TWO CANDIDATES, TWO RESPONSES TO THE FISCAL CRISIS…. As yesterday wore on, and the seriousness of the situation on Wall Street became more obvious, the political players on both sides started sounding pretty similar, even using identical phrases like “asleep at the switch.”
But as the New York Times’ Jackie Calmes explains today in a very good piece, the prospective differences between an Obama administration and a McCain administration on the fiscal crisis are not only obvious, they’re important.
On the campaign trail on Monday, Mr. McCain, the Republican presidential nominee, struck a populist tone. Speaking in Florida, he said that the economy’s underlying fundamentals remained strong but were being threatened “because of the greed by some based in Wall Street and we have got to fix it.”
But his record on the issue, and the views of those he has always cited as his most influential advisers, suggest that he has never departed in any major way from his party’s embrace of deregulation and relying more on market forces than on the government to exert discipline.
While Mr. McCain has cited the need for additional oversight when it comes to specific situations, like the mortgage problems behind the current shocks on Wall Street, he has consistently characterized himself as fundamentally a deregulator and he has no history prior to the presidential campaign of advocating steps to tighten standards on investment firms.
He has often taken his lead on financial issues from two outspoken advocates of free market approaches, former Senator Phil Gramm and Alan Greenspan, the former Federal Reserve chairman.
Phil Gramm, of course, not only thinks the recession is in our heads, but more importantly, directly deserves a fair amount of the blame for the current crisis itself.
As for McCain, yesterday he sounded like he was prepared to reinvent himself yet again in response to the market mess, but rhetoric aside, there’s still that reality to deal with. As Calmes’ piece noted, McCain “promoted a moratorium on federal regulations of all kinds” after Republicans claimed the congressional majority in 1995. More recently, McCain boasted to the Wall Street Journal in March, “I’m always for less regulation.” He noted that some saw the need for more oversight in situations like the subprime lending crisis, but, McCain said, “I am fundamentally a deregulator.”
McCain, in other words, strongly approves of the mistakes that helped create this mess, and wants to offer Americans more of it.
It is, of course, madness. It’s also precisely why the McCain campaign is so desperate to talk about lipstick, arugula, tire gauges, celebrities, and sex-ed for kindergarteners. If voters stopped to take a look at McCain’s record and policy agenda, he’d lose.
