McCain Enabled Our Economic Meltdown

By Robert Scheer, Truthdig. Posted September 18, 2008.

McCain voted for abolishing all of the significant rules put in place
at the time of the Great Depression designed to prevent a repeat.

Gag me with a spoon, as Valley girls used to say. Did you see that
McCain-Palin ad promising "tougher rules on Wall Street to protect
your life savings, no special interest giveaways"? Just how dumb do
they think we are?

Seriously, 20 minutes of Google searches should be sufficient to
convince all but the dimwits among us that John McCain has been a
master of the special-interest giveaways to Wall Street that enabled
this meltdown. He voted for abolishing all of the significant rules
put in place at the time of the Great Depression designed to prevent a
repeat. The two main bills accomplishing that, bills which McCain
enthusiastically supported, were the Commodity Futures Modernization
Act and the Gramm-Leach-Bliley Act. The Gramm is former Sen. Phil
Gramm, who was chair of the Senate Banking Committee when he acted as
chief sponsor of both pieces of legislation. The same Gramm that
McCain picked to co-chair his presidential campaign.

Gramm proved an embarrassment when he cavalierly insisted there was no
real crisis but only the panic of "whiners," but even on Monday as his
"Crisis" ad ran, McCain, in person, was still denying that there was
one. "The fundamentals of our economy are strong," he told NBC's Matt
Lauer, as two more of the nation's most venerable financial
institutions crashed and the stock market shed more than 500 points.
When a perplexed Lauer asked McCain to square his optimism with his
own ad's use of the crisis word, McCain came to his senses and,
discovering his inner Karl Marx, insisted he hadn't been speaking of
the bankers but rather was saying "that the workers of America are the
fundamentals of the economy."

OK, but never heard that from him before, as he consistently carried
water for the bankers going back to his supporting role in the savings
and loan scandal, a harbinger of the consequences of a severely
deregulated financial market that McCain still favors. Nor did he
worry then about the workers who lost their savings while McCain's
wife made a million in profit from her deal with Charles Keating, the
banker for whom McCain lobbied. Even on Tuesday, while McCain suddenly
was thundering against the "unbridled corruption and greed that caused
the crisis on Wall Street," he still did not urge anything more
stringent than convening a national commission.

Barack Obama has been way ahead of McCain in grasping the severity of
the problem and back in March offered a scorching criticism of the
deregulation mania, in particular the Gramm-Leach-Bliley law, which
allowed the stockbrokers, insurance companies and banks to merge for
the first time since the 1930s, ushering in this era of
irresponsibility. But that was in the primaries, and now he has turned
for advice to Robert Rubin and Lawrence Summers, who both served as
treasury secretaries in the Clinton administration and talked the
president into signing that wretched legislation.

As recently as Jan. 31, Rubin, by then Citigroup's executive committee
chair, was, like McCain until Tuesday, still in denial on the
meltdown, insisting it was merely "all part of a cycle of periodic
excess leading to periodic disruption." Fortunately, at that time he
was an adviser to Hillary Clinton and remained so past March 27, when
Obama delivered his main economic speech blaming for the meltdown the
Gramm deregulation that Rubin had helped make law. Referring to the
repeal of the Depression-era regulations, Obama stated all too
correctly: "Unfortunately, instead of establishing a 21st century
regulatory framework, we simply dismantled the old one -- aided by a
legal but corrupt bargain in which campaign money all too often shaped
policy and watered down oversight. In doing so, we encouraged a
winner-take-all, anything-goes environment that helped foster
devastating dislocations in our economy."

Not devastating for Rubin and Citigroup, where Rubin went to work, and
which was a leader in that $300-million lobbying effort and the first
huge beneficiary of the new law that permitted a merger with Travelers
Insurance that previously had been illegal.

So, yes, there is a world of difference between Obama and McCain on
the main issue that now challenges the American way of life, in which
people's homes, retirement, kids' college education and all other
dreams are threatened by a mindless deregulation led by the
Republicans but which too many influential Democrats supported. What
Obama needs to do, both to win and to help save the country, is
denounce the whole lot of those scoundrels from both parties and
rediscover his populist voice.

Robert Scheer is the co-author of The Pornography of Power: How
Defense Hawks Hijacked 9/11 and Weakened America.