McCain Condemns `Lax' Rules as Obama Backs Bush Economy Plans
By Kim Chipman and Hans Nichols
bloomberg.com
Sept. 19 (Bloomberg) -- John McCain condemned ``lax'' regulation and urged the Federal Reserve to ``get out of the business of bailouts,'' as his Democratic presidential rival Barack Obama supported Bush administration plans to address the worst U.S. financial crisis since the Great Depression.
While backing efforts by the Fed and U.S. Treasury to ease the turmoil on Wall Street, Obama said he will hold off crafting a more detailed plan until he meets with his economic advisers.
Obama gained in the polls this week as the global financial crisis cost investors more than $3 trillion in market value, and the focus of the presidential campaign shifted to the economy.
McCain, speaking in Green Bay, Wisconsin, today, criticized regulators who, he said, have been ``egregiously lax'' in protecting the American public.
`The Federal Reserve should get back to its core business of responsibly managing our money supply and inflation,'' he added. That would lead to a strong dollar, he said, to reduce energy and food prices ``and get this economy moving again.''
He also expanded on his call yesterday for the firing of President George W. Bush's chairman of the Securities and Exchange Commission, Christopher Cox.
McCain proposed creation of a Mortgage and Financial Institutions Trust to ease the crisis. The agency, to be housed within the Treasury Department, would identify troubled institutions and strengthen them before they become insolvent, the McCain campaign said.
Obama is meeting with senior economic advisers in Coral Gables, Florida, this morning, including former Treasury secretary Robert Rubin. Billionaire investor Warren Buffett will participate by phone.
Capital Infusion
Obama, who has been critical of the Bush administration for its alleged failure to head off the crisis, called yesterday for new legislation to infuse the financial system with capital, provide liquidity to the markets and help protect people from losing their homes.
Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke outlined to congressional leaders yesterday a plan to move troubled assets from the balance sheets of U.S. financial firms into a new government institution. Obama spoke by phone with both men yesterday.
``I have asked my economic team to refrain from presenting a more detailed blueprint of how an immediate plan might be structured until the Treasury and Federal Reserve have the opportunity to present their proposal,'' Obama said today in a statement.
The first-term Illinois senator said he is still reviewing emerging details of the proposal. He said it is critical that the public and markets have confidence that Democrats and Republicans will work together, he said.
Economic Advisers
Laura Tyson, head of former President Bill Clinton's Council of Economic Advisers, and former Federal Reserve Chairman Paul Volcker also are attending today's meeting with Obama. Former Treasury Secretary Paul O'Neill, who served in the current Bush administration, will participate by phone.
Obama had a 5-point lead over McCain, according to a CBS News/New York Times poll conducted Sept. 12-16 and posted on the CBS Web site on Sept. 17. McCain, a senator from Arizona, had a 2 percentage-point lead among registered voters in a CBS News poll released on Sept. 8, just after the Republican National Convention, CBS said.
Obama's earlier lead had evaporated as McCain announced his vice presidential pick of Alaska Governor Sarah Palin and the Republicans held their national convention in St. Paul, Minnesota, early this month.
To contact the reporter on this story: Kim Chipman in Miami at kchipman@bloomberg.net
Last Updated: September 19, 2008 10:42 EDT |
