How Bush and McCain bankrupted the U.S.
As recently as a few months ago, when it was already clear that the financial markets were in turmoil, Bush was trying to continue his do-nothing economics. "The President's hands-off attitude is reminiscent of Herbert Hoover in 1929 and 1930," Sen. Charles Schumer (D-NY) said in March. Last year, Bush was telling reporters that he wasn't very good at economics since he received only a "B in Econ 101" (in reality, he received the equivalent of a C-). However, this hands-off approach is what has propelled the current financial crisis. According to the Washington Post, both Republican and Democratic lawmakers alike "said the crisis is in part a result of insufficient government regulation on Wall Street." "Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke need to face squarely the vast array of mistakes made by the Bush administration's financial regulators over the past eight years," notes Jakabovics. Last year, instead of aggressive measures to help home mortgage borrowers, lenders, and investors work out payment problems with federal supervision, the Bush administration embraced Paulson's "voluntary debt workout plan, called Hope Now, which (let's be frank) failed to help homeowners or the larger home mortgage marketplace," Andrew Jakobovics of the Center for American Progress observed.
McCain often says he tries to model himself after President Teddy Roosevelt, but Herbert Hoover might be a better comparison. Over the past year, McCain has described the economy's fundamentals as "strong" at least 18 times. He said it most recently on Black Monday: "Our economy--I think still, the fundamentals of our economy are strong." His rhetoric echoes what Hoover said on Oct. 25, 1929, a day after what is now known as Black Thursday: "The fundamental business of the country, that is the production and distribution of commodities, is on a sound and prosperous basis." McCain is now trying to portray himself as a financial wizard, someone who believes "in excess government regulation" and "warned" federal officials of a potential subprime mortgage crisis as far back as two years ago. In reality, McCain has been clueless about the economy. "I'd like to tell you that I did anticipate it," McCain said in November 2007 of the financial crisis, "but I have to give you straight talk: I did not." In fact, he has been a leading advocate of deregulation. New York Times columnist and Princeton economics professor Paul Krugman has pinpointed Phil Gramm as one of the architects of the current financial crisis and the "odds-on favorite to be the Treasury Secretary" in a McCain administration. Gramm orchestrated the Gramm-Leach-Bliley Act in 1999, which "destroyed the Depression-era barrier to the merger of stockbrokers, banks and insurance companies." He also pushed the Commodity Futures Modernization Act in 2000, which made legal "the mortgage swaps distancing the originator of the loan from the ultimate collector." The Nation writes that "those two acts effectively ended significant regulation of the financial community."