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Gerald McEntee

Gerald McEntee

Posted: September 23, 2008 11:58 AM

Fundamentally Wrong


On Monday of last week, John McCain discussed the economic crisis facing Wall Street before an audience in Jacksonville, Florida. Reflecting on the turmoil then engulfing the economy, McCain reassured the crowd that "the fundamentals of our economy are strong." It is a line he has used repeatedly throughout the past year. McCain spoke at the beginning of a week when the financial markets began to implode. Major American business institutions that had survived the Great Depression failed to survive the week, brought down by the mismanagement and excess of the Bush years. One might ask Senator McCain to explain why a country whose economy is fundamentally sound is now facing the greatest economic crisis in 70 years. And why are hard-working citizens being told to pick up a tab of $700 billion to pay for the huge mess that the greedy, Republican free-marketers have left after their disastrous experiment with "look the other way" regulatory policies?

Senator McCain wants to continue the experiment, this time on health care. Writing in the magazine of the American Academy of Actuaries, Senator McCain suggests that we should apply the same hands-off approach that he encouraged throughout the past decade on Wall Street to the health care industry. McCain wrote, "Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation." I am absolutely certain that the American people have had enough Republican-generated "innovative products" to last a lifetime. What we need is quality, affordable health care for all.

American families have already seen what unregulated corporate gurus can do to workers' pensions and investments, including their depleted 401(k) accounts, yet John McCain wants the insurance industry to enjoy the same kind of unregulated excess that he gave the investment bankers. We already know the havoc insurance companies can inflict on families - denying coverage and care - with the limited regulations they face today. As it is, they run roughshod over consumers. Why would John McCain want to make things worse?

Senator McCain talks tough about the economic disaster facing Wall Street and investors across the country, but his talk doesn't match the deregulation agenda he's pushed during his many long years in Washington. Yet, even when he's talking tough, he reveals how little he knows about the economy. Last week, as the depth of the crisis became clear, he said that if he were President, he would fire former Congressman Chris Cox, who George W. Bush appointed to head the independent U.S. Securities and Exchange Commission. Unfortunately, no one told Senator McCain that the U.S. President cannot fire the chairmen of independent agencies. That's why they are "independent." As chairman of the Senate Commerce Committee, you would think McCain would know this.

AFSCME has been leading the fight for shareholder "say on pay proposals," and we're battling to make sure that restrictions on excessive executive compensation are included in the bail-out legislation heading to Congress. John McCain says he thinks executive salaries are too high, but he hasn't done anything about it. On the campaign trail, he's taking on a populist tone: "That same executive got $21 million of your money," McCain said of Fannie Mae's CEO Jim Johnson. "And the other CEO [Frank Raines] . . . got $25 million of your money. Let's tell them to give it back. Let's tell them to give it back." Both Frank Raines and Jim Johnson were outrageously overpaid, but they were paid with shareholder funds, not tax dollars. It is shocking to learn that Senator McCain, who claims that his decades on the Commerce Committee is valuable economic experience, was unaware that until last week, Fannie Mae was owned by shareholders, not by taxpayers.

Senator McCain may not know the details of Fannie Mae's structure, but he should know more about his staff's close connection to the failed company. News reports today indicate that Washington lobbyist Rich Davis, Senator McCain's top campaign aide, was paid $30,000 a month for five years by Fannie Mae. It seems Fannie Mae paid that money to Davis because of his closeness to Senator McCain. Perhaps the senator should spare us his newly found populist rhetoric and simply fire Davis. While he's at it, he might ask him what he did to earn $30,000 a month. He might also ask him to "give it back."