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Reports

This Is the Man Who’s Going to Fix the Economy?

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Posted on Sep 18, 2008

By Eugene Robinson

John McCain was telling the truth when he said that economics wasn’t his strong suit. In response to what many economists have called the worst financial crisis since the Great Depression, the Republican nominee has sounded—and let’s be honest here—totally, embarrassingly and dangerously clueless.

His now-famous remark Monday about how “the fundamentals of our economy are strong” would almost by itself be enough to justify my assessment. But he committed what was probably an even worse gaffe on Tuesday when, as the behemoth insurance company AIG teetered on the brink, McCain took a stand. “I do not believe that the American taxpayer should be on the hook for AIG,” he said. “We cannot have the taxpayers bail out AIG or anybody else.”

Within hours, the federal government had bailed out AIG to the tune of $85 billion. Treasury Secretary Henry Paulson and others who know how Wall Street works understood that if AIG were to collapse, much of the financial system might follow. 

McCain quickly changed his tune, saying the government was “forced” to rescue AIG because of “failed regulation, reckless management and a casino culture on Wall Street.” That sounds OK, but wait a minute. If he had any idea of what he was talking about—if he had any inkling of how big AIG is, or how central the company has become—then why on earth would he have taken a stand against a bailout in the first place? Doesn’t he have economic advisers who could fill him in?

Oh, I forgot. McCain’s top economic guru, Douglas Holtz-Eakin, was busy explaining to reporters that McCain, as chairman of the Senate Commerce Committee, “helped create” the BlackBerry. The McCain campaign quickly dismissed Holtz-Eakin’s remark as a “boneheaded joke,” but it was delivered with an awfully convincing deadpan. The blogosphere lit up with comparisons to Al Gore’s alleged claim to have invented the Internet.

Adding insult to injury, one of McCain’s most vocal campaign surrogates—former Hewlett-Packard chief executive Carly Fiorina—volunteered that McCain wasn’t qualified to run a major corporation. She gave the same assessment of Sarah Palin, Barack Obama and Joe Biden, but the McCain campaign’s high command was so piqued that it canceled Fiorina’s planned television appearances.

In an attempt to get back on message, McCain released new television ads Wednesday on the subject of the economy. “I’ll meet this financial crisis head on,” he says in one. “I won’t tolerate a system that puts you and your family at risk. Your savings, your jobs—I’ll keep them safe.”

In fairness, Obama hasn’t come up with a magic bullet to solve the financial crisis, either. There are differences, though. For one, Obama’s proposals for action—a stimulus plan, protection for homeowners in peril of foreclosure, increased regulation—are more specific than McCain’s. For another, Obama blames the crisis on “an economic philosophy that sees any regulation at all as unwise and unnecessary.” McCain now calls for better regulation, too—after enthusiastically playing a major role in the frenzy of deregulation that helped create this awful mess.

In other words, McCain is running against his own record.

To cite one example, McCain backed landmark legislation in 1999 that removed the walls between banks, investment firms and insurance companies. That bill allowed a company like AIG to expand beyond its traditional insurance business—which is still profitable—into exotic new products that ultimately brought the company down.

McCain, who told The Wall Street Journal in March that “I’m always for less regulation,” now asks voters to believe he will be a champion of tough, unblinking oversight. He’s shocked and outraged that Wall Street’s preening Masters of the Universe threw a drunken toga party and smashed all the furniture—but he helped buy the beer and told the cops to look the other way.

Here’s something that really ought to grab everyone’s attention: McCain supports George W. Bush’s idea of channeling at least some Social Security funds into “personal accounts” that individuals would invest on Wall Street. Some of that money would have been entrusted to firms such as Bear Stearns (failed), Lehman Brothers (failed) and Merrill Lynch (sold at a fire sale). Imagine what this crisis would be like if Americans’ Social Security benefits were evaporating along with their housing values and their 401(k) accounts.

This is the man who’s going to reform the economy?

Eugene Robinson’s e-mail address is eugenerobinson(at)washpost.com.

© 2008, Washington Post Writers Group

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By John Turner, October 16 at 12:06 pm #
(Unregistered commenter)

Wow last post dated 9-16

This is a bigger issue each day what the hell????
This guy flip flops worse than

Joe The Plumber ‘s Brown Trout

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By Sabagio Mauraeno, September 29 at 10:33 am #

Who but another crook to prove the truism: It takes one to know one.” A big hand for Anthony Scotto (born 1934), a New York mobster and labor union racketeer in the Gambino crime family who eventually became the head of the Brooklyn waterfront.

