The Scum at the Top
Commentary on the Rats in Washington
McCain and the Zigzag Express
By Jonathan Alter
Newsweek
© September 19, 2008
In this crisis, the GOP candidate has swerved
all over the road.
John McCain's whole campaign is based on the idea
that Barack Obama is risky, untested and can't be
trusted to protect the nation in a crisis. But this
week it was McCain who seemed unpresidential, as his
Zigzag Express swerved back and forth across the median
strip. His approach to the greatest financial crisis
since 1933 was erratic and off-key. Would his presidency
be any different?
McCain's first reaction to the climactic events of
Sunday, Sept. 14, when Lehman Brothers fell, Merrill
Lynch was sold and AIG began to totter, was to repeat
his longstanding sound bite that "the fundamentals of
the economy are strong." When Obama predictably leapt
on this clueless comment with a TV ad, McCain quickly
backtracked by saying that he was merely talking about
the strength of "the American worker" and anyone who
disagreed obviously had a problem understanding the
importance of working people. He told the morning
shows that he was a Republican in the mold of Teddy
Roosevelt, though his true views on free-market
economics are more in tune with Herbert Hoover.
This year, that just won't do. So Tuesday, Sept. 16,
was John Edwards Day in the McCain camp, as the
candidate raged against corporate greed. The goal
here was to trade on his reputation as a reformer of
campaign finance to confuse voters into thinking he
also had a long record as a crusader against the
sins of Wall Street. After all, the words "reformer"
and "regulator" sound similar. In truth, McCain
voted in favor of every deregulatory effort that
came up for a vote during his 26 years in Congress
and bragged well into 2008 about his free-market
"deregulatory" bent. As the The Washington Post
pointed out, he did raise concerns about Fannie Mae
and Freddie Mac after a report about shoddy accounting,
but this was never a focus of his legislative career.
Obama's gauzy attacks on McCain's "philosophy" made
him sound like a philosophy professor, which is not
exactly the image he needs right now. But his hesitancy
during the week looked more prudent than McCain's
forthright and impassioned arguments on all sides of
all issues. McCain opposed bailing out AIG before he
supported it, then opposed it again. He voted to confirm
former representative Chris Cox as chairman of the
Securities and Exchange Commission in 2005 and uttered
no criticism of him until this week when he said Cox
had "betrayed the public trust" and that he would
fire him (though the president has no power to do
so). When that didn't go over well, he called Cox "a
good man" and dropped talk of trying to force his
resignation.
The big fight of the week was over who had the most
evil lobbyists on staff. The McCain campaign launched
a broadside at Obama for taking advice from Franklin
Raines, a disgraced former chief of Fannie Mae. But
Raines was never an Obama adviser and had much less
contact with the Obama campaign than a top lobbyist for
Fannie and Freddie had with the McCain campaign. That
lobbyist's name is Rick Davis and he's McCain's campaign
manager. "People with seven glass houses shouldn't throw
stones," gibed the Obama campaign. Obama himself, rising
to the occasion, went after the hypocrisy of McCain's
faux populist attacks on "the old boys network" in
Washington when he has several of the most powerful
lobbyists in town working for him. "The old boys network?"
Obama said. "In the McCain campaign, that's called a staff
meeting."
Friday, when Treasury Secretary Henry Paulson announced
the largest financial restructuring in the history of the
United States, was a time for sober reflection and
nonpartisan leadership. It would have been nice if
politicians had a moment of honesty and announced "the
era of Big Government is back" or "We are all socialists
now," but it's understandable why they did not. President
Bush, perceiving the requirements of the day, spoke in
measured and bipartisan tones. So did Obama. McCain, by
contrast, used the solemn occasion to unleash more harsh
and tone-deaf shots at Obama. And he expects us to believe
he wouldn't be a highly partisan president when that
suited his purposes?
My own experience with McCain on these regulatory issues
dates back to 1995 when he emerged from the dishonor of
the "Keating Five" savings-and-loan scandal with a new
fervor for regulating money in politics but no apparent
interest in regulating the abuses of a financial-services
industry that had brought him such shame.
I remember attending that year's GOP Florida straw poll,
where the scrambling for the 1996 presidential campaign
was well underway. When I walked in the door, McCain was
handing out Phil Gramm for President literature. I asked,
Why aren't you for Bob Dole? Fellow war hero, treasured
Senate colleague. McCain said that Gramm was an old
friend and he liked his views on the economy. But he's
prickly, unappealing and obnoxious, I said, reflecting
the conventional wisdom in Washington. You can't possibly
think he's the best person in the whole country to be
president! (One of the great things about McCain was that
until this year you could actually say stuff like that
to him.) McCain laughed but loyally stuck with Gramm, who
spent millions going nowhere in the primaries. Four years
later, Gramm, in character, returned McCain's loyalty by
endorsing George W. Bush.
More important, Gramm slipped language into 1999 legislation
that essentially deregulated all the fancy new Wall Street
products that got us into this mess. His wife, Wendy Gramm,
used her position as chair of the Commodities Futures
Trading Commission to legitimize the questionable trading
practices that led to the Enron scandal. Instead of
recognizing that Gramm's radical free-market views were
out of step with the realities of the post-Enron world,
McCain hired him as his top economic adviser in the 2008
campaign. Had Gramm not said that the United States is
"a nation of whiners" in a "mental recession" but facing
no serious economic difficulty, he would have likely been
McCain's secretary of the Treasury. The gaffes meant Gramm
had to resign his formal position with the campaign, but
he has continued to informally advise McCain on the economy
(they appeared together at the Aspen Institute this summer)
and would likely be rehabilitated in a McCain presidency.
Or maybe not. With McCain, the United States would get the
one thing investors most loath: uncertainty. On Tuesday,
President McCain would say one thing, on Wednesday another
and on Thursday and Friday he'd be back to what he said on
Monday. At best, Uncle Ziggy would drive us all over the
road; at worst, we'd be back in the ditch.
URL: http://www.newsweek.com/id/159883
© 2008
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Last Modified:
October 21, 2008