Buried in a CNBC article entitled “Radical Measures May Be In The Wings” is a line which fairly well summarizes where world central banks stand today:

There’s also a sense that the concept of moral hazard may have become something of a luxury item in the current meltdown.

In other words, so much for all the free markets rhetoric we’ve heard for years, the Fed is now in panic mode and will pull out all stops necessary in dealing with the financial crisis.
Earlier today there was a telling quote from the Italian prime minister:

Italy’s Prime Minister said on Friday there is talk of suspending markets for a temporary period while the global financial crisis is sorted out, but there is nothing concrete in this idea yet.
Asked what European Union leaders might discuss if they meet in Paris this Sunday, Silvio Berlusconi told a news conference: “There is talk of suspending markets for the time needed to rewrite (international finance) rules.”

Berlusconi subsequently reversed his comment and the White House has since denied this rumor, but I’m not buying it. I believe they do have contingency plans to shut down financial markets if things spiral further out of cotrol. Frankly, it would be irresponsible for them not to do such planning.

At this stage in an election campaign it’s getting difficult for me to relate to “undecided” voters. Why can’t they, or don’t they, make up their minds? What are they waiting for?
As far as I can tell, there are two primary reasons. They are either:

• Extremely wishy washy and want to “open-minded” rather than make a commitment, or they
• Just don’t care about politics in general, and don’t want to invest much time or effort into making a decision

I was amused by a CNN segment I saw last night on undecided women voters. A reporter showed up as they had a debate-watching party.
“What are you looking to see, to help you decide?” the reporter asked.
A couple of women said they were looking for the candidates to offer specific proposals to help them with their problems, rather than general talking points.
After the debate several of the undecideds expressed disappointment because the candidates did not get “specific” enough.
I’m not sure why these women seemed surprised by this. The candidates talk in simplistic terms, among other reasons, because they are trying to appeal to voters who can’t make up their minds. If they were to throw a boatload of statistics at a marginally-interested voter, the viewer would simply turn away in boredom.
Note to the undecided women: if you really want to know more details on what the candidates are proposing, you simply have to visit their websites. It’s really not that difficult. Otherwise, stop blaming the candidates because you can’t make up your mind.

As virtually everyone–even the holdouts on rightist radio–now recognizes, this election is about the economy. It’s no coincidence that Senator McCain’s poll numbers have been sinking as the stock market has been tanking.
Last night’s debate was one of McCain’s few remaining opportunities to change the dynamics of the race. But to do so, to use a baseball analogy, he had hit at least a double, if not more. I’m not even sure he even connected for a single. Here were McCain’s three major economic talking points in coping with the recession:

• Earmarks
• Freezing government spending
• Some kind of mortgage bail-out plan

The first two of these are wild strikes, and the third is probably a foul off.
Earmarks: I assume that many, if not most, voters don’t like wasteful pork barrel spending. However, it’s not clear to me that this issue sways many votes, even during good times. Given how both parties indulge in earmarks, I suspect that many voters simply don’t believe a presidential candidate who claims he or she will end the practice. And even if they are inclined to believe to believe it, how many actually care?
During bad economic times, as we are today, voters are even less concerned. People are scared about their personal finances. They are worried about their jobs, their health care coverage, their home’s value, their retirement savings. During this time of duress, is a crusade against earmarks going to resonate? No.
Freezing government spending: A second tenant of McCain’s economic “plan” is to freeze government spending. This point misses with voters for the same reason that earmarks fails–Americans are more worried about their own economic fortunes than they are about deficit spending. They want government to do more, not less.
Moreover, as an economic matter, it simply doesn’t make sense to curtail government spending during a severe downturn. There’s no driver for jobs in the private sector, apart from health care. Government spending is the last refuge we have to combat unemployment. It would be foolish to cut it now.
Mortgage bail-out plan: This is the only economic swing McCain launched that may have connected. He unveiled this idea early in the debate. However, he failed to follow up and elaborate on the proposal; instead, he reverted to his worn, ineffectual lines on earmarks and government spending. So, I can’t comment on the merits of this idea, though my hunch is that it’s not going to gain political traction.
Given conservative opposition to increased government involvement in the housing market, and given the mortgage provisions already included in recent bailouts this plan looks like a non-starter to revive the McCain campaign.
Drastic times call for drastic measures. Once again Senator McCain failed to demonstrate that he can cope with the severity of our economic crisis.

On NBC’s Meet The Press yesterday Chuck Todd made a good point that the McCain campaign seems to be running on a series of tactics rather than following a comprehensive strategy. Almost every day, it seems, they throw new accusations out there, hoping to find something that sticks. The campaign talking points are driven by changing news headlines rather than a developing narrative.
A month from the election McCain is reportedly switching tactics again and now going after Senator Obama’s character:

Sen. John McCain and his Republican allies are readying a newly aggressive assault on Sen. Barack Obama’s character, believing that to win in November they must shift the conversation back to questions about the Democrat’s judgment, honesty and personal associations, several top Republicans said.
. . .
“We’re going to get a little tougher,” a senior Republican operative said, indicating that a fresh batch of television ads is coming. “We’ve got to question this guy’s associations. Very soon. There’s no question that we have to change the subject here,” said the operative, who was not authorized to discuss strategy and spoke on the condition of anonymity.

Change the subject from what, you may ask? The economy:

Mr. McCain’s advisers said their hope was that the issue of the economy would recede somewhat from the public consciousness, now that Congress has passed a bailout plan, and open the way to try to turn the contest back into a referendum on Mr. Obama’s credentials. They argued that given everything that had happened, Mr. McCain remained in easy distance of Mr. Obama, evidence of what they said were underlying problems with his appeal.

In a typical election year, McCain’s fall back to cultural/character issues might have resonated. But this is not a typical year. The economy is literally imploding before our eyes. We are already approaching economic malaise not experienced in America since the 1991 recession, and it’s getting worse.
Many voters are now receiving negative quarterly equity account statements, or pink slips. Good luck trying to sway their vote with William Ayers. For those voters, this Obama ad is right on target:

As the bailout bill issue has hovered of Capitol Hill the past couple weeks, I’ve thought that neither presidential candidate has stepped forward and shown strong leadership on the issue. We’ve had grandstanding, we’ve had hedging, but we really haven’t had anyone show he has adequate command over what’s happening.
That being the case, on C-SPAN I heard Simon Johnson make a good proposal. He suggests the presidential candidates have a debate solely focused on the current financial services crisis. There are three good reasons to do this:

• Provides an opportunity for the candidates to show leadership and articulate their philosophy on coping with the problem
• A debate would facilitate and enhance the national discussion on the crisis
• This issue is so critical that it will shape the first couple years of the next presidency. It’s important that each candidate offer his vision on how he will manage it

I’d like to see a 90 minute or two hour debate just on this issue. It might not be a ratings winner on network TV, but I think the seriousness of this issue demands that the next president be given sufficient time to tackle it on national TV. This is a complicated matter which can’t be settled with sound bytes.