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By ANTHONY SCOTTO, September 29 at 4:42 am #
(Unregistered commenter)

IF THIS JERK WINS THAT IS MCCAIN.IT WILL BE BUSH ALL OVER AGAIN.DONT THE PEOPLE SEE WHATS GOING ON HERE.I PRAY FOR THIS COUNTRY THIS DOSE NOT HAPPIN.IF THE JERK WINS ITS ALL OVER.HOW DUMB ARE THE PEOPLE THAT BELIVE THIS MAN.O THERE THE SAME PEOPLE THAT PUT BUSH BEHIND THE WHEEL.WELL THAT CAR CRASHED AND BURNED WITH THE WRONG PEOPLE IN IT.ITS A CRYING SIN WHAT HE DID TO THIS GREAT COUNTRY.

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By Sabagio Mauraeno, September 25 at 3:35 am #

Words cannot begin to express how I now feel about Sen. McCain.  His sudden pronouncement to suspend his campaign and return ASAP to Washington to solve the problem of the economy, at first glance appears to be an unselfish, patriotic act. Then on second reading, and hearing what the timeline was between his call to Sen. Obama to the photo op announcement of his magnanimous gesture to the American people...smacks of a cynicism that up Sen. McCain hasty retreat to DC included a stopover in NYC to talk with Katy Couric about what he was going to do when he became President.  Sen. Obama wants to have this discussion in public debate.  That’s where it has to be. No deal cutting, no smoke filled room monopolized by faceless “advisors” (banking industry lobbyists) that up to now was the exclusive domain of the Bushites.  Sen. McCain’s behavior is that of a 1st Class Coward. It was not a courageous act. Sen. Obama was “sandbagged.” To paraphrase The Godfather, “it’s business, it’s just about business.” That’s true, but it’s not about the Business of the American People.  The McCain Gesture has nothing to do about fixing the economy. The “fix” was already in, and he’s just trying to go along to get along.

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By Don Knutsen, September 22 at 7:38 am #
(Unregistered commenter)

This would, in light of current events, seem an extreamly appropriate time for the Obama campaign to remind our people’s short spanned-memory of McCains involvement in the Keating 5 Savings & Loan mess that pre-cluded all of this now. I don’t understand the reluctance in letting everyone know that not only is McCain ill-equipped to solve this financial meltdown, but that he’s in no small part directly responcible for it both in his past dealings with the sort who orchestrated this kind of economic recklessness as well as his support for the republican’s zeal for de-regulation. The republicans are fond of worshipping at the alter of Saint Reagan, when it was Reagan who begun the dismantling of the regulations of the banking and insurance industries that have made this all possible. That, and being followed by administrations after that saw whatever benefitted corporate welfare as benefitting the country as a whole. Culminating in this criminal that has privatized every goverment agency they can rendering it incapable of serving the interests of the people. Low and behold we find that it was all about greed and we are being forced to come full circle in eventually realizing, atleast those not in the republican party, that corporations don’t give a damn about anything but their bottom line. There is no concern for our society, just their stockholders and ofcourse the lucrative buy-outs written into the CEO’s contracts...No matter what happens, they walk away fat cats. We as tax payers are stock holders in our country. Who is representing us ? Dosen’t appear to be the Congress or the executive branch. They have been quite busy representing the interests of these corporations at all of ours expense.

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By Sabagio Mauraeno, September 21 at 2:17 pm #

The bank bailouts made the front page of the Atlanta Journal Constitution today, as I suspect it did on everyone’s home town newspaper, even in Wasilla(?). What I noticed was a)Mr. Bush and the Group of Four didn’t name any names, real people who led the organizations in this conspiracy to rob Peter to pay Paul, or Dick or Tom or Harry.  Whatever.  In addition b) if true reform and assurances were supposed to be conveyed by this speech by the President on the steps of I guess the Whitehouse, the Mauraeno Clan didn’t hear any. Georgia has the highest foreclosure rate in the County. In the year 2001, then Governor Roy Barnes, got passed the toughest predatory lending controls legislation in the country. When the Republicans took over the State house, one of the first things Governor Sonny Perdue had this legislation not only rescinded, he proposed nothing to replace it. (he also got a voter ID law passed, claiming voter fraud was rampant in the state, but he couldn’t when asked provide any proof that it was), The housing industry in Georgia is now a disaster zone.  Instead of declaring disasters just in
Texas and Florida why not extend or expand the disaster area zone to include Georgia?  I don know. The bunch that should be identified will probably get multimillion dollar golden parachutes to disappear, if they haven’t done so already. They’ll make the profiteers that made billions off the Iraq War look like pikers if they were called on to account for themselves. 

Go Falcons!

Sabagio Mauraeno on a gray day in DeKalb County Georgia, soon to vote by absentee ballot tomorrow morning at
8am.

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By adrienrain, September 21 at 12:40 pm #

America almost always elects the most self-righteous candidate. Forget the issues, or their voting history, or McCain’s commitment to privatizing social security or his soon-forgotten allegiance to the land sharks of Wall St. For get his involvement with the S*L scandal.

