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jAZ
09-22-2008, 11:15 PM
http://www.bloomberg.com/apps/news?pid=20601070&sid=alfUj1r0Z10o&refer=politics

Obama, Not McCain, Shows Steady Hand in Crisis: Albert R. Hunt

Commentary by Albert R. Hunt

Sept. 22 (Bloomberg) -- For the first time since 1932 a presidential election is taking place in the midst of a genuine financial crisis. The reaction of the candidates was revealing.

John McCain, railing against the ``greed and corruption'' of Wall Street, won the first round of the sound-bite war. He came out with a television commercial on the ``crisis'' early on Monday of last week, and over the next three days gave more than a dozen broadcast interviews. He and running mate Sarah Palin would reform Wall Street and regulate the nefarious fat cats that caused this fiasco.

It was a great start. It then went downhill as he stumbled over his record of championing deregulation, claimed the economy was fundamentally strong, and flip-flopped over the government takeover of American International Group Inc.

For his part, Barack Obama didn't come across as passionately outraged and wasn't as omnipresent or as specific.

More revealing, though, was to whom both candidates turned on that panic-ridden morning of Sept. 15, and how the messages evolved before and after that day.

McCain called Martin Feldstein, the well-known Republican economist and Reagan administration adviser, John Taylor of Stanford University, who served in President George W. Bush's Treasury and Carly Fiorina, once the chief executive officer of Hewlett-Packard Co.

Obama called former Federal Reserve Chairman Paul Volcker, and former Treasury Secretaries Robert Rubin and Larry Summers.

It was a mismatch.

Towering Volcker

Feldstein, for all his intellect, was ineffective in the Reagan administration; then-White House deputy chief of staffDick Darman cut him out of important action. Volcker, first at the Treasury and then as chairman of the Federal Reserve, was a towering figure in every way.

Taylor is a well-regarded academic. In four years as undersecretary of the Treasury, he left few footprints. Summers, as both deputy secretary and secretary, left a lot.

Fiorina is smart and quick; to put it charitably, Rubin will forget more about financial markets than she'll ever know.

When it comes to governance, and either Democrat Obama or Republican McCain will inherit this miserable financial mess, the best guide is who they talked to, what they said, where they've been, and how knowledgeable they are.

Obama's record and earlier speeches belie some of his more populist rhetoric. Yet they also suggest, as do his advisers, a much more activist government role than is likely under a McCain-Palin administration.

Comfortable With Subject

Obama called for the overhaul of the financial-regulatory system and tougher enforcement well before this past week's traumas.

Detached observers who watched him last week, especially in a Bloomberg Television interview, were taken by how conversant and comfortable he was on the subject, despite his thin record. Few detached observers came away with that impression watching the Arizona senator.

Much of the re-regulatory fever focuses on the Federal Reserve and any new agencies created to clean up the fiasco. Central, however, will be a more vigorous Securities and Exchange Commission, or whatever holds that investor-protection function.

McCain displayed a sudden interest in the SEC last week when he demanded that Chairman Chris Cox be fired. When his campaign was asked if the senator had ever criticized the current commission's performance before, they failed to respond.

All For Obama

Tellingly, three former SEC chairmen, a Democrat, Arthur Levitt, and two Republicans, David Ruder and Bill Donaldson, have endorsed Obama. Levitt is a board member of Bloomberg LP, the parent company of Bloomberg News.

Donaldson, who was tapped by Bush to head the SEC, says Obama called him last year about the financial-regulatory problems. He has never heard from McCain.

``Obama has been talking about the need for better financial regulation well before this crisis hit and has done some real thinking about it,'' says Donaldson, a lifelong Republican. ``McCain comes across as someone who suddenly realized changes have to be made.''

There is a case for McCain: it's if you believe in less regulation, that the government should get out of the way and let the markets work their will.

No `Real Understanding'

``I don't think anyone who wants to increase the burden of government regulation and high taxes has any real understanding of economics,'' McCain said this spring at an Inez, Kentucky, town hall meeting, where he also declared ``the fundamentals of our economy are good.''

Until recently, he repeatedly invoked Ronald Reagan's calls for less regulation. He voted for the 2002 Sarbanes-Oxley corporate-governance regulations -- then last year said he regretted that vote.

McCain isn't averse to some regulations. He has strongly championed a greater federal role in campaign finance, tobacco and boxing. In each case, he saw a clear villain -- special- interest money, a tobacco product that puts profits ahead of lives, and unscrupulous boxing promoters.

There has been little evidence that prior to last week he ever put financial firms in this category. Although he assailed excessive corporate compensation last week, McCain has opposed a tepid House-passed bill that would give corporate shareholders the right to cast a non-binding vote on compensation of top executives.

Turning to Gramm

The person he has turned to most for counsel on such matters is his ex-Senate colleague Phil Gramm. Gramm is a political Gordon Gekko, a brainy economist with a Darwinian view of markets and public policy.

It's not easy to remember what the financial world looked like 10 days ago much less 10 months ago. Decisions that will be reached after this election will be the most important since the 1930s.

Obama, as more than a few Democrats are complaining, hasn't been as quick, sharp -- or demagogic -- as they would like. McCain has been beset by deeper difficulties: an inchoate and inconsistent message that seems to reflect political exigencies more than principled convictions.

On the financial crisis, last week belonged to Obama.

