Wednesday, September 17, 2008

McCain Gets it Wrong Before He Gets it Right on AIG Failure


If this happened to Barack Obama, it would be all over. But for John McCain, just another “change” feather to stick in his cap, and another wrong answer the press might be afraid to cover in fear of being tagged biased.

(Bloomberg) -- Republican presidential nominee John McCain said the U.S. government should let American International Group Inc. fail to prevent the financial burden from being placed on taxpayers.

``I think you have to, but I also know that there are great efforts being made to try to raise sufficient capital to keep AIG in business,'' McCain said in an interview with CNBC from Miami. Taxpayers shouldn't be held responsible for the bad performance of U.S. institutions, and ``the moral-hazard issue is something that we have to take head-on,'' he told the cable news channel. ``There is a risk of overregulation and overreacting. Congress has a tendency to do that, but to say this is just a blip on the radar -- this is serious.''

(AP) -- Republican presidential candidate John McCain, a day after flatly rejecting the idea of a taxpayer bailout for American International Group Inc., said Wednesday that the government had been "forced" into proposing an $85 billion loan to the nation's largest insurer.

McCain appeared to soften his opposition to the bailout proposed by the Federal Reserve, treating the plan as a necessary evil to protect ordinary Americans with finanical ties to AIG - and asserting that such a financial collapse should not be allowed to happen again.

"The government was forced to commit $85 billion," McCain said in a statement. "These actions stem from failed regulation, reckless management and a casino culture on Wall Street that has crippled one of the most important companies in America. The focus of any such action should be to protect the millions of Americans who hold insurance policies, retirement plans and other accounts with AIG," he added. "We must not bail out the management and speculators who created this mess."

Democratic rival Barack Obama blamed the Republican anti-regulatory fervor of recent years for part of the mess, saying the crisis is "a stark reminder of the failures of crony capitalism and an economic philosophy that sees any regulation at all as unwise and unnecessary."

McCain’s former financial advisor (they still share the same values), Phil Gramm is a guy Democrats and Obama should remind voters of day after day after day…

Alan Colmes wrote at his blog liberaland,

Phil Gramm, whose deregulatory banking policies led to the economic turmoil we’re now experiencing says what we’re going through is a “mental recession” because we’re “a nation of whiners.” Gramm is a top economic advisor to John McCain, but the McCain campaign is distancing itself from his comments.

Phil Gramm, whose deregulatory banking policies led to the economic turmoil we’re now experiencing says what we’re going through is a “mental recession” because we’re “a nation of whiners.” Gramm is a top economic advisor to John McCain, but the McCain campaign is distancing itself from his comments.

"We've never been more dominant; we've never had more natural advantages than we have today," he said.

You've heard of mental depression; this is a mental recession," he said, We have sort of become a nation of whiners," he said. "You just hear this constant whining, complaining about a loss of competitiveness, America in decline" despite a major export boom that is the primary reason that growth continues in the economy, he said. "Misery sells newspapers," Mr. Gramm said. "Thank God the economy is not as bad as you read in the newspaper every day."

I’m not sure God was listening. It seems things aren’t “as bad as you read in the newspapers everyday.”

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