There has been a liquidity crisis, which means the dysfunctional credit markets collapsed temporarily, not forever. When people lack confidence in economic calculation, the economy paralyzes. Meanwhile, the Iraq War has improved, so General Obama's opposition to the surge is discredited, another reason he neatly changes the subject.
Stocks were sold as if the world is coming to an end. The media encouraged fear of an economic Armageddon, consequently, a political panic ensued. The schizophrenic McCain campaign -- Obama is wonderful, no, risky -- has been slow to adapt. People do not understand what has caused the economic mess. They want change. This inescapable synergy tilts toward Obama, who is mindlessly applauded when he boasts he was for change first, as if he defined a profile in courage.
The common misconception fed by the infatuated media is: Wholesale deregulation by the Bush administration is the culprit. In reality, most Democrats and some Republicans share a long history of irresponsibility. The machinations are largely creatures nurtured in government test tubes, broken, the virus highly contagious. History is thus: Government intervention, per Nobel Prize-winning economist Milton Friedman, actually exacerbates instability.
Without the collusion, if not the encouragement of the feds, these mortgages would not have been given to poor credit risks -- unknown income, no down payment. But the federal government, via its quasi-governmental agencies known as Fannie Mae and Freddie Mac, subsidized the loans, assumed the risk. Fannie and Freddie should never have been created. President Bill Clinton expanded their charter.
A few years later, Rep. Maxine Waters (D-Los Angeles) said we should not " fix something that wasn't broke." She praised "the outstanding leadership" of Fannie Mae CEO Franklin Raines, who subsequently left in disgrace but with $90 million of bonuses after an accounting scandal.
Obama is the largest recipient ever of campaign money from Fannie/Freddie, which generously supported mainly Democratic Fannie and Freddie defenders like Senate Finance Committee chair Chris Dodd (D-Conn.) and his House Financial Affairs Committee counterpart, Barney Frank. Frank resisted reform: "I want to roll the dice a little bit more in this situation towards subsidized housing."
Do we now similarly "roll the dice" on the untested Obama? We do not know much about Obama. He portrays his community organizing as altruistic. In fact, he parlayed those community contacts into a political base.
Ambition is not bad. Own up to it. More to the point, Obama affiliated with the Rev. Jeremiah Wright's church not because of its spirituality but because of its politics.
I cannot say Obama hates America or Jews, but Wright, in my opinion, hates both. That someone as bright and curious as Obama could attend Wright's church for so many years, where his sermons were available on tape, and not know what Wright was/is about is implausible.
Obama used Wright and his church for political volunteers, voter registration and turnout then this year opportunistically discarded him. Obama succeeded as a go-along, get-along Chicago machine politician, not as an anti-establishment reformist.
Voters confuse Obama stagecraft with vision. He is articulate and confident but also glib and cocky. This is not a humble man who knows what he doesn't know. This is someone who earlier this year dismissed Iran as a threat because it, unlike the former Soviet Union, is "a small country."
The Soviets, precisely as a major power, acted rationally; the doctrine of mutually assured destruction deterred nuclear war. Iran has no such inhibitions, professor Obama: Such small rogue nations are temperamentally capable of a nuclear first strike.
Readers of this newspaper are interested in Israel. We know McCain is absolutely solid. Obama is, at best, evolving. For example, immediately after his American Israel Public Affairs Committee speech endorsing Jerusalem as the capital of Israel, Obama abruptly reversed himself.
If Israel were under attack and its prime minister called the White House at the proverbial 3 a.m., who would you want at the other end of the line? If you're for Obama for other reasons, that's fine. But don't say it's because of his position on Israel.
Many voters see Obama as an agent of change, when he, in fact, is an ideologue -- most left voting record in the Senate. In a centrist nation, the favored Obama is much, much farther to the left than the struggling McCain is somewhat to the right.
On the economy, maverick McCain would be more likely to take on the establishment. McCain had warned more than two years ago, "American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole." As even the liberal Washington Post editorialized, Obama was AWOL.
Obama had an undistinguished record as a part-time member of the Illinois Senate, where he often voted simply "present." Then in his brief two years in the U.S. Senate, he has never taken on his party's leadership. Unlike McCain, Obama does win the congeniality award not because he worked in a bipartisan way but because he never made waves.
The unqualified Obama communicates well; the qualified McCain communicates poorly, and communicating is a qualification. But when the American economy requires seismic change to compete in the global economy, who will adapt? McCain -- long pro-change record -- or Obama -- short anti-change record?
Who would be more likely to embrace a Smoot-Hawley Tariff associated with the Great Depression -- protectionist Obama or free-trader McCain? An economic corollary: If you think education reform is essential, do you want McCain, who champions innovation and supports school choice, or Obama, who is beholden to the teachers union and opposes school choice?
Obama has not run anything, met a payroll or served in the military. No Obama legislation or even bipartisanship. Admittedly contentious, McCain has challenged his party's leadership, even worked collaboratively with opposing Democrats who, until recently, praised him.
For the economy, the present cure could be worse than the disease, unless down the line we get the government out of the banking business. McCain can do that. He believes in limited government, low taxation, economic opportunity and growth.
Obviously, we can't bet the farm on Obama.
Arnold Steinberg is a political strategist and analyst.