McCain Details Plan For Fixing Wall Street

Says Fed Needs To Get Out Of Business Of Bailouts, Backs New Regulation And Government Action

(CBS/ AP)  The Federal Reserve needs to get out of the business of bailouts but government has a responsibility to act and defend the public interest, Sen. John McCain said Friday as he outlined his plan for stopping the floundering economy and crisis on Wall Street.

The Republican presidential nominee, in comments to the Green Bay Chamber of Commerce, said he hoped Congress would act soon and accused Democrat Barack Obama as being a Washington insider incapable of solving the problem. McCain has been in Congress for 26 years; Obama has served for almost four years.

McCain also said the Fed should get back to "its core business of responsibly managing our money supply and inflation" and he laid out several recommendations for stabilizing markets in the financial crisis that has rocked Wall Street and commanded the dialogue in the presidential campaign.

In an interview with CBS Minutes correspondent Scott Pelley to be aired on Sunday, McCain was asked if he thinks the country is in a recession.

"Sure. [but] technically, I don't know…Americans today don't care about what the, quote, 'technical term' is," McCain said. "Unemployment is up. Wages are down. Home foreclosures are incredibly high, the worst in many, many, many years. All of the indicators that affect the American family, unemployment being up - those people, they don't care whether technically we're in a recession or not. Fact is they're hurting and they are hurting very, very badly."

In a separate interview with 60 Minutes, Obama also agreed the country is in a recession.

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Watch interviews of McCain and Obama during a special edition of 60 Minutes, this Sunday at 7 p.m. ET/PT.

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The Fed engineered an $85 billion takeover of insurance giant AIG this week after seizing control of housing giants Freddie Mac and Fannie Mae. McCain said that to help return the U.S. to fiscal solvency, the powerful central bank should instead focus on shoring up the dollar and keeping inflation low.

"A strong dollar will reduce energy and food prices," McCain said to applause from the Green Bay Chamber of Commerce. "It will stimulate sustainable economic growth and get this economy moving again."

The Arizona senator again criticized Obama for ties to Freddie Mac and Fannie Mae and for advocating tax increases McCain said would "turn a recession into a depression."

Obama has said he would raise taxes on people making over $250,000 a year and would cut taxes on the middle class. McCain restated his claim that Obama had voted to raise taxes on people who make just $42,000 a year - a claim that has been widely debunked by nonpartisan fact check organizations.

McCain noted the Illinois senator had taken large campaign contributions from both Fannie Mae and Freddie Mac and that the one-time head of Obama's vice presidential search team, Jim Johnson, had received a multimillion-dollar severance deal after stepping down as Fannie Mae CEO.

"Maybe just this once he could spare us the lectures, and admit to his own poor judgment in contributing to these problems," McCain said of Obama.

McCain's campaign also released a new television ad Friday hitting Obama for his connection to Johnson.

The Arizona senator is correct when he says Obama is the No. 2 recipient of campaign money from employees of Fannie Mae and Freddie Mac. Obama has collected $126,349 from those sources, according to a compilation by the Center for Responsive Politics, second only to Senate Banking Committee Chairman Sen. Christopher Dodd, D-Conn., who has received $165,400. The ranking covers the period since 1989.

Obama on Friday said he backs giving "broad authority" to the Treasury Department to deal with the burgeoning credit crisis, but said he's not spelling out details of his own plans to avoid roiling the markets.

He said any recovery plan should be guided by not rewarding reckless business leaders. "What we have to do is make sure taxpayer money is not being used to bail out bad decisions," he said.

He refused to put a pricetag on a bailout he could support, but said it would not bar him from pushing for middle-class tax cuts that have been central to his campaign. "I think now more than ever we have to have the broad-based middle-class tax cuts," Obama said.

The plan McCain outlined also calls for creation of an early intervention system he called the Mortgage and Financial Institutions trust to help companies avoid bankruptcy, and keep people in their homes and protect their savings. McCain called for enhanced regulatory clarity and proposed reforms to prevent financial firms from concealing their "bad practices."

McCain has a long history of opposing government regulation and he has served on and been chairman of the Senate Commerce Committee, which has regulated - and deregulated - vast parts of the economy.

McCain said there is a confusing mix of regulatory agencies that were either lax in carrying out their responsibilities or at worst were guarding their "bureaucratic turf."

"We don't need a dozen federal agencies doing the job badly, we need the best federal agencies to do the job right," he said.

He also called Securities and Exchange Commission Chris Cox a "good man" but reiterated his view that Cox should step down or be fired, saying there needed to be greater accountability in Washington.

Alaska Gov. Sarah Palin, who introduced McCain, said "elements of a perfect storm" could come together "that will not be good for the future of America." She said those elements were high taxes, high gas prices and a dependence on foreign oil, too little courage in Washington and too much greed on Wall Street.

McCain blamed Obama for not taking action to stop the current financial crisis.

"The crisis on Wall Street started in the Washington culture of lobbying and influence peddling, and he was square in the middle of it," McCain said of Obama.

