Obama vs. McCain 2008: Round 18: Crisis Intervention

This is the eighteenth of a weekly series of public forums on TMB. Watch for a new round every Monday.

This topic is arguably more important than any other, as far as the next President is concerned. Especially considering the recent economic crisis on Wall Street. (Feel free to comment on what each candidate had to say about this at the recent debate.)

Which candidate will do the best at handling these kinds of crises?

We can certainly look to events of recent months to compare the way the candidates handled things: Wall Street, energy concerns, the Russia-Georgia conflict, and Hurricane Ike. (There are separate forums for discussing Iraq; the economy; oil, energy, and the environment; and terrorism and diplomacy.)

What do you think?

Next week: Illegal Immigration

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15 Responses

  1. I don’t understand the whole Obama-McCain dichotomy. Why not include Chuch Baldwin in the discussion? It’s not either or.

  2. Jeff,

    For individual voters, it is not either/or. But for the nation, it simply is. I wish it were easier for third-parties to thrive in our political system, but it simply is not. These forums cater to the overwhelming percentage of voters who will be backing either McCain or Obama. At any rate, if Baldwin were added, many others would need to be as well.

  3. I disagree. You see, there is no way for me to participate in this debate at all, because I can’t argue in favor of either candidate. You have excluded voters like me from the debate, and I don’t appreciate it. It is forums like this that prevent third party candidates from having more of a chance.

  4. C. S. Lewis:

    “I feel a strong desire to tell you–and I expect you feel a strong desire to tell me–which of these two errors is the worse. That is the devil getting at us. He always sends errors into the world in pairs–pairs of opposites. And he always encourages us to spend a lot of time thinking which is the worse. You see why, of course? He relies on your extra dislike of the one error to draw you gradually into the opposite one. But do not let us be fooled. We have to keep our eyes on the goal and go straight between both errors. We have no other concern than that with either of them.”

  5. Jeff,

    I sympathize with what you are saying — though I hardly think this blog is important enough to be worthy of preventing third party candidates from having more of a chance.

    If you feel strongly about this issue, I welcome you to write a post about this topic.

    I would say this, though, Jeff. I think it is great that there are people who advocate strongly for third-party candidates. I could imagine myself doing the same if there were a third-party candidate that I really resonated with. At the same time, I wouldn’t say that you “can’t argue in favor of either [major] candidate” on this blog. I’m sure, Jeff, that (if you were a gambling man and your primary goal was to pursue money) you would be very willing to bet almost all of your money on Obama or McCain winning (as opposed to a third ticket). Unless you feel otherwise about these odds, you have to come to terms with either Obama or McCain being elected the next president. Certainly there are differences between these two candidates that matter for the things you care most about. Whatever the virtue of supporting a third way, I would argue that every citizen ought to be well informed of the differences of the major party candidates (one of which will almost certainly win).

    Regarding the C.S. Lewis quote, I’m not fully satisfied how well it applies to me (as far as politics is concerned). On one hand, I am not deluded into thinking that a certain party or platform is anywhere close to perfect. I have strong disagreements with both sides and I dislike much (most?) of what goes on in partisan politics. But that doesn’t mean that my political decisions are between worse and worst. I will certainly agree, though, that it is very easy to be pulled into one pair of opposites. It is a great quote.

    The quote is certainly not limited to conservative vs. liberal. Every ideological position has an oppositional pole. We can contrast constitutionalism, for example, to anarchism. Or libertarianism to socialism.

    I’m still waiting for an economically moderate and socially moderate (moderate-conservative ideally) party. But even if this party comes, I shouldn’t kid myself that my moderation enables me to “go straight between both errors.” Rather, I would need to be wary that I don’t set up “moderation” as the better route only in comparison with “extremism.”

    The problem, as I see it, is nailing ourselves down to abstractions. Which is why I am hesitant to call myself a member of a certain party or ideology. Right now I am quite moderate in general, but that could change. Here in Utah County I definitely side with the Democrats, hands down. But in other places and circumstances I can see myself siding with another party. Right now I side more with Obama, but that could certainly change. I hardly need to lock myself in with the national Democrats, and I highly resist doing so.

    And participating in this forum hardly requires a person to argue in a polemical fashion.

  6. I understand what your saying. I just think it’s unfair to lock a candidate out of discussion or debate merely because he doesn’t have as much chance of winning as others. If you truly wished third-party candidates had a better chance, would you give them the time of day? Or at least include them as a part of the discussion? If everybody did that, they would have a better chance.

  7. Jeff, why don’t you post about why neither Obama or McCain are up to snuff, and why your third party candidate is? I’d be interested in reading your take, and I know for a fact Dennis would too.

  8. I think I will. Thanks for the suggestion!

  9. This topic is remarkably well timed. I am not personally satisfied with either choice as far as the response to the potential Wall Street bailout. I have read a little about the contents of the bill that just failed to pass the House.

    I favor the free market fixing its own problems, but it was not the free markets that got us into this mess. Government regulations forced banks to make the loans they are now being hammered by. I suppose a government response could be crafted that would help the problem, but the bill that failed today was full of pork for groups like ACORN. In an election year nobody in a close race will get away with voting for something like that.

    Neither McCain nor Obama showed much ability to rally the troops of their side if this solution was so necessary. 40% of House Democrats were opposed and about 1/3 of Republicans voted for the bill. In a way, it is impressive that that many Republicans voted for it, since economic conservatism would dictate opposition to free market interventions. Also, that so many Democrats opposed it strikes me as intriguing since they ideologically favor more market interventions.

