McCain: Wall Street woes point to regulation need

Discussion in 'Politics' started by walter4, Sep 15, 2008.

  1. By GLEN JOHNSON – 3 hours ago

    JACKSONVILLE, Fla. (AP) — Republican presidential candidate John McCain said Monday he still believes the fundamentals of the nation's economy are strong even as the uncertain fate of two of Wall Street's oldest institutions sent stocks tumbling.

    In remarks to a crowd of several thousand in this pivotal electoral state, the Arizona senator said he agreed there should be no taxpayer-financed bailout of Lehman Brothers even as the investment banking giant filed for bankruptcy. Meanwhile, Merrill Lynch was selling itself to Bank of America for less than half of the iconic brokerage firm's recent value.

    Reacting to the turmoil on Wall Street, the Dow dropped some 300 points.

    "Our economy, I believe, still, the fundamentals of our economy are strong, but these are very, very difficult times, so I promise you: We will never put America in this position again. We will clean up Wall Street," McCain said.

    He added: "The McCain-Palin administration will replace an outdated, patchwork quilt of regulatory oversight and bring transparency and accountability to Wall Street. We will have transparency and accountability and we will reform the regulatory bodies of government."

    In a brief interview, McCain was questioned about the economic woes under eight years of President Bush and six years of GOP control of Congress.

    "I think it's a failure of government and I think it's a failure of regulatory agencies," McCain told reporters.

    "I would point out that the Democrats have been in control of Congress for the last two years — both houses, so I think there's plenty of blame to go around."

    The GOP nominee underscored his message with a new campaign television commercial that seemed to contradict his rosier assessment of the country's economic health.

    It is titled, "Crisis" and said, "Our economy in crisis. Only proven reformers John McCain and Sarah Palin can fix it. Tougher rules on Wall Street to protect your life savings. No special interest giveaways. Lower taxes to create new jobs. Offshore drilling to reduce gas prices."

    The ad will run nationally on cable and network television but will not be part of McCain's more expensive and intensely targeted rotation of ads in battleground states, the campaign said. McCain has been spending about $600,000 a week on national ads. The Obama campaign ridiculed the commercial.

    "Today of all days, John McCain's stubborn insistence that the 'fundamentals of the economy are strong' shows that he is disturbingly out of touch with what's going in the lives of ordinary Americans," spokesman Bill Burton said in a statement.

    Over the weekend, advisers both to McCain and Democratic rival Barack Obama said they did not favor a government bailout of Lehman Brothers like that previously provided to Fannie Mae and Freddie Mac. The government also help engineer the recent sale of Bear Stearns Cos. to J.P. Morgan & Co.

    During his speech, McCain reiterated that position, saying, "We believe the time has come and gone that taxpayers should be viewed as the solution to problems not of their making."

    The financial turmoil threatened to overshadow two events on McCain's schedule not seen in weeks: his solo campaign rally and a town hall meeting.

    The Republican presidential contender visited the city where he once commanded a Navy squadron for his first individual rally since announcing Sarah Palin as his running mate over two weeks ago. Then he was flying to Orlando to take questions from an audience for the first time since a session in Las Cruces, N.M., before he accepted his party's nomination at the Republican National Convention.

    Aides hoped for a sizable turnout for the Jacksonville rally, a special wish after Palin drew thousands Saturday in Carson City, Nev.

    McCain was greeted by a crowd of several thousand who filled less than a quarter of the Jacksonville Veterans Memorial Arena.

    In a personal remark rarely made on the trail, he thanked the audience for caring for his first wife, Carol, and their three children during the 5 1/2 years he was a Vietnam prisoner of war.

    "I hope you know that in the years I was away in prison, the people of Orange Park, Fla., took care of my wife and family," McCain said. "The people of Jacksonville opened their hearts to my family. For that, I will be extremely grateful. My children had about 50,000 parents while I was gone and I'm very grateful."
  2. The general co-chairman of John McCain’s presidential campaign, former Sen. Phil Gramm (R-Texas), led the charge in 1999 to repeal a Depression-era banking regulation law that contributed significantly to today’s economic turmoil.

    Gramm’s role in the swift and dramatic recent restructuring of the nation’s investment houses and practices didn’t stop there.

    A year after the Gramm-Leach-Bliley Act repealed the old regulations, Swiss Bank UBS gobbled up brokerage house Paine Weber. Two years later, Gramm settled in as a vice chairman of UBS’s new investment banking arm.

    Later, he became a major player in its government affairs operation. According to federal lobbying disclosure records, Gramm lobbied Congress, the Federal Reserve and the Treasury Department about banking and mortgage issues in 2005 and 2006.

    During those years, the mortgage industry pressed Congress to roll back strong state rules that sought to stem the rise of predatory tactics used by lenders and brokers to place homeowners in high-cost mortgages.
  3. The man most responsible for the financial services and banking deregulation that made today possible, fmr. Sen. Phil Gramm, is the man John McCain wants to put in charge of the whole economy.

    As chairman of the Senate Banking Committee, Gramm was instrumental in pushing major banking deregulation in 1999 that critics say has contributed to the current mortgage crisis.

    The bank deregulation law, known as the Gramm-Leach-Bliley Act, was the most important update in banking laws since the New Deal. Its most important feature: breaking down walls between commercial banks, investment banks and insurance companies.

    Gramm's critics say the deregulation of commercial banks contained in the law made it easier for banks to push risky subprime mortgages on lower-income customers.

    "His fingerprints are all over a lot of pretty serious economic fallout from deregulation he championed and continues to do so," said Obama adviser Jared Bernstein, an economist with the liberal-leaning Economic Policy Institute.

    But Wayne Abernathy, staff director of the Senate Banking Committee under Gramm, said the exact opposite is true.

    "The current financial difficulties would be worse if there had not been Gramm-Leach-Bliley in place today," he said.

    Peter Van Doren, an economist at the libertarian Cato Institute, said Gramm simply modernized outdated Depression-era banking laws that had contributed to the savings and loan crisis of the '80s.

    Gramm says he fought consistently against the kind of risky practices that led to the subprime mess.

    "Nobody in the past quarter-century has argued louder against making downpayments lower and making (mortgages) riskier," Gramm said.
  4. It is actually quite funny watching the republicons running against themselves, trying ever so hard not to blame Bush and the republicans, not to mention McBush's voting record and his associates, etc.

  5. The Hockey Mom Addresses Wall Street Financial Crisis

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  6. wasnt it phil graham who got the deregulation that led to the subprime mess passed? isnt he a financial advisor to the mccain campaign?
  7. Phil Gramm is at the core of this mess, right after Greenspan. He is also expected to be McCain's Treasury Secretary pick.

    Some guy on MSNBC just said "We could manage to have another Great Depression if we worked at it hard enough. Phill Gramm might be just the guy to do it!"

  8. Banking deregulation was not the problem. The problem is FNM, FRE, Greenspan's low rates and the housing bubble.
    Banks were foolish trying to play that bubble, but bubbles are not prevented with more regulation but with a sound monetary policy.

    Seems to me both Obama and McCain are socialist fools.
  9. if regulations only allowed ibs to leverage 10 their capital instead of 30+ times we wouldnt be in this fix. so yes regulation can prevent bubbles.
    #10     Sep 15, 2008