Throughout the week, McCain and Obama have tangled over which candidate is better to steer the U.S. out of its financial crisis. One investment giant, Lehman Brothers, collapsed this week and another, Merrill Lynch, was purchased by rival Bank of America for less than half its value.

[caliguy55]

To The Candidates and Congress:

I demand that any bailout of financial institutions and other entities with taxpayers'''' money include strict re-regulation of said institutions and strict congressional oversight of the agencies that are supposed to regulate these institutions and other entities. I demand that Congress not give the Bush Administration a blank check to accomplish this bailout with no strings attached. I''''d rather SEE NO BAILOUT AT ALL, rather than taxpayers footing the bill for those CEOs etc., who are waking away from this mess with millions of dollars.

I DEMAND THAT CONGRESS END THE PRACTICE OF CEOs RECEIVING COMPENSATION FAR IN EXCESS OF WHAT THEY''''RE WORTH AND THEN WALKING AWAY SCOTT FREE, WHEN THE INSTITUTIONS THEY MANAGE FAIL BECAUSE OF SHADY LENDING PRACTICES, ETC. AND, I DEMAND THAT ALL CEOs OF COMPANIES TO BE BAILED OUT BY TAXPAYERS UNDER PRESENT PLANS BE FORCED TO RETURN THEIR EXORBITANT COMPENSATION PACKAGES TO THE U.S. TREASURY TO HELP WITH THE BAILOUT NECESSITATED BY THEIR PRACTICES.

NOW, I know that Congress has a history of being spineless in the past, when faced with these situations. But, it''''s got to stop. Congress must stand up to the President and demand changes, especially when poor, little guys like me are being told we may have to give up some of our meager Social Security Benefits to save that system, which would not be necessary if Congress simply paid back the IOUs owed to the system. Obama/Biden 2008!!!

[simon9999-2009]

Prediction-

After the end of Sarah Mooseburger''s first term:
Dow 3000
Unemployment 20%
Foreclosures 25%
Twenty more major banks fail.

She''s re-elected in a landslide because she''s pro-choice and cute.

[clovisbuford]

Never fear Americans , John Mccain has the answer.John Mccain quoted in the sept /oct issue of "Contingincies" magazine "Here%u2019s what McCain has to say about the wonders of market-based health reform:
Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation."
Joihn Mccain is going to do for health care what republicans have done to our banking /financial system .what a success that is , I already feel better.cough

[DCropp]

What took Senator McCain so long to come around to the economic plan that Obama introduced in March?

In March, McCain was out fundraising all over the place. Obama introduced his economic plan and took aim at the economic crisis. McCain ridiculed saying the economy was strong and Obama was wrong. Now we know McCain was wrong.

[misha128-2009]

McCain flip-flops on Social Security -- now he doesn''t want to privatize it. Truth or lie just to get elected? Another position he will change a week after he is elected? Just like Gov Palin cancelled the Bridge she promised to build as a candidate?

McCain wants to deregulate Health care just like the financial markets. Is this his first step in a national health insurance plan; when he has to bail out the health insurers just like AIG or the banks? Would it not be cheaper to nationalize health care in a direct planned manner before such a catastrophe?

[cbsblogger]

The Fed with its loose money policy under Greenspan reduced interest rates so low that it totally discouraged savers, and encouraged consuming and increasing debt. That was the Bush philosophy....keep consumers spending and buying at all costs and not saving. They''ve even made US Savings much less attractive for savers in the last year. Google: savings bonds less attractive

[prudentvoter]

Let me tell you this my friends. John McCain is brain dead. Anybody that listens to him, must also be brain dead.

[im4honesty]

McCain: "The fundamentals of the economy are strong."

THE NEXT DAY:

"Well, ummm, well, let''s see... here''s the deal, the fundamentals of the economy are the working men and women of America and if you disagree with me you are against the average American."

LMAO!!!

ARE YOU STUPID ENOUGH TO VOTE FOR McCAIN/PALIN???

[im4honesty]

McCain: "The fundamentals of the economy are strong."

THE NEXT DAY:

"Well, ummm, well, let''s see... here''s the deal, the fundamentals of the economy are the working men and women of America and if you disagree with me you are against the average American."

LMAO!!!

ARE YOU STUPID ENOUGH TO VOTE FOR McCAIN/PALIN???

[im4honesty]

McCain: "The fundamentals of the economy are strong."

THE NEXT DAY:

"Well, ummm, well, let''s see... here''s the deal, the fundamentals of the economy are the working men and women of America and if you disagree with me you are against the average American."

LMAO!!!

ARE YOU STUPID ENOUGH TO VOTE FOR McCAIN/PALIN???

[prudentvoter]

Let me tell you this my friends. John McCain is brain dead. Anybody that listens to him, must also be brain dead.

[scorpio59er]

John McCain has suddenly become a crusader against the excesses of Wall Street that his "free market good, government bad" philosophy caused!

Incredible.

[hypnotoad72]

I certainly agree, raising taxes on us would be a bad move. Many are having a tough enough time making ends meet.

