John McCain’s radio: Jab at Obama
“Good morning. This is John McCain, speaking to you from Green Bay, Wisconsin.
Here and all across our country, people are wondering what exactly is happening
on Wall Street. And with good reason, they want to know how their government
will meet the crisis. Clear answers are hard to come by in Washington.
There are certainly plenty of places to point fingers, and it may be hard to pinpoint
the original event that set it all in motion. But let me give you an educated guess.
The financial crisis we’re living through today started with the corruption and
manipulation of our home mortgage system. At the center of the problem were
the lobbyists, politicians, and bureaucrats who succeeded in persuading Congress
and the administration to ignore the festering problems at Fannie Mae and Freddie Mac.
These quasi-public corporations led our housing system down a path where quick
profit was placed before sound finance. They institutionalized a system that
rewarded forcing mortgages on people who couldn’t afford them, while turning
around and selling those bad mortgages to the banks that are now going bankrupt.
Using money and influence, they prevented reforms that would have curbed their
power and limited their ability to damage our economy. And now, as ever, the
American taxpayers are left to pay the price for Washington’s failure.
Two years ago, I called for reform of this corruption at Fannie Mae and Freddie Mac.
Congress did nothing. The Administration did nothing. Senator Obama did nothing,
and actually profited from this system of abuse and scandal. While Fannie and Freddie
were working to keep Congress away from their house of cards, Senator Obama
was taking their money. He got more, in fact, than any other member of Congress,
except for the Democratic chairman of the committee that oversees them.
This is the problem with Washington. People like Senator Obama have been too
busy gaming the system and haven’t ever done a thing to actually challenge the
system. The crisis on Wall Street started in the Washington culture of lobbying
and influence peddling, and he was square in the middle of it.
The financial services industry — and there are many honest and honorable people
who work in it — plays a vital role in our economy. Yet it’s clear financial firms
have lost the trust of the American people. Government has a clear responsibility
to act and to defend the public interest. That is exactly what I intend to do.
First, to deal with the immediate crisis, I will lead in the creation of the Mortgage
and Financial Institutions trust — the MFI. The underlying principle of the MFI or
any approach considered by Congress should be to keep people in their homes
and safeguard the life savings of all Americans by protecting our financial system
and capital markets. The MFI is an early intervention program to help financial
institutions avoid bankruptcy, expensive bailouts and damage to their customers.
This will get the Treasury and other financial regulatory authorities in a proactive
position instead of reacting in a crisis mode to one situation after another.
Second, I will propose and sign into law reforms to prevent financial firms from
concealing their bad practices. Americans have a right to know when their jobs,
pensions, IRAs, investments, and whole economy are being put at risk by the
recklessness of Wall Street. And under my reforms, that fundamental right
will be protected.
Third, we need regulatory clarity. The current system promotes confusion,
encourages bureaucratic infighting and creates incentives for financial firms
to cut corners. We don’t need a dozen federal agencies doing the job badly
— we need the best federal agencies to do the job right.
Fourth, our regulatory system must protect consumers and investors by
punishing individuals who engage in fraud, break contracts, or lie to customers.
On my watch, the consequences for corporate abuse will not be more enrichment,
but more likely an indictment.
Fifth, in cases where failing companies seek taxpayer bailouts, the Treasury
Department will follow consistent policies in deciding whether to guarantee
loans. It must have well developed remedies for a financial crisis.
With billions of dollars in public money at stake, it will not do to keep
making it up as we go along.
Finally, the Federal Reserve should get back to its core business of responsibly
managing our money supply and inflation. It needs to get out of the business
of bailouts. The Fed needs to return to protecting the purchasing power
of the dollar. A strong dollar will reduce energy and food prices. It will
stimulate sustainable economic growth and get this economy moving again.
All of these measures will calm and help us to avoid future panics and
disasters in the financial markets. And great reforms on this scale will
require the best in the leadership of both political parties. We face very
serious problems in the financial markets, and partisan bickering will get
us exactly nowhere. It took members of both parties to get America
into this mess, and it will take all of us, working together, to find a way out.