Update II:
Congress, Bush team OK bailout terms; Stocks sinkUpdate: From
ThinkProgress:
Question: 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
"
You hear that implosion reverberating through financial markets? It's the sound of decades of conservative ideology collapsing," says Jared Bernstein.
Bernstein could well have said "neo-liberal" ideology as
the 1999 repeal of the Glass-Steagall Act, after 12 legislative attempts in 25 years (
FrontLine), among other policy and unaddressed market changes, led the way to this epic collapse with Democratic acquiescence..
But Obama has clean hands on this. Not McCain.
The repeal of Glass-Steagall "
allows for the merging of banks, securities firms, and insurance companies into huge financial conglomerates," as FrontLine notes.
McCain has been an anti-regulatory advocate for decades.
It is interesting to note, though, that on a critical vote on the
S.900: Financial Services Modernization Act of 1999, (that led to the repeal of Glass-Steagall) McCain was the sole Senator not voting on the bill that passed 90-8-1-1.
What's up with that? Was McCain still smarting from his associations with the Keating Five 10 years earlier. Likely.
Senator Obama recently issued his
Statement of Principles for the Treasury Proposal. The man sounds a lot like a New Dealer (that's a good thing).
And a reformer calling for a different regulatory framework from neo-liberal and conservative orthodoxies is a good very thing.
Note his "regardless of how we got here," lede-in in second graf:
Statement of Principles for the Treasury ProposalThe era of greed and irresponsibility on Wall Street and in Washington has led to a financial crisis as profound as any we have faced since the Great Depression.
But regardless of how we got here, the circumstances we face require decisive action because the jobs, savings, and economic security of millions of Americans are now at risk. We must work quickly in a bipartisan fashion to resolve this crisis and restore our financial sector so capital is flowing again and we can avert an even broader economic catastrophe.
We also should recognize that economic recovery requires that we act, not just to address the crisis on Wall Street, but also the crisis on Main Street and around kitchen tables across America.
But thus far, the Administration has only offered a concept with a staggering price tag, not a plan.Even if the Treasury recovers some or most of its investment over time, this initial outlay of up to $700 billion is sobering. And in return for their support, the American people must be assured that the deal reflects some basic principles.
• No blank check. If we grant the Treasury broad authority to address the immediate crisis, we must insist on independent accountability and oversight. Given the breach of trust we have seen and the magnitude of the taxpayer money involved, there can be no blank check.
• Rescue requires mutual responsibility. As taxpayers are asked to take extraordinary steps to protect our financial system, it is only appropriate to expect those institutions that benefit to help protect American homeowners and the American economy. We cannot underwrite continued irresponsibility, where CEOs cash in and our regulators look the other way. We cannot abet and reward the unconscionable practices that triggered this crisis. We have to end them.
• Taxpayers should be protected. This should not be a handout to Wall Street. It should be structured in a way that maximizes the ability of taxpayers to recoup their investment. Going forward, we need to make sure that the institutions that benefit from financial insurance also bear the cost of that insurance.
• Help homeowners stay in their homes. This crisis started with homeowners and they bear the brunt of the nearly unprecedented collapse in housing prices. We cannot have a plan for Wall Street banks that does not help homeowners stay in their homes and help distressed communities.
• A global response. As I said on Friday, this is a global financial crisis and it requires a global solution. The United States must lead, but we must also insist that other nations, who have a huge stake in the outcome, join us in helping to secure the financial markets.
• Main Street, not just Wall Street. The American people need to know that we feel as great a sense of urgency about the emergency on Main Street as we do the emergency on Wall Street. That is why I call on Senator McCain, President Bush, Republicans and Democrats to join me in supporting an emergency economic plan for working families – a plan that would help folks cope with rising gas and food prices, save one million jobs through rebuilding our schools and roads, help states and cities avoid painful budget cuts and tax increases, help homeowners stay in their homes, and provide retooling assistance to help ensure that the fuel-efficient cars of the future are built in America.
• Build a regulatory structure for the 21st Century. While there is not time in a week to remake our regulatory structure to prevent abuses in the future, we should commit ourselves to the kind of reforms I have been advocating for several years. We need new rules of the road for the 21st Century economy, together with the means and willingness to enforce them.
The bottom line is that we must change the economic policies that led us down this dangerous path in the first place. For the last eight years, we’ve had an “on your own-anything goes” philosophy in Washington and on Wall Street that lavished tax cuts on the wealthy and big corporations; that viewed even common-sense regulation and oversight as unwise and unnecessary; and that shredded consumer protections and loosened the rules of the road. Ordinary Americans are now paying the price. The events of this week have rendered a final verdict on that failed philosophy, and it is a philosophy I will end as President of the United States,” said Senator Barack Obama
