Thursday, September 18, 2008

John McCain, "The Greatest Deregulator".

The US economy seems to be coming apart at the seams. The Federal Reserve recently announced its latest bail-out- the AIG Corporation. The Reserve has offered an $85 billion loan to be paid back over the course of the next two years. Of course this comes on the heels of government rescues of other private corporations like Bear-Stearns and Fannie Mae/Freddie Mac (which readers of this blog certainly do not have to be reminded of). It's interesting to note that previous to this latest action, federal officials importuned the private sector to come up with some funds to save a crucial cog in its machine, but alas, when true saving is required it seems the government is always the fallback plan.

This is especially galling given that the private sector bemoans government intervention whenever they perceive it as a risk to their unfettered pursuit of short-term profits. I can't tell you how many times I've had to listen to armchair economists and "libertarians" extol the virtues of the Private Sector, and its vast superiority at meeting the needs of the American citizenry. These folks push for deregulation at every turn, and turn their heads when their Wall Street idols extend their hands for more taxpayer dollars to save their collective ass. The fact is that their self-interest always overwhelms their principles. When push-comes-to-shove they remind us that we are all "collectivists" when we are in trouble.

So the financial markets continue to make crucial mistakes that we are asked to pay for when times are bad, and then fight tooth-and-nail against giving anything back when things are going "well". When any politician even hints about raising corporate taxes, he/she is branded a "socialist", yet when "free market" adherents get themselves and the nation's economy into a crisis and require corporate welfare from the government, they are quick to remind us that "we are all in this together." I'm no expert in economics (and neither are you), but it doesn't take a genius to realize that we are getting bilked. There are very real individuals exploiting the myth that Capitalists can do no wrong.

These corporate pirates build their "house of cards" and resent anyone who wants to take a close look at its foundation. According to their worldview, government is corrupt and inefficient and has nothing to offer in its regulatory capacity. That's why a guy with a record like John McCain is so alluring for them. By his own admission, he doesn't know much about economics either. But he does have a solid record of being anti-regulation. His most notable bipartisanship effort was his membership in the Keating Five. That esteemed group of senators ignited a major scandal as part of the Savings and Loan crisis of the 80's. It cost the American taxpayer more than an estimated $180 billlion.

So John McCain does know a thing or two about the perils of relinquishing government oversight of crucial US financial markets. So why does he take such great pains to remind us that he is the "Greatest Deregulator"?* Besides the fact that it is the one time he seems to be telling the truth, it could have something to do with his top economic advisors. In the 1990's, Phil Gramm worked overtime as Chairman of the Senate Banking Committee to deregulate the banking and financial services industry. And then there is Carly Fiorina, whose biggest claim to fame so far is having been fired by Hewlett Packard for having engineered a failed merger with Compaq. Of course McCain mostly uses her to level charges of "sexism" against Barack Obama. But at least she admits that neither McCain or Palin have the executive experience to run a major corporation.





Bottom line- the "markets" are not going to sort themselves out. We need to start thinking on a longer-term basis. Neither John McCain nor his advisors can be trusted on the subject of the economy.


* “You are interviewing the greatest free trader you will ever interview, and the greatest deregulator you will ever interview

-John McCain, As Quoted in The Wall Street Journal, March 29,2007.

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