McCain's Top Economic Advisor: Americans Are Whiners

A couple days ago McCain's top economic advisor (and likely pick for Treasury Secretary) former Sen. Phil Gramm said:

"You've heard of mental depression; this is a mental recession," he said, noting that growth has held up at about 1 percent despite all the publicity over losing jobs to India, China, illegal immigration, housing and credit problems and record oil prices. "We may have a recession; we haven't had one yet."

"We have sort of become a nation of whiners," he said. "You just hear this constant whining, complaining about a loss of competitiveness, America in decline" despite a major export boom that is the primary reason that growth continues in the economy, he said.

"We've never been more dominant; we've never had more natural advantages than we have today," he said. "We have benefited greatly" from the globalization of the economy in the last 30 years. ...

"Misery sells newspapers," Mr. Gramm said. "Thank God the economy is not as bad as you read in the newspaper every day."

Wow. Really? McCain's top economic advisor is telling Americans that all of the problems they are facing are psychological?? It's all in their heads? They aren't actually having trouble making ends meet, it's a figment of their imaginations? They aren't really paying over $4/gal for gas while oil companies make record profits? And the record number of home foreclosures is just imaginary! Yeah, it's just like The Matrix, you think your home is about to be taken away, but that's just because you believe that's what is happening (probably because the bank told you), but if you really just realized that it was all fake and in your head, the foreclosure process would just stop, and gas would cost $1.50/gal again, and we wouldn't be losing millions of jobs, and you could fly, and know kung-fu, and you could stop bullets with your mind! Woah. Isn't life wonderful when reality is just all in your head?? It must be great to live in a fantasy world where Americans aren't saving the lowest amount since the Great Depression (next to nothing). It's all in our heads! But hell, don't take my word for it, or the economic data, or all the Americans that are just trying to hang on, let's hear it from an expert:

The United States has already slipped into a deep recession that could be the most serious since World War II, said Martin Feldstein, president of the Cambridge group that is considered the official word on economic cycles.

"The situation is bad, it's getting worse, and the risks are that the situation could be very bad," Feldstein said in a speech yesterday at a financial industry conference in Boca Raton, Fla.

Feldstein, president of the National Bureau of Economic Research and a professor of economics at Harvard University, said the chief causes of the shrinking economy are sinking housing prices, months of job losses, and turmoil in the financial markets.

Yeah, and that was back in March. The DNC responds:

What John McCain, George Bush and Phil Gramm just don't understand is that the American people aren't whining about the state of the economy, they are suffering under the weight of it -- the weight of eight years of Bush-enomics that John McCain and Phil Gramm have vowed to continue. How dare John McCain and his advisers so callously dismiss the challenges the American people face. No wonder voters feel John McCain is out of touch, he and his campaign don't even understand the everyday issues Americans are dealing with.

And Obama:



And this from his campaign:

One of Senator McCain's top economic advisors may think that when people are struggling with lost jobs, stagnant wages, and the rising costs of everything from gas to groceries, it's merely a 'mental recession'. And Senator McCain may think it's sufficient to offer energy proposals that he admits will have mainly 'psychological' benefits. But the American people know that our economic problems aren't just in their heads. They don't need psychological relief - they need real relief - and that's what Barack Obama will provide as President.

And McCain's response:

Phil Gramm's comments are not representative of John McCain's views. John McCain travels the country every day talking to Americans who are hurting, feeling pain at the pump and worrying about how they'll pay their mortgage. That's why he has a realistic plan to deliver immediate relief at the gas pump, grow our economy and put Americans back to work.

And that response is weird, because earlier McCain's own campaign said that Gramm was speaking on behalf of McCain on his economic policy:

The McCain campaign is working hard to distance itself from statements made by economic adviser Phil Gramm describing the current economic downturn as a "mental recession" and saying America had "sort of become a nation of whiners."

But in an initial statement published by Politico and then, seemingly, removed from its site, a McCain campaign aide actually stood by Gramm's remarks, saying the interview as a whole was merely meant as a preview of the Senator's economic agenda.

"Mr. Gramm was simply saying that we are laying out the economic plan this week," the piece quoted a "McCain official" as saying. "The plan is comprehensive, providing immediate near-term relief for Americans hurting today as well as longer-term solutions to get our economy back on track, secure our energy future and deliver jobs, prosperity and opportunity for the next generation. We're laying out that plan this week with an emphasis on the critical importance of job creation, and it's been a great success so far."

