New at Reason

Steve Chapman doubts that any of the White House hopefuls know how to handle a financial crisis.

Comments

Monkey Of Fear | March 17, 2008, 9:07am | #

Too bad that the only person in the race to speak to these concerns was Ron Paul, who has by now been written off as a has-been and something of an old coot/crank. I keep telling my friends that a time of testing is near, and that they should give ample consideration to Switzerland or Australia as a future home.

Bagehot | March 17, 2008, 9:38am | #

Just as Lincoln never ran on emancipation, nor did Nixon on arms control and comity with China, the next president may have to be the one to crack the entitlement nut, whatever is said on the trail. After all, it was just to
mollify the working classes and preserve capitalism, and that job was done long ago.
Scrap the lot.

LarryA | March 17, 2008, 10:14am | #

Steve Chapman doubts that any of the White House hopefuls know how to handle a financial crisis.

Steve’s wrong. They all know how to handle a financial crisis. What they know is wrong, but that won’t stop them from further screwing things up.

If they didn’t know how to handle a crisis, they could ask someone who does, but that’ll never happen.

thedifferentphil | March 17, 2008, 10:52am | #

To be fair, what president has ever actually understood economics? Certainly none have in my lifetime. It is their willingness to hire _and listen to_ experts in economics and other technical fields that is the key. Economists can help guide tax policy, regulatory policy and pension issues, such as Social Security. But big war spending, inflexible politics of Social Security and a big pandering Medicare prescriptions plan, those are the kind of things that put the budget in the crapper and are the result of not hiring and listening to good economists (well the war, that was just listening to conservatives complain for a decade that George H.W. Bush "should have finished the job," or, "the United States should never work with other governments on international problems," and other stupid, immoral and costly myths...).

Chris Potter | March 17, 2008, 11:04am | #

The clear implication is that either of the Democrats will finance their proposals the same way President Bush has financed his—by sending the bill to our kids.

I'm wondering how far off the day is when the rest of the world realizes that we're never going to be able to pay back our existing debts, never mind new ones. After that, even borrowing-and-spending won't be an option anymore.

That won't be a good day.

Michael | March 17, 2008, 12:02pm | #

Doesn't Europe face an even worse entitlement threat than the U.S., with a more rapidly aging population and a replacement birth rate well below ours? Wouldn't that put an even greater strain on the E.U. budget and the future strength of the Euro? Or would those politicians simply wave a hand and default on their obligations with nary a care since those bureaucrats don't have to face an angry electorate?

zig zag man | March 17, 2008, 12:30pm | #

"Or would those politicians simply wave a hand and default on their obligations with nary a care since those bureaucrats don't have to face an angry electorate?"

Kind of like the spoiled brat who loses at a game and throws the table into the air, scattering all the pieces everywhere?

The sad part is when it happens in real life, real people are the game pieces.

/that's the way it will probably work out.
//i hope i am gone by then.

R C Dean | March 17, 2008, 1:18pm | #

Doesn't Europe face an even worse entitlement threat than the U.S., with a more rapidly aging population and a replacement birth rate well below ours? Wouldn't that put an even greater strain on the E.U. budget and the future strength of the Euro?

For this reason, I have been consistently baffled by the decline of the dollar against the Euro.

What structural weakness does the dollar have that the Euro doesn't have in spades?

Windtell | March 17, 2008, 3:18pm | #

With the Euro there's strength in diversity, it covers 15 countries where you have a lot of different markets. But the coming recession in the US, the Fed printing and handing it out like there's no tomorrow, and fears of inflation fueling commodity growth, the dollar still isn't at rock bottom.

john | March 17, 2008, 3:35pm | #

Truly remarkable. We're in the most economically perilous times since 1932, and we have three complete economic illiterates seeking the presidency. For that matter we might as well throw the current Fed chairman into this group, since he seems to think that accelerating the downward slide of the dollar by further reducing interest rates is a proper strategy.

Don't be surprised by a several thousand point descent in the Dow in the coming week, followed by a world wide panic to bail out of dollar-denominated government securities.

Then we'll be in a full-fledged crash to make the Great Depression seem like a minor downturn.

Craig | March 17, 2008, 5:30pm | #

If McCain starts a new war or two, his spending will outdo Obama's and Clinton's in short order.

As for government spending being some fixed percentage of GDP, it's a ludicrous concept. Government is supposed to be constrained to a few enumerated functions (defense, law enforcement, the courts, etc.). As the economy grows, the percentage of GDP consumed by government should be steadily falling.

Joe S. | March 18, 2008, 1:04am | #

I doubt the market will crash. Real inflation is already at eight percent and that will drive the market up. Just not fast enough to make up for the shrinking value of the dollar.