Fellow Democrats,
while it is tempting to blame a giant conspiracy of wealthy bankers and politicians for the mess that Wall Street is today, we must remain focused on facts and keep our dialogue and actions aimed at what can be fixed, not on broader injustices around the haves and have-nots.
There will always be financial markets. There will always be those who have more and those who have less. The world's financial markets have matured and become more sophisticated through trading systems and financial derivatives products. The result is that risk management became so complex and interwoven, across national boundaries and industries, currencies and commodities, and driven by so many variables that it was almost impossible to measure cause and effect except in hindsight.
Let us guard against populist political rhetoric at this critical point in history. The effect of not addressing the financial markets' ailments will be detrimental to all of us. From teachers and government workers to construction workers and factory workers, to investors and stockbrokers to lawyers.
The cost of the bailout may well reach the $700 Bn ceiling set by the banking committee. Funded by taxpayers. The blame may well go in part to incompetent CEOs at Wall Street's illustrious institutions. But crucifying a few CEOs will benefit nobody. Nor will a populist movement to cap CEO salaries. What will address the problem and prevent future meltdown is an intelligent governing body that implements realistic measures and checkpoints on an industry that is by nature risk-driven and uncertain.
Quantifying risk and providing transparency to investors of all kinds, will provide better assurance that money markets are self-aware and fly by instruments, not by feel.
However, financial markets will never be 100% safe. Let's accept that and move to patch the crisis we're experiencing, conscious that investing is risky.
McCain's suggestion that Obama has close connections with Fannie Mae and Freddie Mac is ridiculous and betrays more a panicked GOP candidate than an intelligent argument about fiscal policy.
Obama's campaign must remain with the facts: financial markets sometimes underperform and it hurts us all. Punishing the captains doesn't fix anything. Regulating the markets, without strangling them, is a way forward.
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