Only after the fallout from Gramm's statement did the McCain campaign fully backtrack.

And then the Washington Post:

Speaking today from New York, where he was meeting with the Wall Street Journal Editorial Board on McCain's economic policies, Gramm said the nation's economy was initially thought to have grown by an anemic 0.6 percent in the first three months of the year.

What is funny is that McCain can even claim that the views of his top economic advisor, who drafts McCain's economic policy (in addition to Bush of course), and speaks for McCain on the economy, wasn't providing McCain's view of the status of the economy. In fact....:



And that's the thing that the media doesn't seem to understand (or want to report), that these comments are directly in line with not only McCain's views, but the views of all conservatives. It is shocking how out of touch Republicans are with the American people, and how indifferent they are to their suffering. But how is this a surprise coming from the party that through administration after administration cuts taxes for the rich, while cutting social services for the not-rich. Almost every single choice they make can be broken down to "Does this help the rich while screwing the poor?", and if the answer is yes, you can be sure that the Republicans support it. And the sad thing is, I'm not even exaggerating. The problem is we never have a honest discussion of the policies and ideology of the Republican Party, even after it has devastated our economy and the lives of so many Americans for the last 8 years, and then decades before that. Don't expect that discussion to come from the media, it is owned by rich Republicans.

And that's the sick part about the Gramm thing, the media briefly picked it up, but not because his insistence that the recession was all in our heads, but because he inartfully called Americans "a nation of whiners". That is why it got a little bit of coverage, not because of how messed up and out of touch Gramm, McCain, Bush and all Republicans are, or how horrible their policies have been for this country.

Why can't we have that candid discussion in this country? If people woke up and just had some basic understanding of politics, current events, and the economy the Republican Party would be dust, because a party with such greedy and worthless (for everyone but the rich) policies and priorities could not survive if it weren't for extreme ignorance and apathy, which are the only renewable resources we have a limitless supply of in this country.

Update: I should also note that the "nation of whiners" comment was a thousand times more offensive than Obama's "bitter" comment, which was actually the exact opposite, as Obama was actually acknowledging that people are hurting financially, and are sick of being left behind by Washington year after year. Obama caught hell for weeks over those empathetic comments. Yet McCain's repeated comments showing how completely, callously out of touch he is with the plight of everyday Americans results in next to no coverage.

Bitter and Angry in Rural Pennsylvania: Obama's Reality vs. Hillary's Fantasy (Repost)

[This is an excellent response to McCain/Hillary's fake and patronizing feigned outrage over Obama's matter-of-fact observations of the plight of impoverished rural people who have been left behind and screwed over by Washington for decades. The writer of this is a Pennsylvanian, so they can speak to the truth of Obama's comments in a way that I cannot, and a way that McCain/Hillary doesn't want anyone to hear. Please forward this to friends and family, and please visit the original page and rec it if you like the diary.]

Bitter and Angry in Rural Pennsylvania: Obama's Reality vs. Hillary's Fantasy
by astral66, DailyKos

Maybe there aren't many Bubbas driving around in pickup trucks with the classic bumper sticker "God, Guns and Guts Made America Free"  where Obama's detractors live, but here in rural Pennsylvania that line may as well replace "e pluribus unum" as the motto on the national currency.

I live in western Pennsylvania, and I can tell you, people here are bitter and angry. Poverty is prevalent. People hunt squirrels and eat them, along with raccoon stew. People also hunt deer here, not for sport, but so they can put meat in their freezer so they can feed their families. They cut wood in the forests and heat their homes with wood stoves because they can't afford to pay the gas bill. I know a guy who goes to old landfills to dig up old milk and beer bottles to sell on eBay. He uses the proceeds to buy clothes for his family at the Salvation Army (and to pay for his dial-up connection).

Racism and prejudice are ever-present here. A friend of mine is part-owner of bar in a small rural town south of where I live. I meet up with him there occasionally and watch as down-and-out people come in with their disability and welfare check money and drink it away. It's a pretty depressing place, but it does serve as the social center for a town that has seen its few industries shut down and the local people's jobs eliminated or shipped off elsewhere.

