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Paulson and Palin, McCain's gaffe, Bernanke's Silence

By Matt Cooper

How did the major candidates--and Hank Paulson--do so far today?

John McCain began the day with his first big stumble in awhile, saying he thought the economy was fundamentally "strong' but had problems. I'm not sure I buy that on the merits, and know it's a loser politically. Barack Obama pounded on McCain on the economy. And Sarah Palin, speaking in Colorado, repeated her lie about opposing the "bridge to nowhere." She echoed McCain's remarks about needing a new regulatory system in Washington.

But McCain was incredibly late to the party on the housing crisis, coming up with a weak plan after the Bush administration and his top economic advisor, Phil Gramm, helped put us in this mess by weakening the regulatory authority of the S.E.C. It's hard to come out of a day like today with renewed faith in McCain's ability to handle a mess like this.

On the other hand, but for the grace of Angelo Mozillo, Jim Johnson would still be at Barack Obama's side--a constant reminder of the Fannie Mae mess. The person we should have heard from today was Ben Bernanke with a simple Greenspan '87-like statement saying that the liquidity would be there. Instead we get silence and probably rates holding steady. Hank Paulson did fine with his reassuring words and explanation that he never would use taxpayer money to bail out Lehman.

Overall, you have to say this crisis is best for Obama politically. It puts the focus back on the economy and off of lipstick, pitbulls, and moose shooting.

Matt Cooper

For more on the crisis on Wall Street, read these:

-- September Surprise for the Candidates.
-- Shock to the System.
-- Investment Bank, R.I.P.
-- Paulson Pulls It Out.
-- Day of Reckoning on the Street.
-- Market Movers: Wall Street Huddles for Safety.
-- Helicopter Ben Strikes Again.

Related Links
Obama Still Tops Online, But McCain Gaining
September Surprise
Which Candidate Do Oil Companies Like Most?

Full post as published by Portfolio.com: Capital on September 15, 2008 (boomark / email).