The Financial Crackup of 2008

THE LOSS OF more than $1 trillion from pension plans, 401(k)'s and college funds in the stock-market crash of the past week gives new meaning to the concept of "Homeland Security."

Our homes and our lifestyles and the legacies we leave to our children are endangered more now than at any time since the Great Depression.

Unlike John McCain, who wants to appoint a new 9/11-style commission to gather evidence, we know how our financial defenses were breached - because this wasn't a sneak attack.

People on Wall Street and in Washington and their friends in the media may not have noticed what was happening until Lehman Brothers went belly up, Merrill Lynch disappeared and U.S. taxpayers became the reluctant owners of AIG. People at ground level in our economy already knew they were under siege. The money coming in stayed flat, but the money going out kept going up and up.

Yet, as the financial dominoes started falling over the past several months, this Big Election was mired in small things. We were more interested in pondering the meanings of "fist bumps" than in looking closely at the financial manipulations that created the bubbles - dot.com, housing - that now have burst all over us.

Just last week, McCain's campaign manager sneered at the idea that this election should be about issues. What a difference a financial near-death experience makes.

This week, McCain - as if suiting up for a bombing mission - vowed to stop Wall Street abuses and, we quote, "put an end to greed!"

Pride and covetousness come next.

The fact is, as Gordon Gecko famously said, "Greed is good." Greed for more and more fuels the market. The key is to establish rules that harness the desire for wealth - what some people call greed - so that it pulls us all along, and doesn't leave most of us behind in the dust.

And that's what those in power failed to do.

In the past few days, John McCain has transformed himself from being a "foot soldier in the (anti-regulatory) Reagan Revolution" to taking aim against Wall Street "fat cats" as if they were Mahmoud Ahmadinejad.

If it was Tuesday, he was against bailing out AIG; if it was Wednesday, he was all for it. As the markets melted down, so apparently did McCain.

In huge contrast, Barack Obama has consistently called for common-sense regulation of financial markets, even when no one was paying attention.

Last March, during the government bailout of Bear Stearns, Obama gave a speech at Cooper Union in New York in which he talked about the economic downturn and how it came about, blaming not only Republicans but Democrats for dismantling the protections put in place after the Great Depression. Obama laid out plans for creating a new regulatory structure for a financial marketplace that has been transformed by technology and globalization.

(If you want to catch up, go to go.philly.com/ cooperunion. You may not agree with Obama's plan, but at least he has one.)

The stock market bounced up 450 points yesterday on hopes of a recovery, but the wild fluctuations made for more anxiety, and sharpened our focus on what's at stake Nov. 4.

It shouldn't have taken a Wall Street collapse to turn our attention from Obama's vacation destination or McCain's preferences in footwear. But it has and not a moment too soon. There still is time to look at the candidates' plans for dealing with health care, loose nukes, and the threats to constitutional freedoms - the really Big Things facing this nation and the next president. *