I hear the usual rants there, that it's all the fault of gays and minorities and immigrants (although those aren't the terms used, but rather the usual, virulent slurs). A black man walked in the last time I was there, and a guy near me at the bar muttered in a not-so-quiet way, "What's he think he's doing in here?" When I brought up the presidential race and Obama with another man at the bar, his response was, "there ain't no way America is ever going to vote for a black guy." Later on my bar-owner friend told me about his experience talking about Obama with another woman at the bar, and her angry response was that "it's because of half-breed n*****s like him that America is in such bad shape today."

Prejudice, racism and fear do run rampant in areas like this. People are poor. They are in bad health, overweight from a deep-fried diet, and toothless from the lack of dental care. They are unemployed. They are uneducated. They do cling to their hunting rifles and to their religious beliefs. For many, it is about all that they have. The towns around here are full of decaying, boarded up buildings. People live in rundown old trailers with abandoned cars in the front yard. I have seen people using an old car as a stable, with their goat tied to and living in it. I could drive you by a least three old houses that have Confederate flags in the windows.

So go ahead and discount Obama's talk of how bitter and angry that some of the people of rural Pennsylvania are. Call him elitist for taking the time to pass through areas such as this to listen to what the people have to say, and to then relate what he has heard to people in more prosperous parts of the country when he is asked about it. I have lived in San Francisco, and let me tell you, there is a marked difference between the general attitude there and the attitude here in the "rust belt". Go ahead and dismiss everything that Obama said as political posturing. Let Hillary and McCain "pick him apart" and parse his words. But please keep in mind that when Obama said:

"it's not surprising then that they get bitter, they cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations."

That he is 100% accurate in his assessment.

I know, because I live here, my family and my friends' families have lived here for generations, and we see it every day, all around this region. There is a very fine line between poverty and prosperity here, where making above $20,000 a year puts you in the realm of the "haves", but also knowing that you're one contract termination away from joining the ranks of the "have-nots".

I come from a family of dairy farmers. I know what it's like to spend up to 12-16 hours a day sitting on a tractor for three dollars an hour, which I did through high school and every summer until I was fortunate enough to head off to college. Many of my friends were also fortunate and went to school, and then relocated to other parts of the country. Some of us were able to come back under better circumstances, but the large majority of people here are not as fortunate.

Thirty years worth of the right wing dismantling our public education system has taken its toll. Thirty years worth of mismanagement of the economy, of shutting down factories and shipping jobs out of the country, of subsidizing corporate farms and taxing family farms out of business, has taken its toll.

Yes, people are angry, and bitter, but Obama never said that they aren't resilient, optimistic or hard-working. Those are Hillary and McCain's twisted words, and for them to stand up and suggest that rural Pennsylvanians aren't fed up with the way things are, only reveals how out of touch they really are with at least this part of the country.

Of course, all McCain has to do is suggest to poor rural folk that the party of gun-control, gay marriage, and NAFTA is going to take away what little they have left, and rural conservatives will vote for him, just as they did for Reagan, Bush I and Bush II. As for Hillary, the more she "takes apart" Obama's message, the more she does the GOP's work for free. If Hillary can't see that the people of rural Pennsylvania are bitter, and angry, and mad as hell about the way things are, then she needs to step down from that one hundred million dollar platform of hers and take a real look around.

In western Pennsylvania I hear two things: the "God, Guns and Guts" crowd see John McCain as the heir-apparent to the mantle of rural conservative values; and the people who hope for some kind of change see Barack Obama as the person who understands the situation that we are in, and maybe is the one who can lead us in a new direction. What I don't hear is anyone talking about whatever and whomever it is that Hillary claims to stand for.

In the end, I think this is all a "lost in translation" much ado about nothing episode.

Going back to Obama's statement, and keeping in mind that he was speaking to a specific group of supporters in San Francisco, and keeping in mind that he was discussing a variety of "talking points" in the previous paragraph, I think that it is the absence of the word "issue" in this particular portion of his response to one of the attendee's questions that is lost in translation from the actual event to the transcript spun in the media.

