Economy, Accusations Cap Week In Politics
MELISSA BLOCK, host:
This is All Things Considered from NPR News, I'm Melissa Block.
ROBERT SIEGEL, host:
And I'm Robert Siegel. Who would have thought that three and a half weeks from election day, with occupancy of the White House at stake, that that would be the number two story of the day, the week, the month, if not the year. The sound of markets crashing has sometimes made it hard to hear the candidates but they're out there and they've adjusted their messages. Barack Obama talks about the McCain plan to buy up bad mortgages and draws a line from McCain's response to crisis to his temperament.
Senator BARACK OBAMA (Democrat, Illinois; Presidential Candidate): This is the kind of erratic behavior we've been seeing out of Senator McCain. You remember the first day of this crisis he came out and said, the economy was fundamentally sound. Then two hours later he said we were in a crisis. I don't think we can afford that kind of erratic and uncertain leadership in these uncertain times.
SIEGEL: Meanwhile, McCain and his running mate Sarah Palin go after Obama's character. Has he been forthright about his relationship with 60s radical William Ayers?
Governor SARAH PALIN (Republican, Alaska; Vice-Presidential Candidate): Barack Obama says that Ayers was just someone in the neighborhood but that's less than truthful. His own top adviser said that they were quote certainly friendly. In fact held one of his first meetings of his political career in Bill Ayers' living room.
SIEGEL: Well, joining us now are our regular political commentators, E.J. Dionne of the Washington Post and David Brooks of the New York Times. Welcome back.
E.J. DIONNE (Political Commentator, Washington Post): Thank you.
DAVID BROOKS (Political Commentator, New York Times): Good to be here.
SIEGEL: Thanks to both of you. David, first, what do you make up the exchange of attacks on the integrity of one candidate and the stability of the other?
Mr. BROOKS: Well, a depressing race, gets more depressing. I mean, it's almost two-track. I mean, you got the story on Wall Street which is really going to dominate our lives in the next couple of years, and then they got the presidential campaign and the two barely touch. I mean, the John McCain mortgage proposal, I at least give him credit for proposing something. And the idea that if you don't shore up the mortgages then you shore up nothing is a fundamentally serious idea. And I don't know whether he's designed his program well enough or not but at least it's a stab in the right direction. In the debate they had earlier in the week, I thought the descriptions of the causes of financial mess were fictional and simplistic. And the idea they could carry on with their programs over the next two years which they've been talking about for last year is also fictional.
SIEGEL: I mean greed and criminality as the causes of the problem?
Mr. BROOKS: Well Obama says it's deregulation, which - deregulation is a slice of the problem. It's not the main cause of this financial crisis. John McCain talks about Fannie Mae and Freddie Mac, that's also a slice of the problem. It's not the fundamental cause. And what they both do is they totally excuse the American people as if these sub-prime mortgages were forced upon people.
SIEGEL: E.J. Dionne, what do you make of split-screen America this past week, the crisis on the one hand and these exchanges of personal attacks on the other?
Mr. DIONNE: Well, I disagree with David. I actually do think deregulation played an enormous role in this and it's not just somebody like me saying that. There are a lot of economists and people who used to be on the Fed saying that. But I think that the biggest thing that happened is that the crisis came and the whole election shifted Obama's way. And an awful lot of what's happening now is a reflection of that. That John McCain, whether you want to use the Democrats favorite word, and Joe Biden was using it too, erratic, or some kinder word, his initial response to this really was to go in one direction and then to go in the other, to show up and then not really play a big role in the negotiations over the bailout bill. And on the McCain side, you've had people in his own campaign say, if this is an election on economics we lose, so they are desperately trying to push the subject somewhere else. Now it's to Bill Ayers from the Weather Underground, who has since become a kind of semi-respectable civic figure in Chicago. And I think that McCain knows the campaign is slipping away from him.
SIEGEL: Do you think that either the charge that Barack Obama isn't telling us who he really is or John McCain is an erratic character who swings here and there too quickly, do you think that these are getting to people and moving votes in the election, David?
Mr. BROOKS: I really doubt it. McCain is erratic to the extent he's erratic because he's desperately behind, he's trying anything he can to win this election. Barack Obama is not a left-wing terrorist. He probably knew Bill Ayers a lot more than he said he did, but if you look at who Barack Obama's advisers are on economics, it's people like Paul Volker and Robert Rubin and Austan Goolsbee. These are not left-wing people. So I happen to think both these charges will not do much but the fundamental fact is that they're out of scope. If you got a big economic crisis that people are tremendously worried about, my view is you should be talking about nothing else.
SIEGEL: Let's assume for a moment that the finances of the nation and the world don't all improve dramatically over the next several weeks. How is this going to change our politics?
Mr. BROOKS: Well, I think the first thing to be said is the era of conservative free market economics is largely over. I do not think we're headed toward an era of global liberalism. The tremendous government interventions we've seen over the last couple of weeks are a product of the crisis and not a product of what we'll see after the equilibrium is restored. But I do think that conservative era is over.
SIEGEL: E.J., your thoughts about that?
Mr. DIONNE: I do think the conservative errors is over. I also think we're going to be entering a period of either very, very dangerously divided politics where people get very bitter, or very serious politics where everyone says, look the public's fear is important, we need government to help get us out of this mess. How do we figure out the best instruments for the government, both to protect people who are really going to be hurt if this downturn is severe, and how to get the economy moving again? So, I'm hoping that the hopeful view of a serious discussion of what public action should be is the way we're going to go.
Mr. BROOKS: Let me take another crack at this. What are the things the next president is going to face? Conservatively estimated, the next president will inherit a $750 billion a year deficit, about five percent of GDP. It's inconceivable to me that the next president is going to want to blow that up much further. They're also probably going to face a series of situations globally where countries around the world, notably Russia, China, even Europe will be also in financial distress, which will be spinning off dangerous political movements as you always get in severe downturns. And the idea that we can carry on in any predictable way in those circumstances, it seems to me massive new government programs, new healthcare, I think it's extremely unlikely.
SIEGEL: Big deficits, a likely recession that will depress revenues which will contribute to those deficits, and still the same entitlement problems, E.J, that we had at the beginning of this administration which haven't really been addressed. So that's on the menu for the next president.
Mr. DIONNE: Right. Now I don't think we should look at all these bailouts as a permanent charge against the government and it's not just someone like me. I mean, Alice Rivlin who is a deficit hawk most of the time, my colleague at Brookings, argues that for that for the short term, we cannot assume that this 700 billion is a charge forever. In fact, if anything turns out at all well, the government is going to get most of that back. My own view is you have to hive off what you're spending on the bailouts because we're going to need public action in areas like a healthcare, the education. We got to get the economy moving again. And if we get ourselves into the view that government has to stop everything else its doing or cut away back, we're going to make the economic mess worse.
Mr. BROOKS: But Obama, say Obama wins, he's given us three choices: Middle class tax cuts, tax cuts for 95 percent of the people, energy investment program on the Manhattan project level and healthcare. It seems to me in a period of recession, you need the tax cuts to stimulate the economy. You want the energy spending to create jobs. It seems to extremely likely that healthcare is the one that gets left off.
Mr. DIONNE: Except healthcare is going to be one of the biggest issues because in a recession lots of people lose their health coverage. So ironically healthcare is going to become a bigger issue and a lot of business is going to want to push this cause away.
SIEGEL: E.J. Dionne, David Brooks, thanks a lot to both of you once again.
Mr. DIONNE: Thank you.
Mr. BROOKS: Thank you.
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