Posted by
Professor Eisenstein on Tuesday, October 07, 2008 11:50:44 AM
The very real possibility of a President Obama is wrecking havoc with the world-wide economic system.
The one question that has not been asked is why is the "bailout" not working and what has changed since late September resulting in the business world essentially giving-up.
Yes, we did have a problem with the mortgage market, including Freddie Mac and Fannie Mae. Yes, the problem was being addressed by one presidential candidate, John McCain. Obama was sitting on the side line checking his Blackberry. McCain was still even in the national polls and had an electoral advantage.
With the idea of passing the bailout the Dow went up 700 plus points.
When that failed, because of Obama from all sources, the Dow crashed, but recouped 400 plus points the next day. Ironically this was interpretted as a success for Obama and the Democrats and scored points for them. The polls started showing favorable electoral maps for Obama.
But even when the final bailout package was passed the Dow kept on sinking. Today it is down to under 10,000 and sinking. But not only that, the world wide markets have all crashed. Why?
The explanation given by the politicians that it takes time for the bailout package money to work it way through the system lacks credibility. Everyone in the financial markets has already discounted that factor and they know the money is coming.
The big change is that McCain decided to have the Friday debate without a solution to the economic problem.
That singular act gave credibility to the idea that Obama could be president and the polls began to reflect that. As Obama's positive numbers in the polls increased the world wide markets numbers started going down.
The idea of an Obama presidency is causing the markets to crash and go down. That is the reason no one knows what the bottom is because it has nothing to do with economic issues and everything to do with political anti-business climate that is expected to come to Washington. That anti-business climate and anti-economic growth mentality is difficult to discount and consequantly there is not "bottom" to this down fall.
From an economic prespective, if you want to understand what an Obama presidency would look like -- look around you -- the coming world wide recession.