    The bailout has been described as a crap sandwich, for what it’s worth.

  10. Jeff,

    It is not so much public dialog that prevents third-party candidates as it is electoral institutions.

    Arend Lijphart, famed political scientist, has written extensively about the consensus view of political scientists that majoritarian (first-past-the-post) systems systematically prevent third party candidates. There are a very few exceptions. More public exposure for these candidates would not overcome the real obstacle.

    I may be possible for a centrist candidate to gain ground if the two main candidates are on the fringes – but neither Obama nor McCain are perceived as such.

    Proportional Representation or MMP systems are able to handle multiple parties. I think it would be great if the US would convert to this, for several reasons, but it is not going to happen. Our constitution is one of the hardest in the world to modify.

    And, I know how you feel. I don’t support either candidate yet, but I still find Dennis’ posts to be great venues for me to express my views and learn from others.

  11. Ryan,

    What you’ve said about the electoral process is along the lines with suspicions I have had. I wonder how much progress could be made if all the third-party candidates (and sympathetic independents and moderates) got together to try to change the Constitution. It would probably raise a stir, but likely not enough to change anything.

    I’m curious what you have to say, Ryan, about the recent economic crisis.

  12. Normally I would appreciate a candidate with an eagerness to get involved like McCain did last week with the financial crisis. In most cases, I would say that it’s a positive thing that a candidate would put the good of the country above his own campaign, even going as far as to suspend it. However, it sort of came across as a political stunt and I question how “important” it really was for McCain to bring his campaign to a halt. I thought the same when the Republicans were talking about cancelling the GOP Convention because of the hurricane. What could McCain really “do” for the hurricane victims? I think the main reason why the convention was scaled back was because it looked bad on the Republicans because of Bush’s lack of response after Katrina.

    I think Obama made an excellent point when he declined to delay the debate, when he talked about how a president will have to multi-task. With only a few weeks until the election, the debates have to take place and now was as good a time as ever. Will McCain be able to juggle several balls when times get tough during his presidency? Just imagine if the US got hit by another 9/11-like terrorist attack now, while the country is already in turmoil over the credit crunch. McCain couldn’t concentrate on a debate when he’s just a candidate? How will it be when he’s president and has two or more big crises going on at the same time? Will Sarah Palin be enough of a help?

  13. Some very brief thoughts on the economic crisis:

    I don’t think it’s wise to blame one person/party/thing for this. It seems to be a combination of inefficient regulation or lack of regulation (specifically financial markets), political protection of GSEs and pressure to give loans to high-risk borrowers, excessive speculation in the housing market, typical greed and incredible overleveraging on Wall Street/financial sector. Of course causes are more specific and complex than this, but I think those general themes are agreeable by most experts.

    We can blame Bush/the Right for free-market ideology which failed to regulate efficiently. We can thank Bush for trying to reform Fannie and Freddie – Dem lawmakers (some GOP too, but mostly Dem in this case) who were on Fannie/Freddie payroll prevented the reforms. So partisan blame gets us nowhere, since both are responsible.

    The complex structure of risk and incentives has created quite a mess (obviously). Markets depend completely on confidence – confidence that debts will be repaid and executives will maximize shareholder value. Confidence has been undermined; the market has failed.

    Paulson and Bernanke are smart guys. They also have access to more information than anyone else. The Bear Stearns bailout was a mistake, but I believe all the actions since then have been good (including letting Lehman fail). People should not identify Paulson too closely with the Bush admin – he has major ideological differences with them. I hope the next pres keeps him on, for continuity’s sake. There is some indication Obama might; McCain probably won’t.

    I support a bailout. I do not believe that the Paulson/Congress bailout is the best option. Some sort of equity stake/preferred stock injection would be much, much better. But, I don’t think that’s politically feasible at this point, and I believe something must be done ASAP to boost confidence in markets. I think Paulson probably knew the equity idea would never get past the GOP, so he didn’t try it. At this point, doing anything will help, because it’s confidence that matters.

    The unfortunate side-effect of the bailout is moral hazard. At this point, I don’t think that matters. We have to free up credit. Many doubt the connection between Wall Street and the rest of us. This is it: most companies of any size use credit for day-to-day operations, including payroll. Credit has seized up; banks refuse to lend. If companies can’t get credit, people lose jobs. This in addition to the fact that basically no new investments are being made now, so job growth in the future is severely restricted.

    In the future: financial markets are not like goods markets. Most economists believe that they deserve more regulation. We should be careful not to confuse “lots of regulation” with “good regulation”. Regulation must be targeted to prevent crises, force risk takers to carry their own risk, and keep incentives intact.

    On the political front: McCain’s stunt last week to come to the rescue in Washington was unnecessary (and served as the nail in the coffin for his campaign). Obama was right to suggest staying out of it. Economics is a very complex subject. Most people, including lawmakers, don’t understand it well enough to make big decisions. I love democracy and all, but tough economic questions should be answered by experts, not politicians. I am disappointed that Congress has not devoted a day to hearings and invited top economists to testify – on TV. Instead, partisan interests and reelection politics have dominated the agenda.

  14. You’ve written well, but Paulson deserves no respect. He had no forsight, despite years of warnings from economists and investors, and he has overwhelming conflicts of interest.

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