So let's break it down:

"'Well, what is this guy going to do for me? What's the concrete thing?' What they wanna hear is -- so, we'll give you talking points about what we're proposing -- close tax loopholes, roll back, you know, the tax cuts for the top 1 percent. Obama's gonna give tax breaks to middle-class folks and we're gonna provide health care for every American. So we'll go down a series of talking points.

Obama is offering:
- closing tax loopholes
- roll back taxes for the top 1 percent
- tax breaks to the middle class
- health care for every American

But:

"But the truth is, is that, our challenge is to get people persuaded that we can make progress when there's not evidence of that in their daily lives. You go into some of these small towns in Pennsylvania, and like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing's replaced them."

"So it's not surprising then that they get bitter" and "As a way to explain their frustrations...they cling to" issues that focus on:
- guns
- religion
- antipathy to people who aren't like them
- anti-immigrant sentiment
- anti-trade sentiment

It's the usual laundry list of GOP hot-button talking points.

What Obama was doing was contrasting his talking points, with the tradtional GOP talking points that he has to contend with if he is going to break through and reach these traditional blue-collar voters.

I can't imagine that anyone who was in the room with Obama misunderstood this. It's only when the transcript is removed from the context in which the information was delivered that the MSM begins to spin it into something that it's not.

Obama Talks To Americans Like Adults, Hillary & McCain Respond By Treating Americans Like Children

So last week at a fundraiser in California, Obama addressed the relationship of rural voters who have been left behind for decades and politics, pointing out that they have been promised so much for their votes, but have been forgotten, leading them to become bitter and cynical about politics. He also correctly pointed out that dire times push people to cling to what few things they can control, which is then exploited by those with an agenda (let's call them Republicans) to stir up religious fervor, or fear of losing their gun rights, or xenophobia so they can scapegoat immigrants for the economic policies of the government, while successfully demonizing immigrants. He was spot on, and once again showed the kind of down to earth honesty that has been a hallmark of his campaign, the talking to people like they are adults rather than pandering with fake compassion and fake promises. Here is a transcript:

So, it depends on where you are, but I think it’s fair to say that the places where we are going to have to do the most work are the places where people are most cynical about government. The people are mis-appre…they’re misunderstanding why the demographics in our, in this contest have broken out as they are. Because everybody just ascribes it to ‘white working-class don’t wanna work — don’t wanna vote for the black guy.’ That’s…there were intimations of that in an article in the Sunday New York Times today - kind of implies that it’s sort of a race thing.

Here’s how it is: in a lot of these communities in big industrial states like Ohio and Pennsylvania, people have been beaten down so long. They feel so betrayed by government that when they hear a pitch that is premised on not being cynical about government, then a part of them just doesn’t buy it. And when it’s delivered by — it’s true that when it’s delivered by a 46-year-old black man named Barack Obama, then that adds another layer of skepticism.

But — so the questions you’re most likely to get about me, ‘Well, what is this guy going to do for me? What is the concrete thing?’ What they wanna hear is so we’ll give you talking points about what we’re proposing — to close tax loopholes, you know roll back the tax cuts for the top 1%, Obama’s gonna give tax breaks to middle-class folks and we’re gonna provide healthcare for every American.

But the truth is, is that, our challenge is to get people persuaded that we can make progress when there’s not evidence of that in their daily lives. You go into some of these small towns in Pennsylvania, and like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing’s replaced them. And they fell through the Clinton administration, and the Bush administration, and each successive administration has said that somehow these communities are gonna regenerate and they have not. And it’s not surprising then they get bitter, they cling to guns or religion or antipathy to people who aren’t like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations.

Now these are in some communities, you know, I think what you’ll find is, is that people of every background — there are gonna be a mix of people, you can go in the toughest neighborhoods, you know working-class lunch-pail folks, you’ll find Obama enthusiasts. And you can go into places where you think I’d be very strong and people will just be skeptical. The important thing is that you show up and you’re doing what you’re doing.

Great right? Refreshing honest, he understands the dynamic, he understands how people, especially those left behind by government, are less than enthusiastic about their predicament, especially as food and gas prices skyrocket and houses are foreclosed upon. Enter Hillary with her characteristic patronization:

I saw in the media it's being reported that my opponent said that the people of Pennsylvania who faced hard times are bitter. Well, that's not my experience. As I travel around Pennsylvania, I meet people who are resilient, who are optimistic, who are positive, who are rolling up their sleeves. They are working hard everyday for a better future, for themselves and their children.

