Watch CBS News

McCain Blames Recession On Wall St.

Candidate McCain, Part 1 15:50

Last year, few expected John McCain to be the Republican nominee - he was a lonely advocate of the surge in Iraq, and many Republicans didn't like a man so often at odds with his own party. This former Navy aviator and former POW fought his way to the nomination only to find himself, now, in the thick of the crisis on Wall Street.

Scott Pelley: If you were President of the United States tonight and you were going to make an address to the nation regarding this economic emergency, what would you say?

John McCain: I would tell the American people that we're in tough times. This certainly isn't a Great Depression, don't get me wrong - lay out the problem and the cause of the problem they're badly frightened right now. And we've gotta get their trust and confidence back.

Pelley: Should they be badly frightened?

McCain: I think they should be deeply concerned about the fact that innocent Americans that don't work on Wall Street and don't work in Washington are the victims of the greed, the excess, and, yes, in some cases, corruption. There's a social contract that Adam Smith talked about between capitalism and the people. That contract has been broken. It's been broken by greed and access, aided and abetted by a government in Washington that's dominated by special interests and corruption.

Pelley: Are we in a recession?

McCain: Sure. Technically I don't know. Unemployment is up. Wages are down. Home foreclosures are incredibly high. Those people, they don't care whether technically we're in a recession or not. The fact is they're hurtin'. And they are hurting very, very badly.

Pelley: In 1999 you were one of the senators who helped pass deregulation of Wall Street. Do you regret that now?

McCain: No, I think the deregulation was probably helpful to the growth of our economy.

McCain has been an advocate of deregulation most of his career, but Thursday he endorsed the biggest bailout in history - a plan for the government to take on the bad debts of financial institutions.

"We're gonna take over these bad loans. We're gonna take over these bad - these bonds and we're gonna keep you alive. And we're gonna have the taxpayer help you out. But when the time comes and the economy recovers then anything that's gained back is gonna go to the taxpayers first. I'm not saying this isn't gonna be messy. And I'm not saying it isn't gonna be expensive. But we have to stop the bleeding," the senator said.

Pelley: But why would you let the Wall Street executives…

McCain: I'm not.

Pelley: …sail away on their yachts and leave this on the American taxpayer?

McCain: Well, it's not the greedy Wall Street people that I worry about, although I am, like most Americans, frankly, enraged. It's basically a Ponzi scheme, as you know, that sooner or later was gonna collapse. And I'd like to get that money back from them. But we've gotta fix the average citizen who's the innocent bystander that is in danger of losing their pensions, their 401(k)'s, their IRAs. Their very life savings are at risk here.

Pelley: You have called for the firing of the head of the Securities and Exchange Commission, the federal government organization that oversees the markets.

McCain: Yes. You know, and by the way, that technically he can't be, quote, fired. But I'll tell you, when I'm president, if I want somebody to resign, they resign.

Pelley: I'm curious. If you wanna fire Chris Cox, the chairman of the SEC, who would you replace him with?

McCain: This may sound a little unusual, but I've admired Andrew Cuomo. I think he is somebody who could restore some credibility, lend some bipartisanship to this effort.

Pelley: He's a Democrat.

McCain: Oh, yes.

Pelley: He served in the cabinet of President Clinton.

McCain: Yes. And he did a good job. And he has respect. And he has prestige.

Pelley: You place a great deal of responsibility on this current emergency on the administration.

McCain: Yes. Yes

Pelley: This is the president of your party.

McCain: Yes, it is.

Pelley: Are you saying that the Bush administration has failed?

McCain: I say the Bush administration has failed. I say the Congress has failed, Democrats and Republicans. I remind you the Democrats have had the majority in Congress for the last two years. So everybody's failed. And the cozy, old-boy, special interests that have prevailed in Washington have harmed the American people, frankly, in the most terrible fashion.

Pelley: What are the differences between you and Senator Obama on taxes. In your plan, who gets a tax cut?

