One of the reasons that Barack Obama won the 2008 election, you’ll recall, was the fact that he seemed like he had a better understanding of the financial crisis.
John McCain, on the other hand, seemed out of touch.
Old news, it seems, until you get into the details of how vastly different the thinking in their respective camps really was.
You’ll find those details in a new book we’ve been reading here at Clusterstock called ‘The New New Deal: The Hidden Story of Change in the Obama Era’, by Time Magazine editor Michael Grunwald.
Just before the fall of Lehman Brothers, Grunwald reports, the McCain campaign wasn’t listening to anybody — and by anybody we mean not even Moody’s economist Mark Zandi — about the dark direction the global economy was taking.
From the book:
McCain’s campaign cochairman, former Texas senator Phil Gramm, declared America was merely in a ‘mental recession’ ginned up by ‘a nation of whiners,’ and though he vanished from public view…his complaint that the media were overhyping bad economic news reflected the campaign’s thinking. ‘It was my job to watch the data, and I kept telling the other economists advising McCain that things were unravelling,’ Moody’s Mark Zandi recalls. “They just didn’t buy it.”
Obama took the absolute opposite track. He was constantly listening to whispers on Wall Street and while sources were hashing out the gory details of how Bank of America was swallowing Merrill Lynch, they were also warning him about another threat on the horizon.
“Barack told us: ‘By tomorrow, the world will probably have changed,’ recalls Anita Dunn, another (Obama) strategist. “We were all like: Okaaaaaay.”
The next day Lehman Brothers was no more.