Who benefits from Wall Street carnage?

Various and sundry authors have taken various and sundry positions on whether the Wall Street wreckage of this week benefits the Obama or McCain campaign more. We don’t know yet. We won’t even have much of a serious clue until the three-day rolling presidential tracking polls have several days of history behind them.

The conventional (Washington D.C.) wisdom calls Sen. Obama the victor. Why? He has spent more time blaring his "change" theme, and certainly more time and energy bashing today’s obviously weak economy, while announcing concrete steps to fix it. Sen. McCain meanwhile has talked about the economy’s apparently now non-existent "strong fundamentals," then later corrected himself and admitted there are problems. One might assume that Americans would buy more heavily into the Obama Zeitgeist than into the McCain mantra.

But a recent article on Politico.com cites "5 Reasons Why McCain is pulling ahead" (kind of like those annoying women’s magazines articles that list "7 ways to ditch your loser boyfriend" or "10 ways to lose 10 pounds.") One of the reasons the author cites for Sen. Obama’s recent drop in national polls as well as swing state polls that predict the electoral vote outcome is that Obama is losing his edge with voters as the preferred candidate to right the economy.

As the article notes: "’When Democracy Corps asked voters last week which candidate would ‘do a better job with the economy?’ Obama had a 50 to 44 percent advantage — down from a 16-point edge in mid August."

If after a reeling 500-point drop in the stock market, the near-death of insurance giant AIG, the federal takeover of Fannie and Freddie and the dissolution of Bear Stearns (and you know the rest) and Sen. McCain’s waffle on economic fundamentals, Sen. Obama cannot turn that foul ball into a home run, he better pack up and go home.

Wall Street’s Monday lurch has wiped Alaska Gov. Sarah Palin off the front pages. That’s probably a good thing for Gov. Palin. It hid from the front pages that her former press secretary made the loony claim that "Obama operatives" have "hijacked" for political purposes the state’s investigation of her firing of a top official when he refused to fire her brother-in-law, a state trooper. According to CNN.com:

"Former Palin Press Secretary Meg Stapleton told reporters in Anchorage that the power probe has been ‘hijacked’ by ‘Obama operatives’ for the Democratic presidential nominee — namely, Alaska state Sen. Hollis French, the Democratic lawmaker managing the investigation and an Obama supporter. French has denied working on behalf of the Obama campaign."

Rarely in the annals of American political history have claims so far-fetched been made by a high-level aide, whether present or former. Remember, dear readers, the Palin investigation was launched well before Gov. Palin was on the McCain team, and at a time when her name as a VP prospect was barely being mentioned.

Meanwhile, the two presidential candidates (and surrogates) made the rounds of the morning TV talk shows, describing their plans to revive the economy. Sen. McCain proposes:

— To appoint a high level commission to study the economic crisis.

— To protest any government bail out of insurance giant AIG (which took place the night after he made those comments).

— And to blame the "old boy network" and Washington corruption for today’s economic woes.

A commission should study the economy’s problems? Well, that means it might possibly make some widely ignored recommendations just in time for, say, the 2012 election?

Here is Obama’s prescription for righting the economy:

— Increased regulation of investment houses and banks.

— Streamline overlapping regulatory agencies.

— Blame the Bush Administration for today’s economic crisis

Sen. Obama is on the right track when he mentions reintroducing regulation into regulation-stripped U.S. economic system. After all, Wall Street’s woes are were created by the mortgage crisis. The mortgage crisis was fueled by unregulated mortgage mania, in which home loans were granted to people who were not required to produce financial documents (so-called "no-doc” mortgages.)

Yes, mortgage mania created the last "housing boom." But it was a false economic boom, because it was based on Americans being able to afford the steep rise in housing prices it created. And now we’re paying through this housing bust.

But does either candidate bolster my economic reassurance quotient? Not a mite.


(Bonnie Erbe is a TV host and columnist. E-mail bonnieerbe(at)CompuServe.com.)