[joelewiz75]

McCain seems to have forgotten all the lessons, "mistakes," and poor jugdement he showed during the Keating Five scandal. This guy who would pretend to be a "reformer" and who by his own words and previous record is a deregulator has been down this road before. Then it was the S&L industry and Keating corruptly swinding little old ladies and men of their savings to prop up shady managment practices. The resultant S&L scandal cost many people their life''s savings, the collapse of 747 S&L''s and the US Taxpayer $124,000,000,000.00. He abeited Charles Keating in skirting an investigation and regulators that resulted in a financial collapse and now he wants to credibly weigh in on a similar failure and offer his solutions. This road is familiar territory for someone who was officially admonished for Poor Judgement" in giving the appearance of pressuring regulators from investigating a consituent - a S&L that ultimately failed due to corrupt managament. McCain-Palin is not the change this country can afford... tax cuts, trickle down economics? Not after this $1,000,000,000,000.00 bail out bill for the US taxpayer. No Way, No How.. No McCain!

[joelewiz75]

McCain seems to have forgotten all the lessons, "mistakes," and poor jugdement he showed during the Keating Five scandal. This guy who would pretend to be a "reformer" and who by his own words and previous record is a deregulator has been down this road before. Then it was the S&L industry and Keating corruptly swinding little old ladies and men of their savings to prop up shady managment practices. The resultant S&L scandal cost many people their life''s savings, the collapse of 747 S&L''s and the US Taxpayer $124,000,000,000.00. He abeited Charles Keating in skirting an investigation and regulators that resulted in a financial collapse and now he wants to credibly weigh in on a similar failure and offer his solutions. This road is familiar territory for someone who was officially admonished for Poor Judgement" in giving the appearance of pressuring regulators from investigating a consituent - a S&L that ultimately failed due to corrupt managament. McCain-Palin is not the change this country can afford... tax cuts, trickle down economics? Not after this $1,000,000,000,000.00 bail out bill for the US taxpayer. No Way, No How.. No McCain!

[kansas1946]

Really. I would really like to know how John McCain is going to fix this mess, that he is in a big part repsonsible for. He has voted against any regulation of these companies, so their greed turned them into monster companies, and now since they got so big, we, you and me, have to bail them out.
John should have thought about that for the last 25 years while he has been voting against any control of them. Same thing that happend in 1929. No controlls over the money and it threw our country into a horrible decade of misery. John McCain has no clue about economics, only Republican idealology that doesn''t work. Hoover would have allowed the whole country to starve to death before dirtying his lily white "capitalist" hands.
Capitalism works well as long as the playing field isn''t rigged. John McCain and his party hav rigged the playing field against average Americans and now he wants us to trust him to fix it. Not a chance, bud.

[kansas1946]

Really. I would really like to know how John McCain is going to fix this mess, that he is in a big part repsonsible for. He has voted against any regulation of these companies, so their greed turned them into monster companies, and now since they got so big, we, you and me, have to bail them out.
John should have thought about that for the last 25 years while he has been voting against any control of them. Same thing that happend in 1929. No controlls over the money and it threw our country into a horrible decade of misery. John McCain has no clue about economics, only Republican idealology that doesn''t work. Hoover would have allowed the whole country to starve to death before dirtying his lily white "capitalist" hands.
Capitalism works well as long as the playing field isn''t rigged. John McCain and his party hav rigged the playing field against average Americans and now he wants us to trust him to fix it. Not a chance, bud.

[rochest]

you call this a plan? all I hear is glittering generalities lots of finger pointing and name calling about how we got here---greed on Wall Street, casino mentality, etc. yes its the point fingers but very hard to lead the way forward . this is not a plan and I really believe Obama when he says after outlining basic principlesand supporting the current resolution of the crisis that We need to stay out of the way to so as not to roll the market''s further ....and he continues to support the middle-class tax cuts and only increase the tax of folks would make over 250,000 mostly by adding their income at the over 250,000 marks to Social Security ... where as Senator McCain would fix Social Security by allowing Privatization in the form of stock investment accounts .... so I wonder how they would do this week? continues to be a nonstarter for me.

[karela33]

In March McCain bragged to the Wall Street Journal that they would never interview anyone who was stronger on deregulation than he is. He''s been in Washington twenty six years fighting for the exact thing that has brought our economy to it''s knees and now he wants us to trust him? The republican policies of removing regulation and over sight have been around a long time, but they didn''t get to really enact them at this level until they took the White House, the Senate and the House in 2006. They worked furiously to put all this mess in place for six years and then two more years of senate filibusters and White House vetoes prevented any correction. McCain''s long time go to guy for the economy has been Phil Gramm who a month ago called this a mental recession and said we were whiners. Obama has been warning us and trying to enact safeguards--that were blocked by republicans--since 2006. Obama has intelligence, but more than that, he has vision. He looks down the road and sees the train and begins to apply the brakes on the bus. McCain doesn''t see the train. He talks to the wrong people on the bus. And he doesn''t know what brakes are for until after the train hits the bus. Boy do we need a change!

[avembe]

ONce again, i thought the Reps wanted less government!!!!!!
Completely, definitely stupid!!!!!!!!