McCain, Obama & Wall Street "Reform": The Good, Bad & Ugly
With the presidential campaigns issuing competing press releases about the weekend's Wall Street meltdown, it's instructive to step back from the partisan sniping, take a look at the empirical record, and therefore try to get a handle on who, in fact, would be better equipped to handle the crisis as president.
There are indeed good sides to both John McCain and Barack Obama's record when it comes to the issues this crisis involved - and there are, as well, bad and ugly sides, too. But once you look at the whole picture, it is clear who would be in a better position to deal with the meltdown.
THE GOOD: Both Candidates Have, At Times, Confronted Corporate Power
Though controversial to acknowledge among progressive circles, McCain has displayed fleeting flashes of populist courage at times during his career. As the Washington Post reported in January, McCain "Over the past decade, McCain has annoyed, aggravated and nearly destroyed some of the most powerful members of Washington's Republican establishment." That includes tangling with corporate lobbyists over campaign finance reform and prescription drug reimportation, and going head-to-head with Grover Norquist, who leads one of the most powerful corporate front groups inside the Beltway.
Put another way, the best thing about McCain heading into this crisis is that he has - at times - shown some modicum of courage in making the right enemies. And you better believe that in order to handle this economic catastrophe, the next president is not going to be able to make everybody - Wall Street bankers, shareholders, lobbyists and taxpayers - all happy. He is going to have to make some enemies.
Obama, in a shorter career, has shown more populist strength, and far more consistently than McCain who has subsequently tacked back to the Royalist Right in the 2008 presidential campaign (more on that below). As opposed to McCain, Obama has backed up his populism with Senate votes, racking up a reliably progressive record on economic issues and sponsoring legislation attempting to curb the influence of lobbyists. He also is far more comfortable publicly championing the cause of regulation than McCain, who during one of the first aftershocks of the credit crisis, initially proposed doing nothing at all.
That said, McCain has, at times, shown a stronger rhetorical zeal for discussing the crisis in accurately pugilistic terms than the more professorial Obama. Whereas the Illinois senator often tries to avoid full-throated populist language out of a DLC-ish desire to avoid confrontation with Big Money, McCain - ever the rhetorical junkyard dog - actually said, "Wall Street is the villain" in a nationally televised interview just a few months ago.
Most often, action and votes like those of Obama's are more important than McCain's mere words. But a presidency is nothing if not a bully pulpit, so it is at least good that both McCain and Obama are talking more tough.
THE BAD: Both Candidates Are Swimming In Wall Street Cash
The political ingredient that inhibits rhetorical populism from becoming legislative action is, of course, money. And both McCain and Obama have raked in an enormous amount of cash from the industries and specific companies at the center of the financial meltdown. The front page of the Washington Post's business section today tells the story better than anything: Next to coverage of the Wall Street meltdown, is a story about about how both campaigns are relying on corporate executives to "bundle" millions of dollars in campaign checks.
According to the Center for Responsive Politics, McCain has raised $6.8 million from "Securities & Investment" sources to Obama's $9.8 million. In fact, Obama has raised more than twice as much cash as McCain from employees of Lehman Brothers, the latest Wall Street firm to exacerbate the economic crisis.
That both candidates are so financially tied to the interests at the heart of this crisis bodes is both unsurprising, and disturbing - unsurprising in that Wall Street has long underwritten both parties, and disturbing in the persistence of the truism that says politicians typically hesitate to seriously regulate their biggest donors.
THE UGLY: Both Candidates Relying on Corporate Insiders As Top Advisers
What should worry us the most is how both candidates have decided not only to build campaign warchests with Wall Street cash, but to personally surround themselves with the very insiders who helped create the current financial crisis in the first place.
McCain's campaign, for example, employs an army of lobbyists representing the specific companies now helping pull down the American economy. As the Center for American Progress reports, McCain "has the former lobbyists of AIG, Merrill Lynch, Lehman Brothers, and Bank of America on his campaign staff."
Obama is far better than McCain in that he doesn't employ lobbyists who helped create the culture of corruption that compelled Washington to sit idly by as the economy tanked. However he does rely on a cadre of people who may be ideologically opposed to the forceful kind of New Deal populism that is going to be necessary to address the crisis.
For instance, Obama's top economic adviser is Jason Furman, a protege of Bob Rubin, the top executive of Citigroup - one of the main companies involved in the meltdown. Obama also continues to rely on Rubin for economic advice.
McCain's top economic adviser may be UBS vice-president Phil "Nation of Whiners" Gramm, but Obama's economic guru is UBS's Robert Wolf - Gramm's boss. It was Obama, in fact, who initially appointed a former Fannie Mae chairman and lobbyist, Jim Johnson, to spearhead his vice-presidential selection committee.
CONCLUSION: Obama Better Positioned, But Will Need Pressure
Despite the two candidates sharing similar ties to Wall Street, Obama is nonetheless better positioned to confront the crisis ahead, both because of his party structure, and his own personal history.
