As a crisis rocks Wall Street, McCain rolls out new positions

John McCain at a rally in Vienna, Ohio, this week: He blames greedy and careless captains of Wall Street for the current financial mess.
REUTERS/Aaron Josefczyk
John McCain at a rally in Vienna, Ohio, this week: He blames greedy and careless captains of Wall Street for the current financial mess.

For anyone who has followed politics over the last 30 years these are confusing days. To see the Republican candidate for president in a spitting uproar against the greedy and careless captains of Wall Street, to witness his verbal lynching Thursday of the chairman of the Securities and Exchange Commission and his plea for more government regulation of the financial sector, well, it’s more than a little disorienting.

It’s as if the Democrats suddenly embraced the pro-life movement or decided that the Iraq war was a good idea after all.

John McCain’s turnabout recalls Richard Nixon’s overture to China in the 1970s and Bill Clinton’s reform of welfare in the 1990s, except that McCain’s one-eighty seems a more drastic repudiation of core principle.

“I have a long voting record in support of deregulation,” McCain told the Associated Press in 2003. “I am a deregulator … I believe in deregulation,” he told CNN. And earlier this year, as if in a prelude to the Wall Street Meltdown, he insisted on PBS that “we need less government [and] less regulation” and that “I’m always for less regulation.”

It wasn’t only regulation in the abstract that McCain opposed, but regulation of the financial markets. His dubious “membership” in the Keating Five, which worked against regulation of the savings and loan industry in the 1980s, contributed to the industry’s collapse and a taxpayers’ bailout that exceeded $500 billion. McCain’s close tie to Phil Gramm, the former senator and a key architect of financial deregulation, further implicates him.

High agitation
And so the question is whether voters see the candidate’s amazing conversion as authentic or opportunistic. Has he really renounced the doctrine of Milton Friedman and Ronald Reagan, the one about the sanctity of unfettered markets? Or is he doing his Teddy Roosevelt impersonation just for the sake of expediency?

And if McCain is sincere, if he really thinks his Wall Street friends turned the markets into casinos, if he really wants SEC Chairman Christopher Cox fired, does that signal a true shift of the Republican Party away from Reagan and back toward the center?

Three liberal commentators, each writing in the Huffington Post, were in high agitation on those questions.

“He must think we’re a nation of village idiots,” James Moore wrote. “Conservative Republicans always want the government to stay out of business and avoid regulation as long as they are making lots of money. When their greed, however, gets them into a fix, they are the first to cry out for rules and laws and taxpayer money to bail out their businesses. Obviously, Republicans are socialists. The Bush administration has decided to socialize the debt of the big Wall Street firms. Taxpayers didn’t get to enjoy any of the big money profits on the phony financial instruments like derivatives or bundled sub-prime paper, but we get the privilege of paying for their debt and failures.

“These, then, are the people — the Republicans — who want to run our government for four more years,” Moore concluded. “John McCain isn’t just one of them. He rides their jets. He takes their campaign donations. He makes them his campaign advisors. And he tells us to trust him.”

Joseph Palermo wrote about McCain”s turnabout: “Everybody knows that what is needed is exactly the opposite from what we’ve had for the past three decades. Instead of a government that is asleep at the switch and filled with cronies and hacks from the industries that are supposed to be subject to oversight, we need an activist state that rebuilds the firewalls between the commercial and investment banks; we need a ‘re-regulation’ of the economy, especially key sectors that the entire nation depends on — finance, energy, health care, food, etc. In short, what we need is [oversight] that can strike fear in the hearts of these captains of industry.

“Today, we have the worst of both worlds (laissez-faire and regulation). Government bailouts for the rich — naked capitalism for everybody else. This whole mess could have been avoided if the generation that followed the New Deal had the common sense and decency to understand that you cannot turn over capitalism to the capitalists. Greedy individuals will always figure out clever new way to make their own piles of money at the expense of their fellow citizens and at the expense of the nation’s well-being. Whether it’s the savings and loan scandal of the 1980s or the bubble of the 1990s or the Enron collapse or the mortgage meltdown — it’s always the same old story. They pass on the wreckage to the taxpayer as they always do. It’s time to put to rest once and for all the Big Lie that deregulation and privatization of government institutions will bring the nation anything other than calamity after calamity.”

David Sirota was more even-handed. “Both Obama and McCain have taken huge sums of cash from the industries that caused this crisis,” he wrote. “Both Obama and McCain continue to rely on Wall Streeters who engineered the meltdown as their top economic advisers (though only McCain employs lobbyists intimately involved in the crisis).”

Conservatives’ views
Conservative political sites tended not to dwell on the Wall Street issue.

The Weekly Standard didn’t mention it, preferring a story on “the passion of Dick Cheney” and a piece called “Loosing It: Democrats despair as Obama campaign falters.” Michael Weiss wrote about “self-pity in Democratic circles now that the prospect of an Obama administration may not be the certainty it seemed only weeks ago.”

Fox News focused largely on Sean Hannity’s long interview with Sarah Palin. When Newt Gingrich asked Hannity for his assessment, the best he could muster was to say she’s “authentic.”

Rush Limbaugh did weigh in on how “Democrat thieves looted Fannie Mae and Freddie Mac.” Said Limbaugh: “The McCain camp is accusing Obama of cheering on this discord on Wall Street, cheering on the financial mess, trying to actually make it worse, trying to make people feel more upset — of course, what’s hard to understand about that? They want you suffering; they want you in panic; they want you hurting, ladies and gentlemen. That’s the nature of liberalism.

“And they asked Obama, ‘What do you think about the AIG bailout?’ He didn’t have a word to say about it. He had no comment on it. McCain’s out there right now speaking someplace in Iowa, proposing some commission, the mortgage financial institution trust that would work with the private sector in identifying areas here that need to be looked at and so forth and so on. They asked Obama about this, he has nothing to say, he has no answer what so ever.”

But the Wall Street Journal’s editorial page worried about slippage in the GOP campaign. “Rather than be dragged into the path of the financial story, the McCain campaign especially needs to refocus on its post-convention momentum,” wrote Daniel Henninger. “It needs to worry about wasting the political capital Gov. Sarah Palin deposited in the Bank of McCain three weeks ago.

“Once Mr. McCain picked Mrs. Palin as his running mate, he demoted ‘experience’ and elevated a government ‘reform’ message,” Henninger continued. “It was the right thing to do. Presidential voters are ambivalent about Beltway-marinated senators like Mr. McCain and Joe Biden. John McCain’s edge is his famous reputation as a reform maverick. So far through, he is not casting his reform message in large enough terms … Voter disgust with Washington goes well beyond George W. Bush … The fall, the malfeasance, is deeper. It’s bipartisan. It’s epidemic.”

Obama, meanwhile, was meeting with his economic team in Florida this morning and is expected  to roll out his response to the deepening economic crisis. And polls suggested that Obama has stabilized his campaign after two weeks of McCain-Palin headlines.

The New York Times/CBS poll found that “despite an intense effort to distance himself from the way his party has done business in Washington, Sen. John McCain is seen by voters as far less likely to bring change to Washington than Sen. Barack Obama. He is widely viewed as a ‘typical Republican’  who would continue or expand President Bush’s policies.” The poll found Obama leading in the national race, 48-43 percent, a statistically insignificant edge. But it also showed that, while Palin has excited the GOP base, she has not expanded the ticket’s support among independents and wayward Democrats. More than 60 percent of respondents said they would be concerned if McCain, 72, could not finish his term and Palin had to take over.

On the matter of McCain’s ability to deliver change, respondents said that by 57-40 percent they consider him a typical Republican, rather than the maverick reformer he claims to be.

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