Economy is election-year test

Inter Lake editorial

Well, what do you think?

Is America's economy fundamentally "strong," as John McCain said Monday, or is it "a mess," as described by Barack Obama on Tuesday.

You could make a case either way, and indeed it would be somewhat reassuring if our presidential candidates could at least agree on the nature of the challenges we face, if not the solutions.

Instead, it seems like they are more intent on playing "gotcha" over sound bites and generalities instead of delving into the lending practices and regulatory omissions that resulted in a crisis that has so far affected Bear Stearns, Fannie Mae, Freddie Mac, Merrill Lynch, American International Group and Lehman Brothers, along with millions of individual stockholders.

McCain certainly seems more presidential in his insistence not to sell the American economy short. It doesn't do anyone any good if our leaders act like we are in a tailspin, since a large part of economic performance is "perception." As long as people don't lose faith in their investments, most of them will weather the storm.

However, it does little good for someone of McCain's stature to say the problem is all due to "greed and corruption," and his idea for a commission to study the problem and come up with answers is, frankly, no help at all. In times of crisis, we need a president who can figure things out on his own, not one who is waiting for someone to tell him what to do.

Obama says he is that man, but so far all he has done is tell us he will provide the necessary leadership, without yet demonstrating it. It would help if the next president has faith in the free-market system that has made our country great.

Don't make any mistake about it. There are problems in the economy, but they don't have to reach across the board. It appears investors share that hope, too, as stock markets rebounded Tuesday on news that the Fed would not be cutting interest rates as an artificial fix. The Dow rose 141.51 after plunging 504 points the day before, the largest daily decline since the September 11 attacks. It seems doubtful that would happen unless many investors shared McCain's belief that "the fundamentals of our economy are strong."

What needs to be determined now is: What will our next president do to prevent these financial misdeeds from occurring again? There's no way to take risk out of business, but there should be a way to keep major financial institutions from playing Keno with investors' money - without relying on the federal government (that means all of us taxpayers) to swoop in as a savior.

Pay attention to what the candidates are saying, and look at what they are proposing. It's ultimately up to us to choose a leader who will make the situation better, not worse.