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Unfortunately I believe that we are limited in what we can focus on. I think that if we proceed with the partisan sideshow of prosecuting Bush admin. officials, healthcare will get lost in the brouhaha.
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Candidates Duel Over Wall Street Probe

POSTED: 01:20 PM ET, 09/17/2008 by The Editors

With the housing market in free fall, the stock market plunging and the government spending tens of billions to bail out a giant insurer and a Wall Street bank, the presidential candidates have sharply different takes on how to deal with the nation's economic crisis.

Republican John McCain again today called for a 9/11-style commission to look into what went wrong on Wall Street: "You need to get the best minds in America together," he told Good Morning America (transcript ). Democrat Obama ridiculed that idea and is seeking to link McCain to what he called the lax regulatory environment of the Bush administration. The Obama camp reiterated its proposal to regulate investment banks, mortgage brokers and hedge funds much as commercial banks are.

McCain called specifically today for an investigation into whether there was malfeasance on the part of AIG executives after the government agreed to pay $85 billion to bail out the country's largest insurance company.

A day earlier McCain rejected the idea of an AIG bailout. He said today the government was forced into it. "These actions stem from failed regulation, reckless management, and a casino culture on Wall Street that has crippled one of the most important companies in America," McCain said in a statement.

McCain has been a proponent of some financial deregulation in the past, as The Post's Michael Shear points out today.

Democrat Barack Obama dismissed McCain's call for a blue-ribbon commission as "the oldest Washington stunt in the book." "This isn't 9/11. We know how we got into this mess. What we need now is leadership that gets us out," Obama told a rally in Colorado yesterday.

Obama said in a statement that McCain has not acted to strengthen regulatory agencies: "Despite his eleventh-hour conversion to the language of reform, Senator McCain has subscribed to this philosophy for 26 years in Washington and the events of this week have rendered it a colossal failure."

In a speech in March after the Fed helped bail out Bear Stearns, Obama said the Fed should have supervisory authority over any institution with access to its funds, and that regulators should set standards for how much liquidity financial institutions have, not just how much capital. He proposed a financial risk oversight body to identify situations and lending practices that could threaten the entire financial system before they grow serious.

By The Editors |  September 17, 2008; 1:20 PM ET Economy Watch
Previous: D.C. Tax Scam Followed Blueprint | Next: Senator Doubts Anthrax Scientist Acted Alone


Please email us to report offensive comments.

We need to stop the blame game and start coming up with ideas to fix our broken economy. Obama has at least given us a clear outlook on his plan. McCain so far has only given us fluff statements with nothing to back it up. We need more than press clips and verbal snippets to make a proper decision. We need to know what your plans are.

Posted by: Xander | September 17, 2008 2:08 PM

Yes, McSame wants a commission to investigate. Another road to nowhere, much like the other commissions in recent times. Commissions designed to "investigate" are nothing more than political stallers, designed to pacify until the smoke clears and a new fire is lit - yet another scandal resulting from poor decisions from Republicans. McCain has, once again, flip-flopped. This time on his assessment of the economy. His squirming is fun to watch, but scary as hell to think that this idiot might be the next mistake in the White House.

Posted by: Mark Bohannon | September 17, 2008 2:22 PM

The stock market, housing and economy is in a free fall and there is a whole lot of people to be blamed for it. If I have to start at the top, I will start with the Government's failure to regulate these industries which are critical for the health of the Economy.

I have more confidence in Senator Obama to start fixing things because Senator McCain's knowledge on the above appears to be shallow and he believes in de-regulation which will cause more harm than good.

Posted by: Nick Kumar | September 17, 2008 2:51 PM

Freddie and Fannie used huge lobbying budgets and political contributions to keep regulators off their backs.

A group called the Center for Responsive Politics keeps track of which politicians get Fannie and Freddie political contributions. The top three U.S. senators getting big Fannie and Freddie political bucks were Democrats and No. 2 is Sen. Barack Obama.

Now remember, he's only been in the Senate four years, but he still managed to grab the No. 2 spot ahead of John Kerry — decades in the Senate — and Chris Dodd, who is chairman of the Senate Banking Committee.

Fannie and Freddie have been creations of the congressional Democrats and the Clinton White House, designed to make mortgages available to more people and, as it turns out, some people who couldn't afford them.

Fannie and Freddie have also been places for big Washington Democrats to go to work in the semi-private sector and pocket millions. The Clinton administration's White House Budget Director Franklin Raines ran Fannie and collected $50 million. Jamie Gorelick — Clinton Justice Department official — worked for Fannie and took home $26 million. Big Democrat Jim Johnson, recently on Obama's VP search committee, has hauled in millions from his Fannie Mae CEO job.

Now remember: Obama's ads and stump speeches attack McCain and Republican policies for the current financial turmoil. It is demonstrably not Republican policy and worse, it appears the man attacking McCain — Sen. Obama — was at the head of the line when the piggies lined up at the Fannie and Freddie trough for campaign bucks.

Sen. Barack Obama: No. 2 on the Fannie/Freddie list of favored politicians after just four short years in the Senate.

Next time you see that ad, you might notice he fails to mention that part of the Fannie and Freddie problem.

Posted by: Anonymous | September 17, 2008 7:22 PM

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