McCain plays blame game in Wall Street meltdown
Posted: Friday, October 10, 2008 8:19 pm
By LYNDA HAMBLEN
We will never let this happen to Americans again! Such was John McCain’s opening remarks in his recent speech concerning the biggest Wall Street meltdown since the 1930s. My question is why did he let it happen in the first place?
Not that John McCain bears all the responsibility. All of us who overextended ourselves during the past few years of easy credit and low interest rates bear part of the blame. Allen Greenspan, who, as the former chairman of the Federal Reserve, gave us the easy credit and low interest rates, is also guilty. So is every U.S. representative and senator and every president from Reagan on that ever pushed for, supported, or voted for financial deregulation. But some are more guilty than others.
What McCain didn’t mention in his meltdown speech is more significant than what he did. He didn’t mention that he and his political allies have spent the last 26 years dismantling in the name of free markets and unfettered capitalism almost every financial regulation put in place by FDR to ensure America would never suffer another Great Depression.
Tom Delay, who’s been indicted by the State of Texas for campaign fraud, was one such ally. When he was the House Majority Leader, in return for campaign contributions and expensive perks, he prevented from coming to the House floor a bill mandating the minimum wage in U.S. territories. He thereby ensured the continuing wage salary in the Mariana Islands of thousands of Chinese girls who had paid factory owners in the islands big money to come to America where they could work, at the very least, for minimum wage. Instead they found themselves on the islands, working 12 hours a day, seven days a week for a mere pittance, all of which they had to pay back to their employers in return for food and board. They were trapped for life.
Not until the Democrats gained a majority in both houses of Congress in 2006, did the minimum-wage bill for the territories become law. I bet a cooked goose, though, that McCain voted against it. After all, he’s voted against the minimum wage 19 times in spite of his recent praise of American workers, a brilliant piece of toadying if I ever heard one. He claims to be proud of them; he just doesn’t want to pay those at the bottom of the economic ladder enough to live on. In the meantime the CEO’s of the failing investment banks are making millions.
Another of McCain’s allies was Phil Graham. You remember Phil, don’t you? He’s the former McCain campaign manager and economic adviser who said a few weeks ago that we “whiny” Americans weren’t suffering from an economic depression; we were suffering from a psychological one. As a senator, he spearheaded the effort to deregulate the energy market (hence today’s unfettered oil speculation and our high gasoline prices). He also pushed through accounting deregulations that brought about the Enron meltdown, in which thousands of little old grandmothers in California lost their life savings to the smirks of many an Enron trader.
Last week one economic analyst stated that second to Greenspan, Gramm bore the largest responsibility for the current Wall Street collapse. McCain would be a close third. It’s not for nothing that he likes to boast that he’s the biggest deregulator on the Hill. Gramm is the man that he’s considering as his secretary of the treasury. No wonder. They’re two of a kind.
What McCain did do in his Wall Street speech was to point the finger of blame, first at Charles Cox, chairman of the Securities and Exchange Commission (SEC), which provides oversight of the country’s financial markets. He completely ignored the fact that Cox lacked the staff he needed to oversee the few financial regulations left because in a brilliant stroke of deregulation by default, Bush, a free marketer to the core, drastically cut the SEC’s funding. McCain even went so far as to say that if he were president, he would fire Cox. Someone needs to tell him that the head of the SEC can’t be fired. His is a lifetime appointment.
McCain also stated that two years ago he warned about the impending implosion of the mortgage investment giants, Freddie Mac and Fanny Mae. What McCain didn’t say was that in spite of his foreboding, he kept on beheading every financial regulation that came down the pike, thus laying the groundwork for his prophecy to come true. When the two companies imploded last week, the government had to transfer $5.4 trillion from their books to its own, thereby doubling our national debt overnight.
Next, McCain pointed his finger at Obama, accusing him of being in the pockets of these two behemoths. I doubt that the campaign money Obama received from the two banks helped create the debacle we currently find ourselves facing, but that’s what McCain would like you to think. He failed to point out, however, that he, too, was in the pockets of an investment bank now facing bankruptcy.
Nor did he mention that his campaign manager once headed a firm that lobbied for Freddie and Fannie to the tune of $30,000 a month and that until last month his manager received $15,000 a month as a consultant to the two banks. Nor did he point out that Congress was warned 10 years ago about this debacle and chose to set on its backside. And that in spite of being warned, he and his cronies kept deregulating, deregulating, deregulating.
Last, McCain pointed a finger at the Democratic party. According to him, since it’s had the majority vote in both chambers of Congress for the last two years, it should be held primarily responsible for the financial disaster we find staring us in the face. But as for his party’s and his own responsibility in the catastrophe we are facing, he never so much as picked up, much less ate, a crumb from the plate of blame he was passing around.
Worst of all, after he was finished with the blame game, McCain turned the speech into a campaign rally, pledging tighter financial regulation were he to be elected president. Folks, tigers don’t change 26 years of stripes overnight. He also promised the taxpayer everything he could think of, including the rainbow and the pot of gold at the end of it, conveniently overlooking the fact that after the feds get through bailing out all the failing investment banks, the coffers are going to be empty. That’s $0.00 empty. Literally. Well, actually they were already empty. Now they’re just emptier.
And what was Obama’s take on all this? Well, he didn’t do any finger pointing at McCain. Instead, he gave himself a blow to the chin, stating that there was enough blame to go around on both sides of the aisle in Congress, himself included. In other words, “the buck stops here.” Next, he said that he was not going to make any hasty decisions about what needed to be done. He would wait until he knew more about the governor’s plan to prevent a financial collapse and until he had consulted with economic experts and officials from the Treasure Department. McCain wasted no time in lambasting him for his “indecision.”
What I find ironic in all this is that McCain stews and frets over $18 billion worth of earmarks but had no qualms at all about supporting financial deregulations that ended up costing the country $5.4 trillion. That and the fact that the Republican party has turned what is a disaster into a boondoggle. It seems that in Michigan and a few other states, party members are getting the names of all the Democrats on the foreclosed lists (and most will be Democrats) in order to contest their right to vote at the polls assigned to their former addresses.
I will end now with a question. Which candidate acted the most presidential in his response to the economic free fall we find ourselves in? Was it the candidate who gave himself a blow to the chin and took it like a man? Or was it the candidate who acted like a scared schoolboy, blaming everyone but himself when he’s caught with his hand in the cookie jar, all the while promising to put back the cookies he’s eaten?
More later on how this bailout is really going to cost and who’s going to have to give up what in order to pay it. I’ll give you two clues: lots more than we’re being told, and the middle and the working class.
Lynda Hamblen, a Union City resident, is a longtime contributor to The Messenger.