Pennsylvanians don't need a president who looks down on them, they need a president who stands up for them, who fights for them, who works hard for your futures, your jobs, your families.

Well I'm glad she set the record straight. What Pennsylvanians need is someone who made $109 million in the last few years to tell them what they think, to tell them that they aren't bitter or cynical about politicians and their promises. It is also interesting that Hillary, who never misses an opportunity to co-opt every depressing story of a lost pension or a dying family member for her campaign, somehow never sees downtrodden people, or people who are angry and want change. She must be getting all of those heart wrenching stories from happy, upbeat people. And let's be clear, Obama never implied that the people of Pennsylvania or anywhere else aren't resilient or hard working, he just isn't going to ignore the obvious to score cheap political points. However who is surprised that she would try to take a cheap shot here? She obviously needed to get the news off her and her husband's lying about Bosnia, and Bill's shady business dealings and her conflicts of interest, and her refusal to fire Penn, and what better way to deflect attention than to tell Pennsylvanians what they think?

She wasn't the only one who gleefully attempted to strike at Obama:

Asked to respond, McCain adviser Steve Schmidt called it a "remarkable statement and extremely revealing."

"It shows an elitism and condescension towards hardworking Americans that is nothing short of breathtaking," Schmidt said. "It is hard to imagine someone running for president who is more out of touch with average Americans."

Yes, Obama is apparently out of touch with average Americans because he acknowledges the hard times that people go through and how being consistently forgotten by Washington politicians has made some people jaded and frustrated. Apparently McCain and Hillary (always in good good company together) are the ones really in touch with the little guy, Hillary with her millions and her corporate boards and getting a free ride on her husband's political career her entire adult life, and McCain with his complete obliviousness to the looming economic shitstorm that has already hurt millions upon millions of Americans. Both of whom, you may notice, are defenders of the status quo, the Reagan consensus of economic policy that continued uninterrupted through the last four administrations, including Bill's. But yes, the black man who came up from nothing, raised by a single parent, who lived for a good chunk of his childhood in a third world country, and never got anything he didn't personally work his ass off for, is the elitist who is out of touch with Americans, because he spoke honestly to Americans about the problems affecting Americans, and the concerns that anyone with the slightest clue can see reflected in the eyes of Americans in every part of the country. But no, let's tell Americans that they are happy with how things are going and that everything is okay. And let's try to score cheap political points when a politician actually speaks to people like they are adults.

Obama's campaign responded to McCain after their attack:

Senator Obama has said many times in this campaign that Americans are understandably upset with their leaders in Washington for saying anything to win elections while failing to stand up to the special interests and fight for an economic agenda that will bring jobs and opportunity back to struggling communities. And if John McCain wants a debate about who's out of touch with the American people, we can start by talking about the tax breaks for the wealthiest Americans that he once said offended his conscience but now wants to make permanent.

And Obama also responded here:



And some journalists actually get it for a change:



Update: Hillary apparently doesn't take notice that even the media can see right through her patronizing idiocy, so she continues to attack Obama, parroting the same statements coming from McCain's campaign, calling Obama "elitist and out of touch". I do love that Hillary is using a classic GOP line of attack against Obama, responding to any hint of intelligence or candor as "elitist", just as every Republican from Bill O'Reilly and Rush Limbaugh to George Bush and John McCain have accused Democrats as elitist over the years. This isn't the first time Hillary has done this either, and in doing so she gives away her Bush-like contempt for thinking. It shouldn't be surprising though, given that Democrats have always been better educated than Republicans, and every survey and exit poll has shown consistently that Obama's supporters are better educated than Hillary's supporters, so it is only natural that Hillary would use that same old Republican line of attack that intelligence is synonymous with elitism. I'm just waiting for her to call Obama a latte-drinker. Apparently you can only be "in touch" if you make $109 million and have had everything handed to you on a silver platter, and think that the people taking to brunt of the recession are happy about it. But once again, Hillary and McCain are two peas in a pod. I'm still waiting for them to officially become running mates, they could make a beautiful "more of the same" ticket.

