Fire Christopher Cox?

FIRE CHRISTOPHER COX?…. John McCain has apparently decided he has to say something different and/or unique about the crisis on Wall Street, so he’s come up with a new line: he wants to see Securities and Exchange Commission Chairman Christopher Cox fired.

“The chairman of the SEC serves at the appointment of the president and has betrayed the public’s trust. If I were president today, I would fire him,” McCain says, according to excerpts for a speech on reforming the ailing U.S. financial markets he will deliver today in Cedar Rapids, Iowa.

“The primary regulator of Wall Street, the Securities and Exchange Commission (SEC) kept in place trading rules that let speculators and hedge funds turn our markets into a casino,” McCain says.”They allowed naked short selling — which simply means that you can sell stock without ever owning it. They eliminated last year the uptick rule that has protected investors for 70 years. Speculators pounded the shares of even good companies into the ground.”

I suppose this shameless grandstanding is preferable, at least politically, to explaining why the fundamentals of the economy are “strong” and why McCain was against the AIG bailout before he was for it, but only marginally.

First, the president cannot fire an SEC chair. It’s procedurally impossible. As ABC News reported, “[W]hile the president appoints and the Senate confirms the SEC chair, a commissioner of an independent regulatory commissions cannot be removed by the president.” That seems like the kind of thing McCain ought to know before spouting off on the subject.

Second, the SEC did allow all kinds of short selling, but that’s legal under the federal regulatory system that John McCain — and his advisor, Phil Gramm — helped put in place. After more than a quarter of a century in Congress, has McCain ever proposed changing these laws and imposing stricter regulations? No. Has he ever, before today, criticized Cox’s oversight of existing trading rules? Not as far as I can tell.

Third, I’m not an expert, but I’m fairly certain short selling is not the underlying cause of the current crisis. The sub-prime mortgage fiasco and over-leveraged banks are. If McCain wants to make a case for firing Cox, he should at least get the cause right.