Now that the federal government is bailing out financial institutions, are you feeling better? I thought not. Barack Obama and the Democrats should be embarrassed for following the Republican lead and caving in to the big banks. However, Obama and many in his party have offered proposals to benefit Americans outside Wall Street. Conversely, George Bush, John McCain, and the GOP seem determined to worsen the economic situation. Congressional Republicans successfully blocked Democratic efforts to allow bankruptcy judges to restructure mortgages and help people keep their homes. They also continue to lie about the causes of the financial crisis.
Republicans can’t admit that they triggered the economic meltdown by eliminating key regulations. In the financial Wild West created by three decades of GOP politicians and lobbyists (with an assist from Bill Clinton), mortgage companies were free to make bad loans and sell them to banks for top dollar. Rather than acknowledge the effects of his policies, McCain blames Christopher Cox, the chairman of the Securities and Exchange Commission (the government panel that oversees the stock market and securities trading). McCain thundered that Cox was “asleep” as the crisis unfolded and called for his resignation.
Of course Cox was asleep. You don’t get appointed to a regulatory job by George W. Bush if you intend to do any regulating. Cox spent his career in Congress helping big business avoid accountability. His main legislative “achievement” was a law that made it much more difficult for stockholders to sue corporate executives for fraud. The law assisted the crooks at Enron, but Cox’s role in creating that mess didn’t stop Bush from appointing him to head the SEC in 2005. The SEC chief did exactly what Bush and McCain wanted. But, now, the Republican nominee offers Cox as a target for voters’ anger, expecting Americans to believe that administrative incompetence, rather than destructive right-wing ideology, is to blame for this disaster.
McCain hasn’t learned anything from the failure of his economic philosophy, but he knows he can’t win the election without pretending to be a changed man. Since last month’s stock-market drop, the Arizona senator has been trying to cover up the first two letters of the “Deregulator” badge he’s been wearing since 1982. Now, he rails against Wall Street greed and even promises to use federal money to buy up bad housing loans, a tactic he would have labeled “communist” a short while ago. Putting aside McCain’s obvious opportunism, his loan-rescue plan is still badly flawed. He hasn’t explained how the costs of the loans will be determined. Will the government simply pay whatever lenders want? Thanks to deregulation, including the “Financial Services Modernization Act” drafted by McCain’s economic guru, Phil Gramm, many mortgages have been chopped up and spread across different investment packages with multiple owners. How would McCain reassemble those jigsaw-puzzle mortgages and prevent the different owners from jacking up the price? Again, he doesn’t say.
If the Republican nominee appears to be flailing, and if his proposals seem half-baked, that’s because he never saw this problem coming. It was only last month that he said, “The fundamentals of our economy are strong.” When asked later about that ridiculous statement, McCain resorted to one of his cheapest tricks yet. He explained that by “fundamentals,” he meant “workers” and “small business.”
That’s flattery at its most disgusting. If McCain admires American workers so much, why is he opposed to providing health care for the millions of hard-working people who can’t afford it? Why does he want to tax health care benefits, further driving up costs for those least able to pay? Why does the senator oppose the right to form a union? What about his support for tax breaks given to companies that move factories overseas? McCain likes workers the way Dracula likes sleeping blondes with high-iron diets.
The financial crisis reveals the absurdity of GOP policies, including those still on the drawing board. For example, there’s Bush and McCain’s scheme to privatize Social Security and gamble that program’s funds on the stock market. The two pushed their privatization plan in 2005, but failed to get it through Congress (that time anyway). That’s a damn good thing too: under Bush’s proposal, big drops in stock prices mean steep benefit cuts for retirees. The market has lost about 25% of its value over the past two years, so you can imagine what would happen if we had a similar crash during an age of privatized Social Security.
Some have claimed that Bush and McCain have no response to America’s economic woes, but that isn’t true. It’s just that their policies always make things worse for everyone but the rich.