WASHINGTON: Both US presidential candidates were riveted on Wall Street finances as their campaigns sought to address the bankruptcy of Lehman Brothers investment firm and the huge point plunge by the Dow this week.
Given the trauma on Wall Street since Monday, it was not too big a surprise to see presidential campaigns of both major parties issue statements on the developments.
On the campaign trail Monday, John McCain, the Republican presidential nominee, said that the US economy’s underlying fundamentals remained strong but were bring threatened “because of the greed by some based in Wall Street and we have got to fix it.”
Barack Obama, the Democratic presidential candidate, pounced on McCain’s remark that “the fundamentals of our economy are strong.” In a television ad released yesterday, Obama’s campaign asks: “How can John McCain fix our economy if he doesn’t understand it’s broken?”
McCain sought to parry his earlier comment by defining the fundamentals of the economy as American workers and said that these fundamentals were in crisis.
McCain would craft Wall Street reforms based on several principles including better corporate governance, consumer protection, a “derivatives clearing house” and an effective safety and soundness regulator for every financial institution, a senior adviser to the Arizona senator said yesterday.
The Arizona senator called for a review of the financial crisis along the lines of the one led by the Sept. 11 commissions. That bipartisan panel studied the events leading to the 2001 terrorist attacks and recommended changes to avert another attack.
McCain is trying to sell himself to many voters as an agent for change, despite his party’s unpopularity after years of dominating in Washington, and despite his own anti-regulation stances of past years.
Obama began speaking about financial regulation in March 2007, when he warned of the coming housing crisis and a year later in a speech in Manhattan he outlined six principles for overhauling financial regulation.
And he set out his general approach to financial regulation last March, when he called for regulating investment banks, mortgage brokers and hedge funds much as commercial banks now have oversight, said the New York Times yesterday.
Obama also said in March that he would streamline the overlapping regulatory agencies and create a commission to monitor threats to the financial system and report to the White House and Congress.
