White House ’08: The candidates on the AIG bailout

Analysis by Chris Graham
freepress2@ntelos.net

Tracking the statements from Barack Obama and John McCain on the AIG bailout:

– “Today, the government was forced to commit $85 billion to stop the collapse of AIG, another in a growing series of events that includes Bear Stearns, Lehman Brothers, Fannie Mae and Freddie Mac,” McCain said. “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. We must not bail out the management and speculators who created this mess. They had months of warnings following the Bear Stearns debacle, and they failed to act.

“We should never again allow the United States to be in this position,” McCain said. “We need strong and effective regulation, a return to job-creating growth and a restoration of ethics and the social contract between businesses and America. Important questions remain to be answered by Wall Street. Did executives mislead investors and regulators about the severity of the problem? We must investigate whether or not there was misrepresentation on part of the company executives. If there was, there must be penalties. We need to change the way Washington and Wall Street does business, and as president I will.”

– “The fact that we have reached a point where the Federal Reserve felt it had to take this unprecedented step with the American International Group is the final verdict on the failed economic philosophy of the last eight years,” Obama said. “While we do not know all the details of this arrangement, the Fed must ensure that the plan protects the families that count on insurance. It should bolster our economy’s ability to create good-paying jobs and help working Americans pay their bills and save their money. It must not bail out the shareholders or management of AIG.

“This crisis serves as a stark reminder of the failures of crony capitalism and an economic philosophy that sees any regulation at all as unwise and unnecessary. It’s a philosophy that lets Washington lobbyists shred consumer protections and distort our economy so it works for the special interests instead of working people; a philosophy that says we should give more and more to those with the most and hope that prosperity trickles down to the rest,” Obama said.

“Instead, the pain has trickled up – from the struggles of Main Street all the way up to the crises on Wall Street,” Obama said.

“Despite his eleventh-hour conversion to the language of reform, Senator McCain has subscribed to this philosophy for 26 years in Washington and the events of this week have rendered it a colossal failure. It is time for a new economic strategy, guided by the principle that America prospers when all Americans prosper, where common-sense rules of the road ensure that competition is fair, open, and honest. That is the strategy I will pursue as president, and I will bring the change we need to restore confidence in our financial markets and strength to our economy,” Obama said.

Those were the opening statements.

– “When AIG was bailed out, I didn’t like it, but I understood it needed to be done to protect hardworking Americans with insurance policies and annuities. Sen. Obama didn’t take a position. On the biggest issue of the day, he didn’t know what to think. He may not realize it, but you don’t get to vote present as president of the United States,” McCain said.

“While Sen. Obama and Congressional leaders don’t know what to think about the current crisis, we know what their plans are for the economy,” McCain said. “Today Sen. Obama’s running mate said that raising taxes is patriotic. Raising taxes in a tough economy isn’t patriotic. It’s not a badge of honor. It’s just dumb policy. The billions in tax increases that Senator Obama is proposing would kill even more jobs during tough economic times. I’m not going to let that happen.

“I have seen tough times before. I know how to shake-up Wall Street and Washington. I will get this economy moving. I will lead us through this crisis by fighting for you, and when I am President we will be stronger than ever before,” McCain said.

– “Considering the fact that John McCain flatly opposed the bailout of AIG a day before he changed course and supported it, we’re not sure why on earth the McCain campaign wants to have a debate about economic indecision. Barack Obama does not second-guess the Fed’s decision to take unprecedented action to prevent the failure of one of the largest insurance companies in the world from creating an even larger crisis, and he believes it must protect families who count on insurance,” said Obama-Biden campaign spokesman Bill Burton.

Analysis: McCain tried to paint his comments on the AIG matter as being more decisive, but you don’t have to look hard at the words of the two side by side to see that they match up more than either would want to admit.

McCain: “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. We must not bail out the management and speculators who created this mess. They had months of warnings following the Bear Stearns debacle, and they failed to act.”

Obama: “The Fed must ensure that the plan protects the families that count on insurance. It should bolster our economy’s ability to create good-paying jobs and help working Americans pay their bills and save their money. It must not bail out the shareholders or management of AIG.”

McCain: “We need strong and effective regulation, a return to job-creating growth and a restoration of ethics and the social contract between businesses and America. Important questions remain to be answered by Wall Street. Did executives mislead investors and regulators about the severity of the problem? We must investigate whether or not there was misrepresentation on part of the company executives. If there was, there must be penalties. We need to change the way Washington and Wall Street does business, and as president I will.”

Obama: “It is time for a new economic strategy, guided by the principle that America prospers when all Americans prosper, where common-sense rules of the road ensure that competition is fair, open, and honest. That is the strategy I will pursue as president, and I will bring the change we need to restore confidence in our financial markets and strength to our economy.”

McCain’s attempt to play this issue as being evidence of his decisiveness vis-a-vis Obama’s indecisiveness falls flat.


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