Both Democratic contenders jumped today on the latest indicator of economic trouble -- the fire-sale buy-out of venerable investment firm Bear Stearns -- to say that it proves their point that mortgage industry problems are spilling onto Wall Street, and to warn that Main Street is feeling the pain, too.
"The news coming from Wall Street today has confirmed our fears that the financial fallout from the mortgage crisis would spillover into the wider economy," Barack Obama said in a statement issued by his campaign. "Months ago, I went to Wall Street and said that our capital markets could not function without the confidence and trust of the public. I said that Wall Street could not succeed while the rest of America struggled. Now, as the Federal Reserve does its best to bring stability to the market, we must focus on what we can do to restore the publicís confidence in the market and help the millions of Americans who are worried about their jobs, their homes, and their financial future."
Obama also criticized President Bush, saying that "History will not judge President Bush kindly for his failure to act in a way that couldíve prevented or alleviated this economic crisis.
"There have been few administrations so out of touch with the concerns and the struggles of working Americans and so beholden to the lobbyists and special interests who blocked any kind of regulatory oversight of the financial sector," Obama continued in a statement. "Whether it was subprime lending, credit cards, or bankruptcy laws, Washington has allowed these special interests to prevent sensible policy that could have prevented the most serious effects of the current predicament."
Hillary Clinton weighed in as well, saying, ďThis is a moment of great unique uncertainty in our financial markets. The crisis that began in the subprime mortgage market has spilled over and now poses a broader threat.
"As a senator from New York, I am keenly focused on the impact of these market developments on the lives and livelihoods of thousands of New Yorkers and on the New York economy as a whole," Clinton continued in a statement. "I am also reminded every day as I meet with families and listen to their stories that the effective function of our market isnít just about Wall Street, it is about Main Street. Itís about the families I meet that are struggling to fend off foreclosures and stay in their homes. Itís about construction workers who used to build houses and are now out of work. Itís about the college student who has good credit but is struggling to get a loan. What is happening on Wall Street may well affect the lives and fortunes of tens of millions of Americans who work hard everyday. Theyíve done nothing wrong, but they will be impacted."
Republican John McCain's campaign issued a shorter statement, praising the Federal Reserve for helping shore up the financial sector and broker the sale of Bear Stearns.
"Senator McCain has complete confidence in Chairman Bernanke and the actions of the Federal Reserve, and is committed to ensuring the economy continues to grow Ė because no government program or policy is a substitute for a good job," senior policy adviser Doug Holtz-Eakin said in a statement. "John McCain understands the federal governmentís responsibility to ensure the stability of the US financial system, and is equally committed to protecting the pocketbooks of hardworking American families."
Polls show that the economy has far surpassed the Iraq war as the top concern for voters heading into the general election campaign.