The central organizing force of the Republican Party is fealty to Big Business. While corporate front-groups have certainly impacted the Democratic Party, the party's progressive wing is ascendant. If that wing administers real pressure on Obama, it can successfully provide the political space and capital for Obama to pursue the more aggressive regulatory policies needed to quell this crisis.
Likewise, Obama's roots as a community organizer, civil rights lawyer and progressive lawmaker signal that at some deep level, he appreciates the value of confronting corporate power. By contrast, McCain's most famous experience dealing with the financial industry was his involvement in the Keating Five scandal. As the New York Times reports:
"Several former company executives, as well as current and former Senate Republican staff members, said Mr. McCain seemed to avoid matters related to the financial industry after the last major financial crisis -- the savings and loan crisis of the late 1980s. He was one of the 'Keating Five' senators investigated by the Senate, accused of interceding with federal regulators for the operator of a failing thrift."
Obama may not yet be as forceful as FDR and may not have yet articulated a New Deal, but McCain and his Keating Five past all but guarantees that the Arizona senator is no Teddy Roosevelt. While both candidates could be better than the current administration (that's not saying much), one is clearly better equipped to tackle this burgeoning emergency.
Cross-posted from Campaign for America's Future.
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I get the connection, Lehman Brothers raised more for Obama than McCain, Lehman Brothers is allowed to die. Politics and business is a dangerous game, real people get hurt. History will look back at this as criminal.
Good article, David, but I disagree that We, the People, will have any sway over a Pres. Obama. I base that pessimism on his response to our outcry during the FISA vote. It seemed to me that his response was, "Thanks for the calls and emails, but I've gotta do what I've gotta do." I did like your descriptive term "Royalist Right" and intend to use it everytime that I refer to the Royalist Republicans. I think all of us should adopt it to the point the Royalist Right becomes as much of a bitter descriptive as Liberal Left has become as a result of the Royalist Right!
I understood that Corporate money was going to McCain, while employees of those corporations were donating to Obama.
Exactly the kind of silly thinking that got us into this fine mess of snatching defeat from the jaws of victory. The corporations aren't giving money -- their employees are! It's just that their emplolyees are powerful and very wealthy and when they bundle their contributions it's a big check. Furthermore, they've have been giving to Obama since he started his primary campaign much like placing bets at the crap table. All of that swill during the primaries about how Obama was only getting money from the grass roots was just that -- so much swill. He was busy taking his big money from all of the same big money sources as was Clinton and everyone else but Edwards. You Obama supporters thought he was so pure and used that perspective to villify and crucify anyone but your savior. What really galled me was that he fostered that impression and now we've got a guy who may or may not be the change we've been waiting for and may or may not have the ability to get elected. Thanks a bunch!
You have integrity. One person called your comment informed. Obama has been getting portrayed too Good by the Huffington Post. One sided "SNL Syndrome vs. Hillary Clinton" Obama worship that is Dead and a Hollow Man.
This guy noticed the, "I like the structure of this article.", structure of the article. Only 7 SHEVA commented on this well written piece. Some great works are overlooked for hundreds of years. You overlooked that Obama is an Attorney.
Been up too late? Too much caffeine? This makes NO sense.
Does anyone still think that McCain is going to LEAD "his" administration? I don't. Not after watching him show zero leadership in this campaign.
Obama will surround himself with "the best and the brightest" and has the intelligence to sift through the advice he gets to make wise decisions.
The real question in a McCain administration will be: who is REALLY calling all the shots?
It seems likely to be the pack of corporate lobbyists and neo cons that surround him--aided in the PR/intimidation department by Rove protege Steve Schmidt.
I don't see any reason to think McCain will not be every bit as bad as Bush/Cheney for the economy--and maybe....even worse..
you are so right.. Remember these quotes, ' the candidate does not speak for the candidates campaign'. this is not an issue oriented campaign.. the economy is doing fine...
This is a man who opened up the chicken coop for the foxes and then said he didn't do it... and we are a bunch of whiners..
Republicans : 'Proof that Temptation Works bigtime
Loved the article!
Senator Dodd's statement following Freedie/Fanny takeover. Remember he and the democrats run the banking oversight committee and HE doesn't seem to know how, why, or what's the plan. You say Palin has no clue! Obama better positioned?! He would rely on these clueless idiots to give him advice since he has NO experience in anything as complex as running an economy.
“There are still many unanswered questions about the Administration’s plan, and Americans deserve to know if this unprecedented proposal will help keep mortgages affordable, stabilize the markets, and protect taxpayer interests. Furthermore, we need to understand the circumstances which led the Administration to change course. Just weeks ago, Secretary Paulson testified that he thought he would never use this authority – a message he reiterated until very recently.
“In the coming days, I will invite the architects of this plan to come before the Banking Committee to provide Members of Congress and the public with more information. This Administration has presided over the greatest financial crisis in 70 years. Americans need to know if this plan will alleviate, not deepen, our current economic problems.”