(Albert R. Hunt is the executive editor for Washington at Bloomberg News. The opinions expressed are his own.)

To contact the writer of this column: Albert R. Hunt in Washington at ahunt1@bloomberg.net

RINGLEADER
09-22-2008, 11:20 PM
Al Hunt.

Yawn.

jAZ
09-22-2008, 11:23 PM
Kevin Hassett & American Enterprise Institute.

Yawn.
Fixed your post. :p

RINGLEADER
09-22-2008, 11:30 PM
Fixed your post. :p

I'll do your job for you and give your Al Hunt...a GEORGE WILL:

WASHINGTON -- Under the pressure of the financial crisis, one presidential candidate is behaving like a flustered rookie playing in a league too high. It is not Barack Obama.

Channeling his inner Queen of Hearts, John McCain furiously, and apparently without even looking around at facts, said Chris Cox, chairman of the Securities and Exchange Commission, should be decapitated. This childish reflex provoked The Wall Street Journal to editorialize that "McCain untethered" -- disconnected from knowledge and principle -- had made a "false and deeply unfair" attack on Cox that was "unpresidential" and demonstrated that McCain "doesn't understand what's happening on Wall Street any better than Barack Obama does."

To read the Journal's details about the depths of McCain's shallowness on the subject of Cox's chairmanship, see "McCain's Scapegoat" (Sept. 19, Page A22). Then consider McCain's characteristic accusation that Cox "has betrayed the public's trust."

Perhaps an old antagonism is involved in McCain's fact-free slander. His most conspicuous economic adviser is Douglas Holtz-Eakin, who previously headed the Congressional Budget Office. There he was an impediment to conservatives, including then-Congressman Cox, who as chairman of the Republican Policy Committee persistently tried and generally failed to enlist CBO support for "dynamic scoring" that would estimate the economic growth effects of proposed tax cuts.

In any case, McCain's smear -- that Cox "betrayed the public's trust" -- is a harbinger of a McCain presidency. For McCain, politics is always operatic, pitting people who agree with him against those who are "corrupt" or "betray the public's trust," two categories that seem to be exhaustive -- there are no other people. McCain's Manichean worldview drove him to his signature legislative achievement, the McCain-Feingold law's restrictions on campaigning. Today, his campaign is creatively finding interstices in laws intended to restrict campaign giving and spending. (For details, see The Washington Post of Sept. 17, Page A4; and The New York Times of Sept. 20, Page One.)

By a Gresham's Law of political discourse, McCain's Queen of Hearts intervention in the opaque financial crisis overshadowed a solid conservative complaint from the Republican Study Committee, chaired by Rep. Jeb Hensarling of Texas. In a letter to Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke, the RSC decried the improvised torrent of bailouts as a "dangerous and unmistakable precedent for the federal government both to be looked to and indeed relied upon to save private sector companies from the consequences of their poor economic decisions." This letter, listing just $650 billion of the perhaps more than $1 trillion in new federal exposures to risk, was sent while McCain's campaign, characteristically substituting vehemence for coherence, was airing an ad warning that Obama favors "massive government, billions in spending increases."

The political left always aims to expand the permeation of economic life by politics. Today, the efficient means to that end is government control of capital. So, is not McCain's party now conducting the most leftist administration in American history? The New Deal never acted so precipitously on such a scale. Treasury Secretary Paulson, asked about conservative complaints that his rescue program amounts to socialism, said, essentially: This is not socialism, this is necessary. That non sequitur might be politically necessary, but remember that government control of capital is government control of capitalism. Does McCain have qualms about this, or only quarrels?

On "60 Minutes" Sunday evening, McCain, saying "this may sound a little unusual," said that he would like to replace Cox with Andrew Cuomo, the Democratic attorney general of New York who is the son of former Gov. Mario Cuomo. McCain explained that Cuomo has "respect" and "prestige" and could "lend some bipartisanship." Conservatives have been warned.

Conservatives who insist that electing McCain is crucial usually start, and increasingly end, by saying he would make excellent judicial selections. But the more one sees of his impulsive, intensely personal reactions to people and events, the less confidence one has that he would select judges by calm reflection and clear principles, having neither patience nor aptitude for either.

It is arguable that, because of his inexperience, Obama is not ready for the presidency. It is arguable that McCain, because of his boiling moralism and bottomless reservoir of certitudes, is not suited to the presidency. Unreadiness can be corrected, although perhaps at great cost, by experience. Can a dismaying temperament be fixed?

http://www.realclearpolitics.com/articles/2008/09/mccains_temperment_fails_again.html

Ouch, that's gotta hurt... ;)

patteeu
09-23-2008, 06:19 AM
For McCain, politics is always operatic, pitting people who agree with him against those who are "corrupt" or "betray the public's trust," two categories that seem to be exhaustive -- there are no other people.

McCain sounds like penchief. LMAO

tiptap
09-23-2008, 06:23 AM
patteeu, whose the more insulted?

BucEyedPea
09-23-2008, 06:27 AM
Neither candidate has a clue.
Even Reid says this is terra incognita for all.

patteeu
09-23-2008, 07:02 AM
patteeu, whose the more insulted?

I'd say McCain, and deservedly so. This accusation about McCain rings true to me. It's one thing that has always put me off about McCain. penchief is just a poster on a message board like myself. He isn't doing any harm with his rants and often they are entertaining.