He is denouncing the land sharks in no uncertain terms. (and they may be writing his lines, for all we know) Promising (gasp!) firings! He is really sounding like he cares. He doesn’t, of course, and will probably drag us all further down into the quagmire(s) that Bush led us to, but that won’t matter a bit.

I doubt that the details of our current difficulties will be much discussed. Don’t want to BORE the voters, or make them think you’re too intelligent to be the president, do you?

To see what will REALLY happen, study Palin closely. If McCain is elected, we will have a president Palin soon enough.

In fact, if I were President McCain, I’d hire a food taster.

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By SteveL, September 21 at 12:00 pm #

Just when you think that candidates cannot get worst than Bush/Cheney the republicans go through a strange de-evolution where they actually find McCain/Palin.

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By ocjim, September 20 at 12:18 pm #

He’s a protege of the disgraced leader we already have and he’s going to save us? What a fraud.

Long ago scandalously punched out of the global ring, like a rope-a-dope boxer, Bush is trotted out by his handlers.

He is the free world’s champion, in name only, but that carries the obligation of appearing at critical times. What is more critical than the economic well being of the United States, albeit the world?

Never mind that his profligate reign, intentionally shrouded by a messianic facade, helped lead to the global economic turmoil, he must stagger out in front of a disinterested public, speaking like a brain-addled boxer.

Bush and Congress are like bystanders as Ben Bernanke, the Federal Reserve Chairman and Henry Paulson, Bush’s Secretary of Treasury plot a critical rescue course.

Unlike a majority of Bush’s appointments to important federal posts, two of Bush’s appointments, Paulson and Bernanke, have so far proven to be competent enough to handle the crisis.

No praise is warranted for un-impeached, disgraced president who always put politics, an autocratic ideology, and raw power above everything else.

Counting on the success of the Paulson and Bernanke plan, one can only hope that it will engineer some sanity with the triumph of what appears to be responsible and intelligent leadership in Obama, and the rejection of cynical and negative Bush policy adherents: Bush’s Mini-Me, Sarah Palin, and a cynical protégé neocon successor, John McCain.

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By Sabagio Mauraeno, September 20 at 7:30 am #

Why should John McCain bother about fixing the economy? Yesterday, September 19, 2008, the fix was in,and the rules of crisis capitalism, panic capitalism, ...disaster capitalism, whatever, were applied. The race is on to pass massive legislation, without reading , discussing or debating, so as to get the money out there before the boats of the financial industry don’t sink and the captains of industry don’t have to go down with their ships of state or income statements. The shining example and historical example, THe Silver Lining of what this is all about is close to Mr Bush’s Family Album or Gallery of Family Matters:Jeb’s brother Neil Bush.  He cost American taxpayers $1 billion after some shady loans he made caused the Silverado Savings and Loan to go under in 1988.  Now he’s making millions selling software to Florida schools.  I guess this clan or coven is the only one around who DOES remember “Those who cannot remember the past are condemned to repeat it.”

Have a Nice Day.

Sabagio Mauraeno, home alone with a sick dog and reminded that it “tain’t no use worrying, nothin’s gonna turn out all right.”

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By Big B, September 19 at 5:21 pm #

The time for true capitalism is now!
Deregulate everything, and let the market take over.
Lets see if the repug wet dream can come true.

Oh, wait, that’s what has been going on for about 15 years now.
Jesus! I would have though that the mighty US economy would have taken at least 25-30 years to collapse under the weight of it’s dept.
But no, it may be upon us all ready. And there will be no stopping it. Oh, we may be able to slow it down a bit, put a speedbump of regulation in the way, borrow some more money from ourselves to keep going for just a little longer. Maybe we can borrow our way into economic prosperity!
Wait, we tried that in the 1980’s, and 1990’s. We were able to create false prosperity.
Any economic boom that would save us would have to be in an unpresidented scale! Trillions of extra tax revenue would have to be created in a relativley short time. That’s trillions folks!

Imagine if you will, having no public services, federal, state or local, no military, no infrastucture repair. Nothing, but tax collection.
It would take nearly four years to pay back the national dept! Not counting accumulated interest, of course.
All this assumes that this nation could survive without, well, everything.

Yup, we’re screwed!

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By yellowbird2525, September 19 at 4:19 pm #

is there ANY one in the USA in the public section who KNOWS how to add? WHY is the Gov & States claiming they are “broke” yet have all these fancy new police cars? And brand new low income apartment complexs for illegals? and giving them $ (for the land that WAS stolen from them from Corps after head of countries bribed by Pres & others from THIS country); that’s right folks: they want the land & water rights for every country in the hand of the Corps running the USA; they say: we have gotten away with it in the USA for years! do it OUR way! The problem is NOT the immigrants who will keep coming as we keep STEALING their land in every single country: but the folks PAYING for it will be the taxpayers: not the corps; & our men/women pay with their lives; and the vets get NOTHING cuz our Gov is “broke”; not adding up folks: not adding up;

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By kath cantarella, September 19 at 2:21 pm #
(Unregistered commenter)

McCain should not be where he currently is.