Update #2: Harvard University political scientist Theda Skocpol comments on the cynical hypocrisy of Hillary's feigned indignation over Obama's observations, and shows us that the Clintons have said the same things many times, in more cold strategic tones, that they are now attacking Obama for pointing out:

I have been in meetings with the Clintons and their advisors where very clinical things were said in a very-detached tone about unwillingness of working class voters to trust government -- and Bill Clinton -- and about their unfortunate (from a Clinton perspective) proclivity to vote on life-style rather than economic issues. To see Hillary going absolutely over the top to smash Obama for making clearly more humanly sympathetic observations in this vein, is just amazing. Even more so to see her pretending to be a gun-toting non-elite. Give us a break!...

This has to be one of the few times in U.S. political history when a multi-millionaire has accused a much less wealthy fellow public servant, a person of the same party and views who made much less lucrative career choices, of "elitism"! (I won't say the only time, because U.S. political history is full of absurdities of this sort.) In a way, it is funny -- and it may not be long before the jokes start.

Update #3: As an interesting aside, I just wanted to point out that this bitterness and disengagement is in no way an American phenomenon, this is a human phenomenon. In Naomi Klein's The Shock Doctrine she describes the same process leading to the rise of violence and religious extremism in Iraq following our rape of their economy:

When the occupation proved unable to provide the most basic services, including security, the mosques and local militias filled the vacuum. The young Shia cleric Moqtada al-Sadr proved particularly adept at exposing the failures of Bremer's privatized reconstruction...

People get bitter when they get screwed, and there are always people waiting to exploit those feelings for their own agenda, whether it be Republicans here in the US, or religious fundamentalist militias across the world in Iraq. Anyway, think on that...

Update #4: Here is an video of Obama speaking today, addressing Hillary's "playing politics" with his observations of the economic plight of many Americans. He also gets in some very good lines about her pretending she is a hunter now in her most recent attempt at pandering for votes. Give it a watch:

A Junkie Metaphor, McCain Plays The Enabler

Our economy is sick--no, it has OD'd on greed, corruption and cronyism. Obama realizes that the system needs an overhaul, some forced rehab if you will. Hillary doesn't want to connect the dots and talk about the root of the problem, and wants to ask the dealers for advice. McCain just wants to give the economy another hit of the not-so-good stuff, which comes as no surprise, given that the dealers are bankrolling his campaign:

McCain and Obama: What to Do About Wall Street's Addiction to Risk
by Robert L. Borosage, Campaign for America's Future

What should we do about Wall Street's speculators who, stoned on risk and greed, have triggered a financial crisis that Alan Greenspan calls the worst since the Great Depression. In back to back speeches, John McCain and Barack Obama laid out their remedies last week. The contrast could not be more stark. Obama prescribed a withdrawal program. McCain suggested slipping the risk addicts more drugs.

Hillary's Answer To The Economy: Ask The Republicans, I Don't Know

Last week Hillary admitted two things to us concerning the economy. First, that she doesn't understand economics (which is no surprise after seeing how she runs her presidential campaign's finances, and debts). Second, that when faced with a big recession, her plan is to consult the very free market ideologues that got us into this mess in the first place.

During a speech on her plans to fix our faltering economy, she outlined creating an advisory panel consisting of the same free market fundamentalist cadre (including Robert Rubin, contributor to the plundering of Russia and fellow destroyer, along with Greenspan, of the Asian Tigers in the late 90s, and Paul Volcker, destroyer of the Bretton Woods system and architect of the "Volcker shock" which laid waste to South American economies in the early 70s) that laid the foundation of our current economic collapse:

[Alan Greenspan] has a calming influence still to this day on Wall Street -- don't ask me why because I never understand what he's saying -- but nevertheless people respond to that Delphic oracle approach. I think it would be wise to include him.

Now that seems like a good idea. Let's finally get a Democrat back in the White House, and then let's ask the Republicans what to do with the country. Hell, what was good for Iraq and Iran apparently works for the economy as well. And now officially two (Hillary and McCain) out of three presidential candidates admit to not understanding economics, going into the worst recession since the Great Depression. I'm just overflowing with confidence.

