Presidential Election 2008
Second debate: Financial crisis

By Alan Shapiro

To the Teacher:

The financial crisis dominated the second debate as audience members raised a number of questions for the candidates. Senators McCain and Obama were faced with a two-minute limit on their answers, even though the questions often called for a detailed, complex response. The student reading below provides excerpts from the debate followed by questions and an exercise in which students might experience a little of the pressure of a two-minute answer to a difficult question.

For background on the financial crisis, see in the high school section of
www.teachablemoment.org the following: "Presidential Election 2008: Financial Crisis" and "Financial Crisis: Bailout or Rescue?"

Student Reading

The financial crisis that began in the United States with a collapsing housing market has become a global crisis. Credit has become very difficult to get and affects everyone from people who need a car loan to Lehman Brothers, a leading investment banking firm, whose debts forced it out of business. Americans have cut back their spending and jobs are disappearing (nearly 760,000 in the past nine months) as businesses contract. People in other countries are facing similar problems.

Senators Barack Obama and John McCain were asked a number of questions about economic issues as they debated on October 7 at Belmont University in Nashville, Tennessee. The format was a town hall type of meeting with the presidential candidates responding to questions from the audience and the moderator, Tom Brokaw of NBC News. A few excerpts:

Audience member: Well, Senators, through this economic crisis, most of the people I know have had a difficult time. And through this bailout package [a financial plan recently passed by Congress], I was wondering what it is that's going to actually help those people out.

McCain: As president of the United States…I would order the secretary of the treasury to immediately buy up the bad home loan mortgages in America and renegotiate…at the diminished value of those homes and let people be able to make…those payments and stay in their homes. Is it expensive? Yes. But we all know, my friends, until we stabilize home values in America, we're never going to start turning around and creating jobs and fixing our economy.…. It's my proposal, it's not Senator Obama's proposal, it's not President Bush's proposal. But I know how to get American working again.

Obama: Let's first of all understand that the biggest problem in this whole process was the deregulation of the financial system. Senator McCain, as recently as March, bragged about the fact that he is a deregulator. On the other hand, two years ago I said that we've got a sub-prime lending crisis that has to be dealt with…..It's going to be important for us to work with homeowners to make sure they can stay in their homes. The [U.S. treasury] secretary already has the power to do that in the rescue package, but it hasn't been exercised yet. And the next president has to make sure that the next treasury secretary is thinking about how to strengthen you as a home buyer, you as a homeowner, and not simply think about bailing out banks on Wall Street.

As the nonpartisan FactCheck.org points out, under the financial plan passed by Congress, Treasury Secretary Paulson already has the power to do what McCain proposed. And Obama had urged Congress to support such a proposal even before the financial plan was passed. However, the newly passed law does not make it clear how this power is to be used.

Another audience question was what each candidate would ask Americans to sacrifice, especially now that there is an economic crisis.

McCain: I'm going to ask the American people to understand that there are some programs we will have to eliminate. We will have to examine every agency and every bureaucracy of government....So we're going to have to tell the American people that spending is going to have to be cut in America. And I recommend a spending freeze that -- except for defense, Veterans Affairs, and some other vital programs, we'll just have to have across-the-board freeze.

Obama: You know, a lot of you remember the tragedy of 9/11 and...how all of the country was ready to come together and make enormous changes to make us not only safer, but to make us a better country and a more unified country.... But one of the opportunities that was missed was, when [President Bush] spoke to the American people, he said, "Go out and shop." That wasn't the kind of call to service that I think the American people were looking for. [Obama went on to call for Americans to rein in their energy consumption.]

For discussion

1. What questions do students have about the reading? How might they be answered?

2. How do you assess the candidates' responses to the home mortgage problem? What problems can you envision if the Treasury Secretary acts on his power to buy up and renegotiate these troubled mortgages? For example, who would decide and how what an individual home buyer would pay to keep his home?

3. What do you know about the "deregulation" problem that Obama refers to? If you need information, how would you find it?

4. How do you assess the candidates' responses to the question about sacrifice? How would you answer that question?

Exercise

During the 90-minute session, audience members and Brokaw asked the candidates other questions about the economy. Will the economy get worse before it gets better? What's the most positive step to help bail people out of the mess they're in? Why should we trust you to solve such problems when both parties bear responsibility for the crisis?

The format of the debate gave each candidate two minutes to answer a common question followed by one minute to debate it further.

Ask for two volunteers to imagine they are in a debate about conditions needing improvement in their school.

Each volunteer has two minutes to answer the following question:

What is the most important problem facing your school, and what would you do about it?

The two volunteers respond to the question.

Now the volunteers have one minute in which to discuss the issue further.

For discussion

1. Ask students to assess the quality of what they heard.

2. What problems, if any, did they note in the debaters' responses?

3. How did each volunteer feel? What problems did he or she experience?

4. Now consider a major public issue--helping people who face foreclosure on their homes because they cannot pay their mortgages. What can you imagine are some of the problems for the candidates in answering a question about this?

5. How do you think the debate format might be improved to give Americans a better basis on which to judge the merits of each candidate?

This lesson was written for TeachableMoment.Org, a project of Morningside Center for Teaching Social Responsibility. We welcome your comments. Please email them to: lmcclure@morningsidecenter.org.

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