John McCain IS the elite. The son and grandson of powerful Admirals, and now one of the richest people in the country. What you have here, is the real product of ‘elitism’.
If Obama is ‘elite’, at least he’s actually done the hard work to get there from down here.

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By DoctorK, September 19 at 12:15 pm #

Any surprise that the bloated “invisible hand” of Karl Rove would push his way back into the Repug campaign?  Despite his earlier comments re: the tactics of his party’s candidate, looks like McSame has taken the advice and turned to this sloth as a way to get off the mat.
http://www.huffingtonpost.com/2008/09/19/new-mccain-at tacks-echo-r_n_127767.html

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By Rodger Lemonde, September 19 at 10:55 am #
(Unregistered commenter)

He is accomplished at denying inconvenient facts and comrades in arms.
Read this before you vote.
http://www.nationinstitute.org/p/schanberg09182008pt1

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By voiceofreason, September 19 at 9:58 am #

Sabagio Mauraeno is right. We need to remember McCain’s link with the Keating Five but more than that we have to somehow get people to think about the last time these Supply Side greed swelled people came to power under Reagan. They did exactly what W did, tax cuts to the rich which didn’t trickle down to anything other than unemployment and the Savings and Loan debacle. At that time the banks and Wall Street were regulated so they only thing they could play roulette with were Saving and Loans. Well after the “Mavrick” helped his buddies out of that mess he spent the next 26 years deregulating everything he could. The article quotes him saying he is always on the side of deregulation. It was tough as long as democrates controlled the congress but after the 1994 “Contract with America” they had free reign and deregulate they did. Then the “election” of W kind of set it all in motion. With little or no regulation and rich people with more money then they know what to do with we set a course for disaster. I think it is time we void the Contract with America and get bact to what is right for all Americans. Supply Side economics as practiced by the Capitalits party of America is not good for a nation and has led to disaster whenever it has been practiced i.e. the 1920’s; the 1980’s; and the last 4 years.

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By Alan, September 19 at 9:00 am #
(Unregistered commenter)

McGoo:Ayyyy can’t find my glasses.
Palin: On the table there Prez.
McGoo: Thank’s Veep. Glad we kept Paulson,
he seems to know what he’s doing.
Palin: Sure Prez.
McGoo: Well anyway, he seems like maybe he
sort of knows something.
Palin: Sure Prez.
McGoo: Veep,
Palin: Yes, Prez.
McGoo: Maybe I should call Dubyah?
Palin: Sounds fine Prez.  Oh my, gotta go!
McGoo: Veep?
Palin: The cookies are burning!

Report this

By G.Anderson, September 19 at 5:59 am #

There is not going to be a fix of Wall Steet.

Instead, you are witnessing the demise of Wall Street and our financial system.

Why, because unless the selling of derviatives are made illegal, this financial collapse will deepen and continue. Giving Wall Street a face lift will not help.

But that’s the problem isn’t it America, only has it’s debt to sell now, that’s our number one product.

And my friend what will happen if after pouring another 300 billion into the market, or even 3 trillion, what will happen to this country, when the collpase accelerates?

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By Fahrenheit 451, September 19 at 5:18 am #

@ Sabagio Mauraeno;

Sage and delightful comments; I couldn’t agree more.

But, you also must recognize to whom you speak!

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By Sabagio Mauraeno, September 19 at 5:08 am #

The Keating Five! Remember? Ronald Reagan’s best example of minimal government and deregulation? John McCain’s education on the dismal science of economics began here. And ended here.  He is a man locked in a time warp, who daily violates an admonition that should be etched in stone with all the known languages in print:

“Those who cannot remember the past are condemned to repeat it.”
George Santayana. 1863-1952

Then again, Sen. McCain is 73, and remembering does become more and more selective at that age. “Old men and comets have been reverenced for the same reason; their long beards, and pretences to foretell events.”
Jonathan Swift. 1667-1745.

Sabagio Mauraeno, home alone in Decatur Georgia, canceling my subscription to The Economist, and being reminded every waking hour: “Wounds of the whip, whether physical or social, do not heal if they are masked or unacknowledged. If we do not remember the past, we cannot forgive the past and work towards the future.” from Khaled Hosseini’s novel The Kite Runner

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By Fahrenheit 451, September 19 at 4:15 am #

Okay, lets call it how it is: McCain is having “senior” moments.  His 72, is too old to be president; there I said it!  And it’s true.  Forget all of this PC crap; McCain is too old and Palin?  Oh, please!  At best she’s a bad caricature of a competent woman candidate!  Hello?

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