Here is what Robert Borosage of the progressive think tank Campaign for America's Future has to say about her plan:

Are the folks who led us into the mess the best ones to lead us out? Yesterday in a speech on credit crisis, Hillary Clinton called for the president to appoint an "Emergency Working Group on Foreclosures," led by "a distinguished non-partisan group of economic leaders like Alan Greenspan, Robert Rubin, Paul Volcker." (emphasis added) This "proactive step," she argued, would "help re-establish confidence in our economy." The group's first order of business would be to assess whether and how the government should "buy, restructure and resell underwater mortgages."

Alan Greenspan, former head of the Federal Reserve, is the official most directly responsible for the current crisis. He not only failed to demand and enforce regulation of the shadow banking system at the heart of the credit collapse, but he served as cheerleader in chief for both the housing bubble and the exotic financial innovations that turned the staid home mortgage market into a speculative casino. Bob Rubin, Secretary of the Treasury under Clinton, made financial deregulation his signature, including repeal of the Depression Era Glass-Steagall Act designed to limit the conflicts of interest at the heart of the current debacle. As chief strategist of Citibank, he presumably helped lead that bank into billions of losses in mortgage backed securities. He would have a direct financial interest in the terms of any federal refinancing of home mortgages.

Greenspan and Rubin were once hailed as the Committee to Save the World (TPIP: The group that helped destroy the economies of several SE Asian countries so that multinational corporations would be free to loot them afterwards). Are we now to engage them to save us from the world they helped create?

Hillary isn't alone. John McCain admitted that "The issue of economics is not something I've understood as well as I should." But he said, "I've got Greenspan's book." The Obama's campaign response to Hillary's proposal was to say that he had suggested a similar group last fall, although his economic advisor did caution against having people on the committee with a stake in the outcome.

So there you have it, Hillary's plan to solve this crisis is to take a plan Obama came up with last year, and inject a bunch of McCain's buddies into it. So much for the policy wonk.

Here The American Prospect's Robert Kuttner compared Obama to Hillary in terms of economic understanding and plans:

Barack Obama's speech on the financial crisis was a remarkable breakthrough.

First, he connected all the dots -- between the complete dismantling of financial regulation, the declining economic opportunity and security for ordinary people, the current financial meltdown, and the political influence of Wall Street as the driver of these changes. Astounding! I wish I had written the speech. It is this kind of leadership and truth-telling that is the predicate for the shift in public opinion required to produce legislative change. A radical, appropriately nuanced, and deeply public-minded description of what has occurred, the speech was Roosevelt quality: the president as teacher-in-chief. Those who felt that Obama was capable of real growth that will transcend the campaign's early and somewhat feeble domestic policy proposals should feel vindicated.

The speech also showed real understanding and subtlety in grasping how financial "innovation" had outrun regulation, as well as a historical sense of the abuses of the 1920s repeating themselves. Obama is one of the few mainstream leaders -- Barney Frank is another -- calling for capital requirements to be extended to every category of financial institution that creates credit. This is exactly what's needed to prevent the next meltdown, but if it were put to a vote now, it would be rejected by legislators from both parties because they are still in thrall to market fundamentalism and Wall Street. That's where presidential leadership comes in.

So the speech was courageous, in that it goes well beyond the current Democratic party consensus, and one can only wonder about the reaction of some of Obama's own financial backers. He also took on a couple of other sacred cows, such as electricity and telecom deregulation, proven failures to everyone but industry defenders and their allies in the economics profession.

We should not focus too much attention on the oblique dig at the Clinton presidency, which indeed fomented the pattern of excessive deregulation. Let's remember, Bill was president, she wasn't. This is a totally fair drawing of a distinction on the issues, and not a cheap shot or ad hominem attack.

The Clinton camp's rejoinder -- that Hillary is proposing to do more for the victims of the housing bust -- is totally unpersuasive. All along, she has treated the housing mess as its own self-contained scandal, rather than connecting it to the larger set of financial bubbles of which it is a part. The Frank-Dodd bill, which Obama is co-sponsoring, is a realistic remedy for purely the housing part of the crisis. If you read Clinton's March 24 speech on the housing crisis and how to fix it -- supposedly more robust than Obama's remedy -- she offers the same Frank-Dodd bill. She does not locate the mortgage crisis in the deeper financial one. And her idea of turning, for wise men, to Robert Rubin and Alan Greenspan -- more than anyone the people who gave us this crisis -- is appalling.