Yet Another Reason to Vote Against John McCain
Shame on Marty Feldstein. Shame on John Taylor

McCain vs. Obama on Financial Regulation

Jackie Calmes calls John McCain a liar:

In Candidates, 2 Approaches to Wall Street: On the campaign trail on Monday, Mr. McCain, the Republican presidential nominee, struck a populist tone. Speaking in Florida, he said that the economy’s underlying fundamentals remained strong but were being threatened “because of the greed by some based in Wall Street and we have got to fix it.” But his record on the issue, and the views of those he has always cited as his most influential advisers, suggest that he has never departed in any major way from his party’s embrace of deregulation and relying more on market forces.... He has often taken his lead on financial issues from two outspoken advocates of free market approaches, former Senator Phil Gramm and Alan Greenspan.... Individuals associated with Merrill Lynch, which sold itself to Bank of America in the market upheaval of the past weekend, have given his presidential campaign nearly $300,000, making them Mr. McCain’s largest contributor, collectively.

By contrast, Barack Obama:

Mr. Obama sought Monday to attribute the financial upheaval to lax regulation during the Bush years, and in turn to link Mr. McCain to that approach. “I certainly don’t fault Senator McCain for these problems, but I do fault the economic philosophy he subscribes to,” Mr. Obama told several hundred people who gathered for an outdoor rally in Grand Junction, Colo. Mr. Obama set out his general approach to financial regulation in March, calling for regulating investment banks, mortgage brokers and hedge funds much as commercial banks are. And he would streamline the overlapping regulatory agencies and create a commission to monitor threats to the financial system and report to the White House and Congress.

There is more:

Mr. McCain was quick on Monday to issue a statement calling for “major reform” to “replace the outdated and ineffective patchwork quilt of regulatory oversight in Washington and bring transparency and accountability to Wall Street.” Later his campaign unveiled a television advertisement called “Crisis,” that began: “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.” Mr. McCain’s reaction suggests how the pendulum has swung.... Mr. McCain has always been in his party’s mainstream on the issue. In early 1995, after Republicans had taken control of Congress, Mr. McCain promoted a moratorium on federal regulations of all kinds. He was quoted as saying that excessive regulations were “destroying the American family, the American dream” and voters “want these regulations stopped.” The moratorium measure was unsuccessful. “I’m always for less regulation,” he told The Wall Street Journal last March.... "I am fundamentally a deregulator.” Later that month, he gave a speech on the housing crisis in which he called for less regulation....

Mr. Obama also does not have much of a record on financial regulation.... In March 2007, however, he warned of the coming housing crisis, and a year later in a speech in Manhattan he outlined six principles for overhauling financial regulation. On Monday, he said the nation was facing “the most serious financial crisis since the Great Depression,” and attributed it on the hands-off policies of the Republican White House.... Later, citing Mr. McCain’s remarks about the economy’s strong fundamentals, he told a Colorado crowd that Mr. McCain “doesn’t get what’s happening between the mountain in Sedona where he lives and the corridors of power where he works.”

One reason for both men’s sketchy records on financial issues is that neither has been a member of the Senate Banking Committee, which has oversight of the industry and its regulators. Under both parties’ leadership, the committee often has been a graveyard for proposals opposed by lobbyists for financial institutions, including Fannie Mae and Freddie Mac, which last week were forced into government conservatorships. Industry lobbyists’ success in killing such regulations meant senators outside the banking panel did not have to take a stand on them.