My Monday column for the FT looks at the implications of the financial crisis for the election, and beyond.
Every four years, despite ample evidence to the contrary, the US celebrates the myth of presidential omnipotence - of the office, at least, if not its occupant. The country is looking for the one man or woman who can do the biggest job in the world, take the 3am phone calls and use those awesome powers to set to rights all that is wrong, from the war on terror to indiscipline in schools, from economic inequality to the state of the roads. It is a cherished illusion. In 2008, the worst financial crisis since the 1930s has shattered it before the new president is even in the job.
The technocrats are in charge - Hank Paulson at the Treasury and Ben Bernanke at the Federal Reserve - and even they are making it up as they go along. President George W. Bush appeared briefly last week, noting that the country was worried about the current financial difficulties and saying, as though this were important information, that he shared those concerns. Wisely, he did not affect to take command of the situation (you thought the collapse of Lehman was a blow to confidence).
Over the weekend, Congress became deeply involved, because the Fed-Treasury plan to take bad assets off the balance sheets of banks and non-bank financial institutions will require congressional action. Even as the issue thus became intensely political, the president was off to the side - and will stay there, even if wheeled in to chair some meetings. What is true of the president is more true of the presidential candidates.
The rescue of Bear Stearns in March should have woken the authorities up to the possible need for a more systematic approach to the subprime meltdown, and it should have persuaded Barack Obama and John McCain to get a grip on the elements of financial regulation so that they could express a view on that matter. But every one acted as though the crisis would blow over, at least until after the election. That is why the Fed and the Treasury are having to put together a complicated and expensive regime for the resolution of bad assets - in the space of hours and under extreme duress. It is why Mr Obama and Mr McCain are obliged to play politics rather than having anything helpful to say.
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