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Wall Street Delivers

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Sometimes, the fates deliver.

This past weekend, they delivered a worsening of America's financial crisis, which is the direct result of rightwing economic policies of deregulating Wall Street. Some Democrats colluded in these policies, but their essence was Republican ideology. Under George W. Bush, misguided theories of deregulation were entangled with corruption and incompetence in enforcing the scant regulation that remained. The result was subprime and its spawn.

This weekend, Bush's Treasury Secretary, Hank Paulson, ran out of tricks. He belatedly grasped that even the Federal Reserve and the U.S. Treasury can't socialize all of Wall Street's losses. No bailout for Lehman Brothers, the administration declared, in a high-stakes game of chicken. And nobody stepped forward to buy the venerable firm absent a government guarantee.

It remains to be seen whether these chickens will come home to roost politically. That, of course, is up to Barack Obama.

This morning, he was pretty decent on Good Morning America. His hosts wanted to talk mainly about Sarah Palin and negative advertising, but Obama managed to say that "[w]e are in a very serious time right now," citing Wall Street and the deepening housing crash, and adding, "if you agree with what's happened over the last eight years"--meaning McCain and Palin--"it's pretty hard to represent yourself as an agent of change." He further declared, "you would be hard pressed to explain to me what John McCain's economic vision is about how he's going to get the economy on track."

Not bad, but what's the aversion to connecting the Wall Street meltdown and the Main Street fallout directly to Republican ideology? Incredibly, the campaign sent the press an email this morning containing the line, as a direct quote from Obama:

"Eight years of policies that have shredded consumer protections, loosened oversight and regulation, and encouraged outsized bonuses to CEOs while ignoring middle-class Americans have brought us to the most serious financial crisis since the Great Depression. I certainly don't fault Senator McCain for these problems, but I do fault the economic philosophy he subscribes to."

Dear me, you don't fault Senator McCain? You're running against the man. He voted for these policies. He would continue them as president.

How many more gifts from the gods does the Obama campaign need?

Robert Kuttner, co-editor of The American Prospect and Distinguished Senior Fellow at Demos, has just published Obama's Challenge: America's Economic Crisis and the Power of a Transformative Presidency (Chelsea Green). He is blogging daily about the election and the economic crisis at www.obamaschallenge.com.

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