Wednesday, September 17, 2008

Your Daily Dose of Disjointment

Building on yesterday's regulatory post, here's John McCain speaking about the Wall Street crisis:
Republican presidential candidate John McCain on Tuesday called for a high-level commission to study the current economic crisis and claimed that a corrupt and excessive Wall Street had betrayed American workers.


Appearing Tuesday on the three network morning shows, McCain said there was indeed a financial crisis and that to understand what had caused it, the nation would need a review on the order of the one led by the Sept. 11 commission. That bipartisan panel studied the events leading to the 2001 terrorist attacks and recommended changes to avert another attack.

"I warned two years ago that this situation was deteriorating and unacceptable,'' McCain said on "Good Morning America'' on ABC. "And the old-boy network and the corruption in Washington is directly involved and one of the causes of this financial crisis that we're in today. And I know how to fix it and I know how to get things done.''

Insert Maverickeyness here:
This morning's New York Times probed the candidates' actual records. It concludes that McCain "has never departed in any major way from his party's embrace of deregulation." Indeed, the Times says, McCain "has no history prior to the presidential campaign of advocating steps to tighten standards on investment firms."
(Ed note: this is because McCain is a card carrying member of the old-boy network.)
A decade ago McCain pushed unsuccessfully for a moratorium on all federal regulations. Asked about that by the Wall Street Journal this spring, McCain said, "I'm always for less regulation. But I am aware of the view that there is a need for government oversight."
Translation: "I pushed for a measure to stop regulation but there is a need for oversight. What that oversight is...well, I'll leave that up to a blue ribbon panel of Wall Street experts and lobbyists. Oh, but not Carly Fiorina. She's being disappeared." (BTW: Carly couldn't run a big company either.)

The Times also points out that among McCain's top economic advisers are "two outspoken advocates of free market approaches, former Senator Phil Gramm and Alan Greenspan," the former chief of the Fed.

As we noted yesterday, Gramm authored a bill in 2000 that essentially stopped the government from regulating the derivatives and other fancy investments that have fueled the current crisis. (A story this summer in Mother Jones is one of the only stories we've seen that probed the bill and its implications.)

Phil Gramm: reformer of the old-boy network.

McClatchy has more on McCain's ideas for reform:

McCain pledged that, along with running mate Sarah Palin, "We will never put America in this position again. We will clean up Wall Street." He did not offer much detail.

"We have a regulatory system in Washington today that was designed in the 1930s, and there's an alphabet soup of different agencies and they have to be streamlined, they have to be consolidated and they have to be effective," McCain said. "And those regulators have been asleep at the switch, and we've got to fix it."

McCain's campaign Web site contains no proposal outlining regulatory reform for Wall Street. However, in an e-mail, McCain campaign officials provided a broad outline of McCain's plan, which includes strengthening disclosure in the lending process so borrowers know exactly what they are getting into and complete disclosure of all cash and non-cash compensation of corporate CEOs.

As for his opponent:

Obama, for his part, proposed a six-point plan in March to reform the regulatory system, and it's on his campaign Web site. His plan includes:

  • Giving the Federal Reserve basic supervisory authority over all institutions to which it might later be asked to extend credit.
  • Strengthening capital and disclosure requirements of financial institutions and management of liquidity risk, and more investigation of rating agencies.
  • Creating a financial market oversight commission to anticipate crises and report to the government.
  • Streamlining competing regulatory agencies.
OK, quick translation from Mr. McCain: "I know what the problem is, I know how to solve it, and my solution is to gather a bunch of people who know what they're talking about. Of course, these people can't belong to the old-boy network and, as I mentioned before, Carly is no longer part of the club. That leaves me with Phil Gramm, the CEO of Merill Lynch, Todd Palin, and...well, I'm sure there are a lot of former Lehman employees with a lot of time on their hands right now."

Perhaps the most absurd aspect of McCain's stance on the crisis is this:
Sen. John McCain doesn't say much these days about his work in Congress, preferring to run against the institution that he has been part of for the past 26 years.

"The old-boy network and the corruption in Washington is directly involved and one of the causes of this financial crisis that we're in today," he said this morning on ABC's "Good Morning America."

But in several interviews this morning, he also bragged about being the chairman of the Senate Commerce Committee, claiming that experience gives him the knowledge to fix the economy.

"I know how to fix this economy. I have had great experience on these issues as chairman of the Commerce Committee," he said on Fox's "Morning Joe."

On CNBC's "Squak Box," he added: "I understand the economy. I was chairman of the Commerce Committee that oversights every part of our economy."

Folks, the Commerce Committee most certainly does not oversee every part of our economy. It doesn't even oversee the part that is causing all the trouble:

In fact, it is the Senate Banking Committee that has oversight of "banks, banking and financial institutions; control of prices of commodities, rents and services; federal monetary policy, including the Federal Reserve System; financial aid to commerce and industry and money and credit, including currency and coinage."