Excuse me-IF you had listened to Sen. Schumer (D) New York, the CHAIRMAN of the SENATE FINANCE COMMITTEE (they deal with BIG bucks) tonight, you would have heard him state that Phil "it's all in your head" Gramm was his predecessor. As SUCH, Sen. Gramm was THE ARCHITECT of the Banking Deregulation Legislation that LED to this crisis-disaster-recession-DEPRESSION. And Phil Gramm sits on McCain's campaign as his top economic advisor and HAS WRITTEN McCain's plan.
Do you REALLY BELIEVE that MR. Gramm will be shown the EXIT after the election Should McCain win? Do you really believe that these guys are gonna do ANYTHING to help you or your mother or grandmother or your dad or your granddad?
Franklin Roosevelt had a LOT of high finance backing and advisors-he went against his advisors more often than he went WITH them when he was attempting to deal with the massive Great Depression. If you say FDR is to blame for Fannie Mae and Freddie Mac I will scream! Yes, he set them up with a REGULATORY BODY overseeing their transactions. The BUSH ADMINISTRATION literally and systematically GUTTED AND DESTROYED any regulation of banking, the stock market, OSHA, the EPA, Health and Human Services, Education....These guys weren't just 'asleep at the switch' they were PULLING IT! Tricke DOWN has INDEED begun to TRICKLE BACK UP!!
Thanks to Mr. Sirota for not only pointing out Republican support for big business, irregardless of its effect on the public good, but for also acknowledging that oftentimes (or most times) the so-called leadership of the Democratic party, fails to represent the progressive ideals on which they were elected.
I am sure that fewer Americans have heard of S3001, the current all new improved pork laden defense authorization act, than have heard the phrase "lipstick on a pig".
But this and the other blank checks written by this so-called do-nothing Congress, bring into question if Mr. Obama's statement "Enough" will apply to his own party, or will it just be business as usual once the cheering dies down.
McCain voted for deregulation of the financial sector.Obama did not.
Obama has McCain flat on his back today ,but can he step on his neck?
The campaign needs to go balls out from here on.
I hope they don’t blow this opportunity to ram the economy down McSames throat.
It's also worth noting that GOP candidates are screened for ideological orthodoxy and manageability; McCain is much more beholden to his advisors than Obama is to his, owing to the way the parties work.
The Republican party seems to prefer figureheads to leaders these days, people that can be managed by their advisors.
From that view, McCain is bound to be more beholden to the financial elites, whereas Obama stands a better chance of working off of conscience. McCain seems like nothing so much as a man willing to ignore his own conscience these days; he was slugged hard in 2000 and now is a bit gunshy about going against his party.
It's evident to me who is better for this country economically.
The whole idea that John McCain is for more stringent regulation is a crock. His chief economic advisor is still Phil Gramm who wrote his economic platform and is the primary architect of de-regulation of the energy field and the mortgage field that has fgiven us high gas prices and the sub prime crisis. I have been listening to the McCain Cheerleader David Gregory tout McCain's call for more regulation. Its a no brainer for anyone talking about it from the left to throw Gramm at him. Gramm is the frontrunner to be the Treasury Secretary in a McCain cabinet. The democratic surrogate field is just pathetic in attacking the core of the McCain positions. All day long we should hear about how dishonorable McCain is and how his position on regulation is hypocritical and facetious. Without a killer instinct, the Dems will lose yet again!
MORE handwringing! A literal GIFT has been handed to EVERY Dem on this list and EVERY Dem in the campaign. Of course, if YOU choose to sit on the sidelines and make glum pronouncements-I won't stop you. "First they laugh at you ,then they fight you, then you win." Ghandi
I wouldn't vote for you to answer the likes of Carly Fiorina, but at least you could answer your neighbor about 'Obama's gonna RAISE taxes, ALL the taxes and we're all gonna be poor" line. What have you done for the Dem. campaign lately?
I like the structure of this article.
Examine a given issue, look at both candidates, what they say, what they do, who they are connected with and examine their records.
Of course this type of thing couldn't be done too often or people would start to understand just how far to the right of the spectrum that the Democrats have gone.
Back to money.
This is a great 47 minutes on our money system.
http://video.google.com/videoplay?docid=-9050474362583451279
"Start with things as they ARE-not as you would wish them to BE."
David,
Always enjoy your informed comments.
Now, duck!
You're right that Obama is better positioned overall, but his common weakness with McCain on "economics advisors" renders his advantage meaningless.
If he can't count on the Chicago/Harvard Business School grads to come up with a solution, then what is the advantage of his advantage?
We finally see G-psan admit what many of us have been saying for a while - "we have never been here before".
So, all those biz-school grads have wasted their pants and their pantsuits, studying the mechanics of a bygone age.
That's why you won't hear any of them come out and say, "I've got it".
Look out for the ResTrust-II gang who want to do an on the job script.
Watch out also for those "internationalize-ists" who REALLY represent the Trans-national Corporation solution for what ails America and the global economy.
Here are a couple of clues that are for real.
The CHICAGO PLAN that FDR put on the shelf.
The American Monetray Institute plan for US legislation.
The New Economics Foundation treatise on Creating New Money.
Let's geton with the quiet revolution.
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