McCain: Well, in my plan everybody does.

Senator Obama's plan would cut taxes more than McCain for the middle class, but Obama would raise taxes for those making more than $250,000 a year. And last week, McCain turned up the temperature on the rhetoric.

"His tax increase along with the enormous federal programs he proposes are the surest way to turn a recession into a depression," McCain said.

Pelley: You and Senator Obama propose cutting taxes in different ways. But in the last few days the federal deficit broke all records.

McCain: Yes.

Pelley: It's now $400 billion that the federal government is in the red. Is it smart to cut taxes for anyone in this economic emergency with that kind of a deficit?

McCain: Well, number one, Scott, the worst thing you could do is raise taxes on anybody. And I don't know which iteration we are talking about of Senator Obama's. He's had four or five different positions on which taxes he would increase, which ones he wouldn't. I think the major point here is that spending got out of control. How many Americans know that the size of government increased by 40 percent in the last seven years? We Republicans for six of the eight years presided over the greatest increase in government since the Great Society. Republicans came to power to change Washington. And Washington changed us.

Pelley: But how do you cut the budget?

McCain: Oh, easy. Look

Pelley: That much.

McCain: Look, if you were able to increase the budget and the size of government by 40 percent, don't you think you could cut some of it?

Pelley: What are you gonna cut?

McCain: I think we'll frankly, you can eliminate so many agencies of government that are outmoded. Obviously I would scrub defense spending. Obviously we would look at every institution of government. I would stop these protectionist tariffs. I would stop subsidizing sugar.

Pelley: Did I just hear you say you're gonna cut the defense budget?

McCain: I think there's areas in defense where we can save a lot of money in cost over runs.

Early in the campaign, McCain told a reporter that the economy wasn't his strong suit. The Obama campaign picked that up. Pelley didn't ask about that quote, but it was clear in this interview that he's still sore about it.

Pelley: You're not an expert on the economy. Senator Obama is not an expert on the economy. So let me ask you what traits would you bring to the Oval Office that would help navigate this country out of the current emergency?

McCain: Never complain, but maybe I can explain. That statement about me and the economy was made in the context of a long conversation. Moral of the story is, don't have long conversations, especially with 60 Minutes. Point is, no seriously, is that I understand the economy as chairman of the Commerce Committee, which oversights all of the commercial aspects of America's economy. I've been involved in these issues for many, many years. I know the economy. I know how to fix it.

There were a number of surprises in our interview, including McCain's first mention of a radical change he says he would make in the White House.

McCain: I would move the political office out of the White House and into the Republican National Committee. I think we've gotta have a White House that is without politics.

Pelley: But the model of the last couple of administrations has been to have a political officer in the West Wing with the president, Karl Rove in the Bush administration, and to carry on a permanent campaign. The White House is always campaigning.

McCain: It's time to show the American people that politics will not be part of this massive effort we're gonna have to go on to restore our nation's economy.

Pelley: Senator Obama calls you President Bush's third term. What are the differences between you and President Bush?

McCain: Spending, conduct of the war in Iraq, climate change, treatment of prisoners, 9/11 Commission. There is a large number of issues that I have stood up to my party, not just the White House but to my party. Senator Obama has never once done that.

Pelley: What are the sharpest differences between you and Senator Obama?

McCain: Well, I think, first of all, working in a bipartisan fashion which Americans want us to do now. But most importantly, he wants to increase spending. And he wants to raise taxes. A fundamental philosophical difference between the most liberal member of the United States Senate, according to his voting record, and someone who I am, a proud conservative principled United States Senator. But one of the biggest areas of disagreement finally, could I just say, was over Iraq.

Iraq was nearly the end of the McCain campaign. 60 Minutes went there with McCain shortly after the surge was announced, when more than 60 percent of the American people were against it.

"I believe that we can succeed and I believe that the consequences of failure are catastrophic. Those who say just withdraw then you say what next?" McCain said at the time.

