The financial crisis and the election...

None of us who favor the election of Barack Obama should take satisfaction in the carnage on Wall Street, however much it creates the possibility of an Obama landslide. The 401(k)'s and pensions of everyone are suffering, and the credit freeze is leading to lay-offs of workers, today. The now-failed "bail-out" package was a technical mechanism to extract bad debt from threatened financial institutions, as well as an emergency psychological measure to reassure world credit markets that the U.S. government would act to stop the domestic panic and prevent a major global economic implosion. Without some sort of legislation out of Congress in the next week of equivalent size, more American financial institutions (including small local banks) will fail, the Fed will have no choice but to print more money, and inflation and unemployment will rise simultaneously. How many more points on the unemployment and bank failure numbers are Obama enthusiasts willing to accept, for a few more electoral votes for him on November 4? The reality is that if there is no decisive government action to halt the credit crisis before the election, President Obama will inherit a much more seriously weakened economy and be digging out from a deeper hole for far longer into his new administration. What happens this fall can affect his ability to govern progressively. Let's hope that some sort of systematic U.S. government action proportionate to the world credit crisis is taken soon, because we all want this new president to be able to act on the plans and priorities he's talking about. You do not want his entire first term to be digging out from under more debris left by the fecklessness of Bush and the obduracy of congressional Republicans.