According to its Web site, the Commerce Committee oversees 13 areas, beginning with the Coast Guard, and continuing through "regulation of consumer products and services ... except for credit, financial services, and housing" -- the very areas now in crisis

Perhaps this is why the man is no longer running on his experience in Congress. He doesn't even know what the hell he was doing there. He and Palin deserve one another.

Wrapping this little ditty up, let me present you with a blast from the past. As you may already know, McCain was quoted as saying that the fundamentals of our economy were "strong" on the day after Lehman Brothers went under, Merill Lynch was sold (before it went under), and AIG appeared on the verge of collapse. When asked what he meant by "fundamentals" McCain quickly pulled out the coward card and hid behind this:
"Our workers are the most innovative, the hardest working, the best skilled, most productive, most competitive in the world. My opponents may disagree, but those fundamentals of America are strong."
Coward, coward, coward, coward, and more coward. Remember, if you disagree with his man and his economic take, you hate American workers.

Anywho, this isn't the first time he's pulled out the "fundamentals are strong" argument. By last count, he's used it 16 times this year (in other words, it's a talking point that worked until things started to collapse--now that the poo has hit the fan, he expects you rubes to believe that he meant 'hard working Americans' all along. Who is the elitist here?) Now, keep in mind what McCain is trying to do here. He is saying that he a) told everyone the problem was coming, b) that he knows how to fix it, c) that he will fix it by bringing in experts that supposedly will not be part of the old-boy network, d) he is being advised by men like Phil Gramm and the CEO of Merill Lynch, and e) he has experience with these issues because he was on the Senate Commerce Committee. Keeping all of this in mind, here's what he had to say about the possibility of a recession back in January:
Sen. John McCain disputed the suggestion. “I don’t believe we’re headed into a recession,” he said, “I believe the fundamentals of this economy are strong and I believe they will remain strong. This is a rough patch, but I think America’s greatness lies ahead of us.”
Folks, if you believe that Americans work hard, the American fundamentals will always be strong. That's not the issue here and this lying coward knows it. This is just like hiding behind the troops when someone disagrees with your policy on the wars in Afghanistan and Iraq. Keep in mind that McCain has had 9 months to come up with a plan for this issues. Keep in mind that he has had 9 months to figure out a comprehensive strategy for the economy. Keep in mind that he has had 9 months to do more than read Greenspan's book. Maybe he's the one who needs to be holed up in Alaska to remember his lines.

UPDATE: This is too funny. McCain the regulatory reformer doesn't even know what the SIPC is or does:

Moving past the verbal gaffe, the more serious problem is that John McCain and his advisors don’t seem to know what SIPC is. In today’s speech, he said:

Too many firms on Wall Street have been able to count on casual oversight by regulatory agencies in Washington. And there are so many of those regulators that the responsibility for oversight is scattered, unfocused and ineffective. Among others, we’ve got the SEC, the CFTC, the FDIC, the SPIC and the OCC. But for all their big and impressive sounding names, the fact is they haven’t been doing their job right, or else we wouldn’t have these massive problems on Wall Street. At their worse, they’ve been caught up in Washington turf wars instead of working together to protect investors and the public interests. And we don’t need a dozen federal agencies doing the job badly — we need the best federal agencies to do the job right.

The problem is, SIPC is not a regulator. Don’t take my word for it, though. Check out the SIPC’s own web site, which states “Though created by the Securities Investor Protection Act (15 U.S.C. §78aaa et seq., as amended), SIPC is neither a government agency nor a regulatory authority. It is a nonprofit, membership corporation, funded by its member securities broker-dealers.”

Hilarious. Outside of the SIPC nonsense, someone should ask McCain who he thinks could have possibly been in charge of placing personnel in all of these executive positions over the past eight years.

UPDATE ii: The Coward Express keeps on a chuggin':

Again, to recap: he doesn't even know what one of his own committees does, he has a long and strong record of being for exactly the type of deregulatory policies that have led to the current mess, his top economic adviser is the guy who literally wrote the piece of legislation that did away with the parts of Glass-Steagall that are at the heart of the matter, he thinks the fundamentals of the economy are fine (and he has been saying so since the beginning of the year), and if you disagree with him, you hate American workers. To top it all off, he throws a little POW reference in there for good effect. Yes, because the advanced interrogation techniques (not torture, mind you) of the North Vietnamese are relevant to the fiscal policies of the American economy. Maybe we should be talking to some of the men at the John McCain Guantanamo Bay Leadership Academy. I'm sure those guys have been through enough advanced interrogation techniques to stand up to Wall Street jokers like McCain financial adviser John Thain, CEO of Merill Lynch who may get a chunk of $200 million for running his company into ruin. I can assure you that they won't be a part of the old-boy network.

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