they will be impacted.
In these times of stress and uncertainty, we need to be vigilant, to do everything in our power to maintain confidence in our financial system. I feel very strongly that in every way we’ve got to have more urgency to continue the action that was started yesterday. In my conversations earlier this morning, I raised my concern about the continuing numbers of foreclosures and my very strong belief that in the absence of addressing that aspect of this subprime mortgage credit crisis, we will not be able to make the progress that we have to make. I will follow this closely and as I said, I am particularly concerned about the many employees of Bear Stearns and their families and the ripple through the economy that this is going to cause.
Statement from Hillary Clinton
This is the difference between someone running to defeat Hillary and someone running to be President. The focus of the two campaigns is dramatic. Obama is all about The Precious and just how precious he is. Hillary is all about the growing insecurity of the lives of ordinary people and just how destructive that is to wide sectors of the society. Many links and videos in this post "Hillary Clinton on Financial Market Crisis" by Susan UnPC on No Quarter.
The news of financial market melt down in the last few days should be shaking the nation to its foundations. We should not have to deal with sophistry over the odious words of a power-hungry preacher (Is Wright a racist asshat? You betcha! Is Obama lying through his teeth about not knowin' nuthin' 'bout a trash talkin' preacher? Oh, my, yes! Is this an insult to the nation that bloggers like Josh Marshall are actually trying to defend that crap? No doubt about it!) when we are looking at the worst economic crisis to face the nation since the Great Depression.
Let's all return to fundamentals and read Krugman:
And who are these potential presidents? We have a Republican candidate who freely admits he knows squat about the economy and who has been involved in a financial scam (remember the Keating 5?). We have an Obamacan who is up to his ears in deals with a financial flim-flam artist and who doesn't do much on the trail but bleat about his opponent's alleged racism and wave his hands in the direction of "cleaning up Washington". And we have a Democrat who understands national and international finance inside and out, who has been a close observer of national economic conditions and policies, and who can speak extemporaneously and with confidence about the complex interconnections of trade, local and regional economies, intenational financial markets and the difference between liquidity and solvency.
Four years ago, an academic economist named Ben Bernanke co-authored a technical paper that could have been titled “Things the Federal Reserve Might Try if It’s Desperate” — although that may not have been obvious from its actual title, “Monetary Policy Alternatives at the Zero Bound: An Empirical Investigation.”
Today, the Fed is indeed desperate, and Mr. Bernanke, as its chairman, is putting some of the paper’s suggestions into effect. Unfortunately, however, the Bernanke Fed’s actions — even though they’re unprecedented in their scope — probably won’t be enough to halt the economy’s downward spiral.
And if I’m right about that, there’s another implication: the ugly economics of the financial crisis will soon create some ugly politics, too.
These days, it’s rare to get through a week without hearing about another financial disaster. Some of this is unavoidable: there’s nothing Mr. Bernanke can or should do to prevent people who bet on ever-rising house prices from losing money. But the Fed is trying to contain the damage from the collapse of the housing bubble, keeping it from causing a deep recession or wrecking financial markets that had nothing to do with housing.
What if this initiative fails? I’m sure that Mr. Bernanke and his colleagues are frantically considering other actions that they can take, but there’s only so much the Fed — whose resources are limited, and whose mandate doesn’t extend to rescuing the whole financial system — can do when faced with what looks increasingly like one of history’s great financial crises.
The next steps will be up to the politicians.
I used to think that the major issues facing the next president would be how to get out of Iraq and what to do about health care. At this point, however, I suspect that the biggest problem for the next administration will be figuring out which parts of the financial system to bail out, how to pay the cleanup bills and how to explain what it’s doing to an angry public.
Gee, I wonder why Krugman is worried about presidents and how the economic crises will be handled?