Worst. Week. Ever.
The Dow Jones Industrial Average had its most volatile day ever Friday, oscillating more than 1,000 points before ending up 128 points down, capping the worst week in the Dow's 112-year history. The index lost 18.2 percent of its value between the opening bell Monday and closing bell Friday. Amid the panic, some very somber discussions are being held and all the papers lead with some kind of reaction to the bad news.
The Washington Post leads with Treasury Secretary Henry Paulson and the finance ministers from six other wealthy nations vowing to take "all necessary steps" to deal with the burgeoning financial crisis. The Los Angeles Times leads (at least online) with Paulson coming out of that meeting and saying the U.S. government would buy nonvoting stakes in financial institutions, as part of an ongoing attempt to restore market liquidity. The New York Times leads with a double billing of the i nternational cooperation announcement and word of possible merger talks between General Motors and Chrysler. The Wall Street Journal devotes the top half of its front page to summing up Friday's manic market activity; it tops its world-wide newsbox with both presidential candidates issuing new economic proposals in light of the crisis.
Paulson said the money the government would invest in banks would be part of the $700 billion bailout that passed Congress earlier this month. The LAT says the move was widely hailed by economists as being a better idea than simply buying up bad mortgages. The WP says the plan could be seen as a recanting of the government's decision to allow Lehman Brothers to fail last month. The NYT emphasizes that while the nations have agreed to some broad principles for rescuing the financial sector, the agreement is purposefully vague about what these nationals will actually do. The paper adds that a British proposal providing for coordinated guarantees of lending between banks was rejected.
Amid the chaos, it was revealed that General Motors and Chrysler are in tentative talks about a possible merger. Both companies have been hurt by rising gas prices, falling consumer spending, and tightening credit. GM has been burning through its cash reserves at the rate of about $1 billion a month. If the two companies combined, the resulting manufacturer would be America's largest automaker and could even rival Toyota Motor Company in size. The NYT's reporting is a little opaque—neither party is officially willing to discuss the talks yet—but the piece makes it very clear that the deal is still in its delicate, early stages. The WSJ goes so far as to say the talks are on ice right now because of the faltering economy. The NYT says that if the deal with GM doesn't happen, Chrysler's owners will most likely try to merge with a foreign car company.
The WP fronts a different look at the global crisis, focusing on nonprofits that used to rely on the largess of people who made their living on Wall Street. Private groups and individuals sent more aid abroad than the U.S. government last year, but now many charitable organizations are bracing for a change of fortune in the year ahead.
The WP looks at Japan's "lost decade" of economic growth during the 1990s, searching for clues as to how a recession in the U.S. might pan out. The paper's analysis is that conditions in Japan seemed much worse than they actually were and aspects of the country actually flourished during the downturn—so maybe things here in America won't be so bad. Not the most reassuring article ever, but TP will take what it can get.
An Alaskan legislative investigator concluded that Gov. Sarah Palin abused her power when she pressured officials to fire a state trooper who happened to be her former brother-in-law, according to the NYT. The WP is quick to point out, however, that the same report also finds that Palin acted appropriately when she fired Public Safety Commissioner Walter Monegan, even though she did so in part because he refused to fire the trooper. The NYT says that in any case, the report is something of a mcguffin from a legal stand point, since the Republican-led legislature is unlikely to censure Palin or take any other disciplinary action.
The Connecticut Supreme Court ruled that homosexuals have a constitutional right to marry, reports the NYT. Friday's 4-3 decision struck down the state's civil-union law, finding that it violated the Constitution's equal protection clause. The majority opinion argued, in somewhat poetic language, that attempts to create a separate class of unions for gay citizens were akin to laws that "relegated blacks to separate but supposedly equal public facilities." The ruling will take effect Oct. 28, and the state's governor has said the state will not contest it any further, meaning that Connecticut will begin issuing marriage licenses on that day.
Under the fold, the NYT writes that the Chinese government will soon allow farmers to sell land-use rights, amounting to the nation's biggest economic overhaul in years. The hope is that the change will infuse rural areas with capital while at the same time increasing farm productivity.
A few weeks ago the WP declared the McCain/Palin ticket had forever altered presidential campaigning by making it a two-person affair. Gone were the days of running mates splitting up to cover more ground: Palin was being used for crossover appeal with working-class independent voters and McCain liked "having Palin along," the paper said at the time. That's all over now. The WP is now reporting that since her debate performance earlier this month, Palin has taken on a more traditional role in the campaign. The paper now says she travels independently of McCain, speaks chiefly to heavily partisan crowds and lards her speeches with direct attacks against her opponents— just like every other VP nominee ever.
Jesse Stanchak is a writer living in Washington, D.C.