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Political Fallout of Crisis on Wall Street

El Diario/La Prensa, Editorial, Staff Posted: Sep 16, 2008

Editor's Note: The Dow Jones industrial average fell 504.48 points, or 4.4 percent, Monday in the biggest decline since Sept. 17, 2001 the day the index reopened after the 9/11 terrorist attacks when it fell 7 percent, or 684.81 points. Analysts point to worries over the bankruptcy of Lehman Brothers and the sale of Merrill Lynch over the weekend. For editors of Spanish-language newspaper El Diario/La Prensa, the drop was a warning that Americans need to take political action.

NEW YORK -- Both presidential candidates addressed the fiasco on Wall Street. Senator John McCain talked about the greed of Wall Street, while Senator Barack Obama pointed to the poor policy of an economy based on the crumbs falling from the table of the rich.

But with the president referring to the economic problems as in need of mere "adjustments," the nation is eager for a new government to take the reins.

While the bankruptcy of Lehman Brothers was shocking, it is part of the crisis in the sector for housing mortgages. Mortgage giants Fannie Mae and Freddie Mac were recently rescued from bankruptcy by the federal government. Earlier this year, the government also endorsed JP Morgan's purchase of the firm Bear Stearns.

Part of the problem is that brokers went for what would benefit them in the short-term. Taxpayers, who fund these bailouts, and workers, who feel them through the loss of their jobs, are now paying for this recklessness.

And there's more bad news. The company AIG is also having problems and Merrill Lynch is expecting more layoffs.

Even worse, the fundamental problem is how these companies are being allowed to conduct business.

The rapid concentration of wealth in the hands of a few, with some leftover crumbs for the masses of workers, is not a sign of a phase in the evolution economy.

Analysts say we need a series of urgent measures, including tax aid to the states. But moving from crisis response to prevention will depend on whether Americans know exploit their influence - organizing politically and voting - to achieve real reform.

Related Articles:

Its Still the Economy, Stupid!

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