Robert Stein 1924-2014

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Tuesday, October 14, 2008

The Financial 9/11

Yesterday's stock-market surge is at least a temporary all-clear for millions of Americans to emerge from the shock and awe that has devastated their financial lives. As they look around at the rubble of savings, 401ks and home values, what are they thinking and feeling?

Across the country, there are reports of victims. "In some places," CNN reports, "mental-health hot lines are jammed, counseling services are in high demand and domestic-violence shelters are full."

In this disordered emotional climate, the wounded will be asked to decide on whom to trust to heal the national economy. Barack Obama and John McCain are offering band-aids, George W. Bush is dispensing bromides, but there is no national figure to "feel their pain."

In tomorrow night's debate, the presidential candidates will be under great pressure to posture as economic saviors in a situation ripe for demagoguery. McCain will no doubt promise to fight our way out and Obama to think through the disaster, but what voters will be searching for, more than ever, is empathy and trust.

The financial rescue farce of the past two weeks has made politicians of all stripes look foolish and impotent. Congress wasted valuable time arguing over Hank Paulson's now-abandoned plan to buy bad mortgages, then loaded the bill with pork and, only incidentally, added provisions that now are seen as the best answer to the crisis--putting money into banks and taking equity positions in return.

How much of the market panic could have been avoided if American politicians had acted with the ultimate good sense of Gordon Brown and the British, who have led the way out of the mess, at least temporarily?

There is no time now for postmortems, but McCain and Obama would do well this week to offer, not nostrums, but convincing evidence that they will rely on the best experience and judgment when the next disaster strikes.

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