It seems Senator Obama is somewhat overjoyed at the recent downturn in the stock market.  It has taken the focus off of the Senator McCain’s selection of a running mate and it has allowed him to put the blame of the financial problems on President Bush and in turn on Senator McCain. 

 
One attack was the comments by Senator McCain that the fundamentals of the economy were sound.  Senator McCain is correct; the fundamentals of the economy are fine.  GDP grew by 3.3% in the second quarter of 2008.  In fact, in the second quarter the United States produced more goods and services in a three month period than at any time in the history of civilization.  Unemployment is low by historic standards.  Data released today by the Bureau of Economic Analysis showed personal income rose 1.8% in the second quarter of 2008—to an all-time high of $12.1 trillion.  Oil prices are down over 30% since the all-time high back in July.  In addition, economists have a good understanding of what deepened the Great Depression—the Federal Reserve restricted credit as banks failed.  This past week the Fed has made every effort to make credit available to the financial system.

Senator Obama has blamed the Republicans for the current crisis in the financial markets.  Yet is this true?  The blog Hotair.com has a very good posting where it has quotes by Senator McCain from three years ago calling for reform of Fannie Mae and Freddie Mac.  President Bush recommended legislation to this effect but was opposed by the Democrats.  The reason is they feared additional regulations would make it harder for low-income Americans to get mortgages.  I wonder if there are any tapes of Senator Obama making the same argument?

I am amazed at Senator Obama’s gumption to blame the Republicans on the demise of Fannie Mae, Freddie Mac, and AIG.  The website opensecrets.org lists the campaign contributions each member of Congress received from Fannie Mae and Freddie Mac between 1989 and 2008.  Number two on the list is Barack Obama—even though he has only been in the Senate since 2005.  In addition, former Fannie Mae executives Franklin Raines and Jim Johnston were advisors to Senator Obama’s presidential campaign. 

Hopefully Senator McCain over the coming weeks will develop campaign commercials to highlight the fact he had called for regulations years ago and it was the Democrats who prevented it from happening.