Nowadays, Americans are bombarded with opinion polls on the current presidential election. If these polls are to be believed, the country is loudly divided over whom it wants to see win the White House in November. But there’s one part of the country where the political split is firmly to the right Wall Street.
Generally, the financial industry and the stock market prefer a Republican administration. Republicans are considered business friendly, keeping corporate taxes low and downsizing government. The financial services industry is the biggest source of campaign funding, with individuals and corporate Political Action Committees (PACs) shelling out millions -- $10 million to the 08’ McCain campaign.
Over the last weeks, a calamity was occurring in the financial world. But the mayhem had taken back seat to nonsense about Sarah Palin’s family dynamics and other unimportant matters. Unfortunately, it took total chaos to break out on Wall Street to bring consumer concerns – the dying economy – back to the forefront.
The presidential candidates definitely recognize the change. In less than 24 hours after the sting on Wall Street, Barack Obama and John McCain delivered statements and new ads on the disastrous financial sector. As the American financial system absorbed one of its biggest shocks in generations, Senator McCain said, as he had many times before, that he believed that the fundamentals of the economy were “strong.”
No doubt the nation’s economy is suffering hard. Even in what was once the fastest-growing city in America, Las Vegas, the chips are down. The city has seen a significant drop in its gaming revenue and a 10.4 percent fall in the number of conventions held. Stocks are down in big name hotels like the Bellagio and the Mirage. In recent weeks, MGM eliminated 440 middle management jobs, adding to the 650,000 plus number of unemployed Americans since January.
The crash of the economy is having a large psychological effect on consumers already struggling to maintain any optimism about the country and its future. The public’s ratings of the national economy continue to sour, with assessments deteriorating faster than the daily polling. Views on the Iraq war have also turned negative, with six in 10 now rejecting the notion that the U.S. needs to win there to effectively battle terrorism. The cost of the war has reached $12 billion a month.
Nobel Prize-winning economist, Joseph Stiglitz, reports the current financial crisis is triple the “burn” rate of its earliest years.