"I wonder at what point do you stop doing what you think is right and you start doing what the majority of the American people want?" Pelley asked the senator.

"Well, again, I disagree with what the majority of the American people want. Failure will lead to chaos, withdrawal will lead to chaos," McCain replied.

McCain: Many political pundits said my campaign was over. Senator Obama moved to the left of his party and said we shouldn't, said the surge would fail, said it was doomed to failure, and still fails to acknowledge that he was wrong about the surge.

The surge was a gamble back when McCain was low on support, out of money and expected to fail. Its success helped capture the nomination that once seemed so improbable. 60 Minutes caught him the moment he left the stage.

McCain: Hey Scott, how are you doing pal?

Pelley: I'm well, Senator. How are you? Senator, they wrote you off a year and a half ago.

McCain: Yeah, times change.

Pelley: And I wonder what you knew then that nobody else seemed to know?

McCain: Hope and optimism, hope and optimism. You know Scott, it was quite a wild ride and so we're very happy and we're very pleased, and Sarah has certainly been more than even we anticipated.

He didn't have to say her last name - Sarah Palin's celebrity has overshadowed his, even though she may be a gamble as risky as the surge.

Pelley: The criticism of Governor Palin is that she was a brilliant marketing choice for the campaign, but she's not well versed on the economy or foreign affairs.

McCain: Well, actually, the most popular governor in America so, and the largest geographically state. But the most important thing is…

Pelley: But foreign affairs and the economy, those are things that people are concerned about.

McCain: First of all, anybody who's governed a state has some economic experience. And by the way, she cut taxes. The second thing is she shares the world view that I have.

Pelley: Is it true you only met her a couple of times before you selected her?

McCain: I'd only known her a few times but a couple of times. But I had watched her very carefully. I had followed her career.

Pelley: How'd you make that decision?

McCain: Well, I based it on what's the best for the country. I looked at her record. I looked at her.

Pelley: In your judgment, can you see her as President of the United States?

McCain: Absolutely.

Pelley: As President of the United States?

McCain: Absolutely, absolutely.

Pelley: Senator Biden, Senator Obama's running mate, has done 84 interviews and news conferences by our count. And Governor Palin has done two. And I wonder why that is. There's a perception that you might be nervous about what she might say, that you're not putting her in front of reporters.

McCain: She's gonna be doing more all the time. She's, as you know, been introduced to the country. We're campaigning hard. Look, everybody that has met her and known her and the enthusiasm of these crowds, the American people are vetting her. And they're liking a lot what they're seeing.

Pelley: One of the things that Governor Palin did say in her first interview was that our NATO obligations might require us to go to war against Russia in defense of Georgia. Is that a position that you share?

McCain: Any nation this is a member of NATO - there's a clause that says an attack upon - on one has to be responded to.

Pelley: And you support NATO membership for Georgia?

McCain: I do. And I support it for Ukraine. And…

Pelley: But the Russian reaction to NATO membership for Georgia is likely to be pretty sharp they just invaded that country,

McCain: Regrettably, regrettably. But it doesn't mean that I am saying we are going to go to war with Russia. It does mean that we have to respond and it does mean that this kind of behavior on the part of the Russians is not behavior that we expect of a country that is a member of the world community.

In the wars that the U.S. is fighting today, McCain supports sending around 12,000 more troops to Afghanistan - another surge. He was reminded of the toll in Afghanistan before our interview when a woman at the airport gave him an envelope.

McCain: Just landed at the airport a couple hours ago. Woman was there. She handed me this envelope. Says, "My son, Staff Sergeant Patrick Lee Leibert, KIA, 21, June 2006, Afghanistan. Quote, please remember and support our troops in Afghanistan. God bless you. Cheryl Patrick

Pelley: KIA, killed in action.

McCain: Inside of it, of course, is the dog tag with Patrick's picture on it. That's what being President of the United States is all about.

