Jumat, 06 Agustus 2010

McCain is suddenly an economic populist

Talk about your battlefield conversions. With financial bombs going off all over the landscape, John McCain -- with rare exceptions a lifelong foe of government regulation -- has seen the light.

Where just last March he was telling The Wall Street Journal, "I am always for less regulation," now he is promising, though without saying just how, to end the "reckless conduct, corruption and unbridled greed" of Wall Street.

Coincidentally, it was in March, too, that Barack Obama, in his key economics speech at the Cooper Union in New York, pointed out the worsening consequences of the rash and reckless deregulations of recent years.

After the wreck of the mortgage markets, the Bear Stearns buyout and the collapse of the Fannies Mae and Mac into federal receivership, the swoon of insurance/investment megalith AIG, whose necessary federal rescue has put us all on the hook for $85 billion, finally got McCain's attention.

Where his closest economic adviser, former Sen. Phil Gramm, just weeks earlier had dismissed as a "nation of whiners" a public anxious about losing homes and jobs by the millions and seeing their 401(k) plans blitzed, the GOP candidate now rides as the champion of consumers and workers.

Getting all fiery, as he can do, McCain told a Tampa crowd, "Government has a clear responsibility to act in defense of the public interest."

It is a welcome turn to be sure but, goodness, an abrupt one.

In the 1990s, McCain supported, as luckily most senators did not, a proposed broad moratorium on any new government regulation. In '96, with only four other senators, he voted against a comprehensive reform of telecommunications on the grounds that it didn't deregulate the field enough. In '99, he supported legislation that removed regulations, dating to the Great Depression of the 1930s, that had kept banks and investment and insurance companies from poaching in one another's fields. The consequent muddling is a source of much of the current trouble.

Even where McCain has lapsed, he has tended to recant. After Enron and other accounting scandals, he supported strengthening the regulatory Sarbanes-Oxley Act -- then deplored the vote last year.

Although he is suddenly talking the language of economic populism -- for McCain, as unexpected as speaking in tongues -- it is not clear he yet quite gets what has happened. He focuses much of the blame on personal misbehaviors in business and government, rather than on a policy of indulgence that by making such behavior possible pretty much assured it would occur.

The president McCain most admires, Theodore Roosevelt, inveighed a century ago against "malefactors of great wealth" but, as well, acted against them with anti-monopoly legislation which broke up the trusts that were the target of his indignation.

McCain's new populism would be more credible if he showed that he understands it's not just errant business executives and indifferent or distracted regulators who are at fault. The turmoil today is far more the work of an ideologically rigid political philosophy -- more nearly radical than conservative -- which holds that even obviously prudent public oversight is an unacceptable affront to free-market purity, and the consequences be damned.

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