Mayor Michael Bloomberg, one of the country’s highest-profile experts on financial markets, has been remarkably careful in the past week not to publicly favor either Barack Obama or John McCain when discussing the Wall Street crisis. And after speaking with Obama about the economic challenges in a telephone conversation last night, Bloomberg seemed to agree with McCain–and not agree with McCain–on one contested issue relating to the meltdown.
McCain’s remarks this week that he would, as president, fire the S.E.C.’s chairman, Christopher Cox, prompted criticism from the Obama campaign, which, in another effort to paint McCain as ignorant on economic issues, pointed reporters to articles arguing that the S.E.C. chair cannot be removed unilaterally by the president.
Bloomberg, speaking to reporters at a school uptown today, seemed to come down on McCain’s side about whether Cox could be fired, but also insinuated that Cox would not be let go, and perhaps should not be blamed for the crisis roiling the economy.
"The chairman of the S.E.C. pretty much serves at the pleasure of the president, so the new president would typically change the management," said Bloomberg. When Bloomberg was reminded by a reporter that McCain has said Cox should be fired immediately, he added, "I don’t think the president will make changes given that the president is in office for another four and a half months."
"The problems we are having in the economy have to do with a lot of different parts," added Bloomberg, saying that "overbuilding" in the housing market and other economic activities that in no way fell under the S.E.C.’s jurisdiction had a good deal to do with the current crisis. "The S.E.C. is a relevant, small part of what we have been talking about, which is why you haven’t seen Chris Cox front and center in most of these things. I visited him yesterday morning and had talked with him earlier in the week trying to give him my ideas on what he should do to slow down the volatility of the market." When asked whether McCain’s effort to put the blame on Cox betrayed a lack of understanding of how the crisis came about, given all the other variables Bloomberg listed, the mayor seemed to try and make up excuses for McCain’s remark. "It may be that somebody asked specifically about it and it came out of context," he said. (McCain’s call to fire Cox was included in the candidate’s prepared remarks, according to McCain spokesman Tucker Bounds.) McCain and, to a lesser extent, Obama have come under criticism for shifting their positions or giving ambiguous answers on whether the government should or shouldn’t bale out enormous financial institutions. Here again, Bloomberg seemed to want to cut both candidates some slack. "Keep in mind these are moving targets," he said. "Everything anybody is going to say yesterday is today totally different." Bloomberg, who has not spoken to McCain in the last week, according to a spokesman for the mayor’s office, offered few details about his conversation with Obama. "I said to Senator Obama last night," said Bloomberg, "there are a number of different levels he has got to address, and Senator McCain the same thing." "One," he said, they are all in a political campaign and they had to find a way, outside of sound bites to "explain to the public as best they can, compared with the other guy what they would do." Second he said, was their views on how " to deal with the crisis we have now," whether it be jobs, mortgages, or financial institutions closing. "Then there is the long-term problem," he said, of examining the country’s regulatory bodies when a lot of the business affecting the American economy takes place outside the purview of the nation’s regulatory authority. Earlier in the week, the McCain campaign pointed to Bloomberg’s remarks attesting to the strength of the national economy as supporting evidence for McCain’s much criticized remarks calling the fundamentals of the economy strong. Asked if he still believed the fundamentals of the national economy were solid, he said "Yes, I do," but then went on to give a very broad, McCain-like definition of the fundamentals of the economy, including "democracy" and a spirit of "inclusiveness" that was endangered by laws discouraging people from coming to the United States. "Our immigration policy is insane," Bloomberg said. Bloomberg also gave a noncommittal answer on the question of whether short-selling should be made illegal, as the S.E.C. has suggested doing temporarily, according to The Wall Street Journal. "We assume that there were short sellers that got together and said, ‘Let’s go and then sell the stock short.’ I don’t think that generally that existed. There may be one or two," he said, "but people are smarter than that. They’re not going to collude." He didn’t seem to think it was that big a deal. "That’s not the biggest factor in the market," Bloomberg said, while also coming out for some rules for greater transparency and requirements for selling stocks on the speculation that they will go down in value. Instead, Bloomberg put most of the blame for the market’s failure on "computer program trading."