And unlike the Japanese crisis of the 1990s, America's dominant place in the world economy increases the likely worldwide effect of our crisis and recession. For example, the subprime mortgage crisis has been exported to the world already because the world has bought those assets, but the world never bought much Japanese real estate mortgage assets in the '80s and '90s. Further adding to the high risk of economic contraction, of course, is the sharp and continuing rise in oil prices.
Of course, we may get lucky. Perhaps the financial institutions will weather the current storm. Perhaps the dollar will bottom out soon. Perhaps the economy will slow down but not contract. But so far, the Fed's repeated interventions have not solved the lack of liquidity. So far, the markets around the world are betting against good news. And there is talk that the massive Fannie Mae and Freddie Mac real estate corporations may have liquidity problems.
So with all this warning, we should expect the presidential candidates to explain in detail how they would deal with this crisis. After all, in 10 months, one of them -- either McCain, Obama or Clinton -- will be president and quite likely will be facing one of the worst financial and economic conditions of recent decades. Instead, we get yet more discussion on who is for hope, who has experience, and who is better able to answer the phone at 3 a.m.
Why not have a novel three-way debate on one of the networks for two hours and see what the three great minds who would be president have to say about what they would do if the likely turns out to happen? I don't have an answer, but I have the first question for them.
Since World War I, economic historians divide the world's financial history into three parts: interwar (1919-1939); the Bretton Woods period (1945-1971); and the present period. In reaction to the Great Depression of the interwar period, Bretton Woods provided strict regulations of financial institutions. As a result, there were few financial crises. Then we liberalized and deregulated during the present period and have had several deep crises.
Questions for the candidates: In 2009, should we re-regulate or not? And should we try to ease the pain of the crisis if it comes or let natural economic forces clear out the dry rot and find the natural bottom? No points for slogans. Extra credit for honest, thoughtful responses.
Or we continue with Obama's people suggesting Hillary is a monster and her people suggesting Obama is a Muslim (and McCain off in the margin somewhere).
Blankley, who had been suffering from stomach cancer, died Saturday night at Sibley Memorial Hospital in Washington, his wife, Lynda Davis, said Sunday.
In his long career as a political operative and pundit, his most visible role was as a spokesman for and adviser to Gingrich from 1990 to 1997. Gingrich became House Speaker when Republicans took control of the U.S. House of Representatives following the 1994 midterm elections.