I picked up the phone to hear my pregnant sister nervously explaining the plummet of America’s Wall Street. We joked about moving to Canada or England if the issue wasn’t fixed or if Barack Obama wasn’t elected president. She told me that she and her husband were thinking about taking their stocks out of the stock market and into something that they could actually rely on. As she spoke, I realized that Economy had a greater problem then I previously thought and that if something wasn’t done soon, we could be facing something close to the depression of the 1920s.
Monday’s shocking news of global investment bank, Lehman Brothers declaration of bankruptcy, sent the stock market down and other financial hot shots squirming. After the announcements, banks began to feel the heat. A Yahoo! article explains that, “In the fallout, Bank of America took over Merrill Lynch in a 50 billion dollar deal, insurance giant AIG was reported to have sought a massive emergency loan to head off its own crisis and a group of banks set up a 70 billion dollars global emergency fund.” Banks are trying to team up and face the crisis together, Bank of America, Barclays, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs (large contributor to both political parties), JPMorgan Chase, Merrill Lynch, Morgan Stanley, and UBS say that they will work together “to help facilitate and orderly resolution of the derivatives exposures between Lehman Brothers and its counterparties” (Yahoo!). The team of banks also released a statement explaining that they have plans in set to face the challenges “affecting global equity and debt markets.” This bombshell is not only affecting American businesses. European and Asian stocks are beginning to plummet as well, reporting a three to five percent drop, as well as a decline in the dollar.
In the midst of the most historical run for presidency in America’s history, I wonder to my self what our next president will really do to restore the condition that Wall Street is in. It is the worst succession that Wall Street has been in since 2001, and it doesn’t look like it will get better any time soon. Both democrats and republicans talk tough about restoring the condition that America’s economy is in, but who knows if either of them can repair the “hangover” that Wall Street is coping. Barack Obama woke up Monday morning addressing the issue and saying that, “This turmoil is a major threat to out 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.” He is right, like my sister, many Americans are fearful of their economy and are becoming more cautious about where they invest, Obama says that he doesn’t point the finger of blame towards John McCain, but instead to the values that McCain believes in. Turning this issue into an opportunity to preach his basis of change, Obama says that “… I’ve called for policies that grow our economy and out middle-class together, That is the change I am calling for in this campaign, and that is the change I will bring as president.”
Hopefully Barack will bring about the change that the economy desperately needs, but one man that doesn’t agree with his tactics on change is rival presidential hopeful, John McCain, who a few hours after Obama addressed the issue facing America and Wall Street. He said that, “It is essential for us to make sure that the U.S. remains the pre-eminent financial market of the World,” and that, “The McCain-Palin Administration will replace the outdated and ineffective patchwork quilt of regulatory oversight in Washington and bring transparency and accountability to Wall Street.”
Although I don’t understand how the McCain-Palin ticket will “replace the outdated and ineffective patchwork quilt” of those before them when they run on the same basis as our current president who sees Wall Street as drunk, I am also weary of Barack Obama’s stance on changing it. I’m not sure if either presidential candidate can either fix it or change it, but I try to remain hopeful.