Hanson on McCain: Wall Street Morality Tale

Historian Victor Davis Hanson is about a zillion times smarter than me and most folks and has the first analysis I found on the McCain speech. Here's his entire post from the Corner at NRO.

Wall Street Morality Tale

I think McCain, so far better than Obama, is trying to put the meltdown in human terms as analysts, economists and financiers are sorting out the financial mess. This week and next the campaign boils down to whether the voters believe the Obama generic message that Republican free-market philosophies fostered a culture of excess and proverbial "Wall Street greed," or McCain's more specific responses that many of the necessary regulatory firebreaks were removed by the Clinton administration, and not reinstated by the Bush administration — and that many of the compliant Democratic senatorial class, Obama himself among them, were well rewarded in turn with donations from hedge-funders and speculators.

That said, McCain, as a Republican free-market advocate who will be tarred for the mess, has the burden of getting out in front and grounding his message in specific human terms that explains why this is so bad, and the ethical story of who got hurt and why.

What we are seeing is that billions, no trillions, of speculation debt is being called in, and those who must pay for it in the end are mostly retirees who will get almost nothing in interest on their passbook and T-bill accounts at precisely the time they retire and are vulnerable, on the working and professional classes who contribute each month to their retirement 401K mutual funds and have seen tens of thousands wiped away in a few days, and are told they are lucky to have anything at all in those accounts, and those who must borrow for college, housing, and transportation and will find it hard to get a loan, in an Orwellian banking market in which interest paid out by banks—themselves cash strapped from bad investments— to depositors declines while interest charged to borrowers increases. The common theme is the hard-working American who tried to save is being punished by those who used his set-asides to unduly enrich themselves, aided by revolving-door politicians who now wanted cash donations from, and later good jobs on, Wall Street.

Who then were the beneficiaries? Many in the management and investor class that earlier saw the dangers of what they were doing, and so partially cashed out to the tune of hundreds of billions of dollars the last few years, little worried about the reputation of Wall Street after losing someone else's money, housing speculators and the unqualified borrower who simply walked away from unsound debt, arguing the home was overpriced anyway and why keep paying for something not worth the value of the debt?, and lending agencies and investment firms who made a killing on crass speculation the last 6-7 years, and, when the game was up, got the government to bail them and keep them afloat.

Like it or not, the current mess is morality tale, and the candidate who can best convey that without crass demagoguing, will best handle the issue.