McCain offered up the oldest trick in the book -- pass it off to a commission to study, Obama said.
McCain did indeed say that, which proves he has no idea as to how the financial meltdown happened. It doesn't need studied. Isn't a study just more bureaucracy? How is that reform? Here's the meltdown in a sentence: Too many subprime mortgages for too many people who couldn't afford them compounded by a lack of oversight. End of story. Hire me!
McCain doesn't get it. Palin doesn't get it. We don't need some shakin' and fixin' -- what Palin offered yesterday. We don't need some average hockey mom with a down home way of talking. We need intelligence. We need brilliance. We need above average.
I'm sorry for all those people who equate intelligence with elitism. They're just wrong. That's what's been wrong with our leadership -- Bush lacks the wisdom, the intelligence and so he makes up for his incompetence with brashness and gut decisions. David Brooks said it best while writing about Palin.
We need leadership to get us out of this mess, not a commission, Obama said.
Obama's right. He's entirely right. He's so right that I can't believe that people can even consider McCain.
Here's the text of the speech. I'll add video when it's up.
Remarks of Senator Barack Obama
Confronting an Economic Crisis
As Prepared For Delivery
Tuesday, September 16th, 2008
Golden, Colorado
Over the last few days, we have seen clearly what’s at stake in this election. The news from Wall Street has shaken the American people’s faith in our economy. The situation with Lehman Brothers and other financial institutions is the latest in a wave of crises that have generated tremendous uncertainty about the future of our financial markets. This is a major threat to our economy and its ability to create good-paying jobs and help working Americans pay their bills, save for their future, and make their mortgage payments.
Since this turmoil began over a year ago, the housing market has collapsed. Fannie Mae and Freddie Mac had to be effectively taken over by the government. Three of America’s five largest investment banks failed or have been sold off in distress. Yesterday, Wall Street suffered its worst losses since just after 9/11. We are in the most serious financial crisis in generations. Yet Senator McCain stood up yesterday and said that the fundamentals of the economy are strong
A few hours later, his campaign sent him back out to clean up his remarks, and he tried to explain himself again this morning by saying that what he meant was that American workers are strong. But we know that Senator McCain meant what he said the first time, because he has said it over and over again throughout this campaign – no fewer than 16 times, according to one independent count.
.... snip - read the whole speech.
First, if you’re a financial institution that can borrow from the government, you should be subject to government oversight and supervision. When the Federal Reserve steps in as a lender of last resort, it is providing an insurance policy underwritten by the American taxpayer. In return, taxpayers have every right to expect that financial institutions with access to that credit are not taking excessive risks.
Second, we must reform requirements on all regulated financial institutions. We must strengthen capital requirements, particularly for complex financial instruments like some of the mortgage securities and other derivatives at the center of our current crisis. We must develop and rigorously manage liquidity risk. We must investigate rating agencies and potential conflicts of interest with the people they are rating. And we must establish transparency requirements that demand full disclosure by financial institutions to shareholders and counterparties. As we reform our regulatory system at home, we must address the same problems abroad so that financial institutions around the world are subject to similar rules of the road.
Third, we need to streamline our regulatory agencies. Our overlapping and competing regulatory agencies cannot oversee the large and complex institutions that dominate the financial landscape. Different institutions compete in multiple markets - Washington should not pretend otherwise. A streamlined system will provide better oversight and reduce costs.
Fourth, we need to regulate institutions for what they do, not what they are. Over the last few years, commercial banks and thrift institutions were subject to guidelines on subprime mortgages that did not apply to mortgage brokers and companies. This regulatory framework failed to protect homeowners, and made no sense for our financial system. When it comes to protecting the American people, it should make no difference what kind of institution they are dealing with.
Fifth, we must crack down on trading activity that crosses the line to market manipulation. The last six months have shown that this remains a serious problem in many markets and becomes especially problematic during moments of great financial turmoil. We cannot embrace the administration's vision of turning over the protection of investors to the industries themselves. We need regulators that actually enforce the rules instead of overlooking them. The SEC should investigate and punish market manipulation, and report its conclusions to Congress.
Sixth, we must establish a process that identifies systemic risks to the financial system like the crisis that has overtaken our economy. Too often, we end up where we are today: dealing with threats to the financial system that weren't anticipated by regulators. We need a standing financial market advisory group to meet regularly and provide advice to the President, Congress, and regulators on the state of our financial markets and the risks they face. It’s time to anticipate risks before they erupt into a full-blown crisis.
These six principles should guide the legal reforms needed to establish a 21st century regulatory system. But the change we need goes beyond laws and regulation. Financial institutions must do a better job at managing risks. There is something wrong when boards of directors or senior managers don't understand the implications of the risks assumed by their own institutions. It's time to realign incentives and CEO compensation packages, so that both high level executives and employees better serve the interests of shareholders. Read the rest