Pelley: Would it be your policy in your administration to engage in preemptive war against a country that might pose a threat to the United States a country that hasn't attacked us.

McCain: If it's a provable direct threat. Suppose that the Iranians had nuclear weapons. And you had a whole lot of other information about Iranian intentions and you could make the case to the American people and to the world, I think it's obvious that we would have to prevent what we're absolutely certain is a direct threat to the lives of the American people.

The men running for president were shaped by profound but very different life stories. 60 Minutes spoke to each about the influences that made them who they are today.

John McCain will tell you he was a cocky, selfish and rebellious young man until he was shot down on his 23rd combat mission. 60 Minutes went home with McCain to Arizona and he told us about something he rarely brings up: religious faith, and how it saved him in Vietnam.

John McCain: I think part of it is a bit private, obviously. But, I also haven't been reluctant to tell various things that have happened in my life, including the fact that my faith is why I'm here today. And my faith sustained me in the most difficult times where I didn't ask for another day or another hour, but for another minute. And so I try to show people that I have the utmost faith in this country, which was founded on Judeo-Christian values. And those are my values.

Scott Pelley: You know, you've written this about your father: "My father didn't talk about God or the importance of religious devotion. But, he did pray aloud on his knees twice a day." Is that you?

McCain: Yeah, but, I'm not sure as good a man as my father. My father struggled with alcohol all his life. And he really used his religion as a valuable tool in combating this disease. And it is a disease. And it was so tough on him when I was gone. When I was in prison and he was in the commander in the Pacific and he ordered the bombing of Hanoi.

Pelley: When you were there?

McCain: When I was there. That's tough on a father. But, I do believe that when you look back at my history, it's just remarkable that with all the things I've been through that I'm still here. And I interpret that as an opportunity to serve a cause greater than my self interest.

In late August, 60 Minutes met McCain in Arizona and he showed us around the home where he gets away from it all, down in a beautiful canyon near Sedona.

Pelley: Where do you do your clearest thinking?

McCain: Right here, right here and I hike across that creek and go right across there very easily and then hike up on onto that mountain on top of that mountain there, and its kind of a hard hike cause there's no trail.

Pelley: And from this place you get what?

McCain: Inspiration and balance and patience and all the things you need.

Pelley: You were born in the Panama Canal Zone because your father was stationed there. Where'd you live as a kid?

McCain: Well, we lived in San Diego, we lived in Norfolk, Virginia. We lived in the Washington D.C. area. We lived in New London, Connecticut. My dad was a submariner.

Pelley: Longest you've lived any one place?

McCain: Hanoi. Hanoi was the longest- I lived any place, five and a half years.

Pelley: When you were in prison?

McCain: Yup, yeah, I certainly don't wanna call that my hometown.

McCain is third generation Navy, his father and grandfather both admirals. He graduated from the Naval Academy, but just barely.

McCain: Fifth from the bottom of my class, yeah. My old company officer, marine captain were here today he'd say in America anything is possible.

Pelley: What was that? Was that the women? Was that the booze? Was it just rebellion?

McCain: Oh you know, people overdraw the quote, women and booze thing. The fact is that I was pretty rebellious. And I was immature. I was sort of fighting against the tradition. I also didn't take well to the discipline. But I had wonderful and dear friendships. I got the tradition and duty and honor and country that you're imbued with at the Naval Academy…is really an important part of my life.

Pelley: As we sit here toward the end of August, next week is your birthday. 72 years old.

McCain: Thanks for bringing that up.

Pelley: It's not a sore subject with you, is it senator?

McCain: No, no-I'm just, you know Scott I'm the luckiest guy that you will ever, ever be with. Fifth from the bottom of my class as we've discussed, several plane crashes, several narrow escapes, several stories that just defy the imagination. I'm the most fortunate person you'll ever interview and I appreciate it every single day.

Produced By Tom Anderson

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.