In dueling speeches yesterday, McCain outthought Barack Obama, thanks to a greater, if still clearly limited, awareness of the realities of the Wall Street meltdown.
McCain went further in identifying the root causes of the current financial crisis and the wider economic slowdown. And, unlike Obama, he touched on some common‐sensical ways to improve the situation and was on firmest footing describing how we got into this mess.
“The financial crisis … started with the corruption and manipulation of our home‐mortgage system,” McCain said in Green Bay, Wis. “At the center of the problem were the lobbyists, politicians and bureaucrats who [persuaded] Congress and the administration to ignore the festering problems at Fannie Mae and Freddie Mac.”
Belatedly, a presidential candidate has hinted at the role Washington played in creating a crisis that has bequeathed taxpayers a trillion‐dollar debt. The push to make every American a homeowner — no matter that a third or more couldn’t afford it long term — has put our financial system in cardiac arrest.
McCain failed to connect the financial dots that made all of this possible. The vast size and scope of the federal government serves as a veritable honey pot, irresistible to an ever‐larger army of lobbyists.
He did, however, outline the positive economic contributions made by the banks, investment firms, mutual funds and insurance companies that comprise the financial‐services industry.
That said, McCain still wants to have it both ways on taxpayer bailouts. He isn’t anti‐bailout on principle, just anti‐bailout by the Federal Reserve.
He was right to say the Fed needs to stop bailing out failed financial institutions and get back to “its core business of responsibly managing our money supply.” But he’s open to Treasury Department bailouts, so long as they follow consistent guidelines.