With the markets in frightening turmoil and the public outraged by financial irresponsibility and excessive greed, John McCain has suddenly rediscovered the importance of strong, watchful government. Only six months ago, he assured the Wall Street Journal that he is generally opposed to regulation, but today he is ready to control executive compensation, defend 401k accounts from corporate predators, and impose renewed federal oversight of errant markets.
This populist rhetoric sounds strange, especially when emitted by a politician whose circle of advisers include former Senator Phil Gramm, vice president of the scandal-tainted Union Bank of Switzerland, and John Thain, chief executive of the firm formerly known as Merrill Lynch. But when facing the angry voters who have watched their savings evaporate, the conservative Republican more hopes to sound more like a liberal Democrat again.
He wants to blur the differences between himself and Barack Obama on fundamental economic philosophy. But there is one critical issue where the Arizonan has established a record that cannot be escaped so easily.
Senator McCain wants to privatize Social Security. It is a stance he has repeatedly taken over the past ten years in recorded votes, interviews, speeches, and documents. It is also a position that he will deny in this campaign. In fact he tried to deny it at a June town hall meeting in New Hampshire, when he declared, “I’m not for, quote, privatizing Social Security. I never have been. I never will be.” But the contrary evidence is overwhelming.
As long ago as 1998, several years before the Bush administration sought to promote privatization, he voted to partially replace Social Security with private accounts. He included privatization in the economic platform of his 2000 presidential campaign. He spoke out in support of the White House’s ill-fated push for privatization during the spring of 2005. And when that plan started to sink into oblivion, despite an advertising and public relations budget that exceeded $50 million, he tried to save it.
Senator McCain was still pushing the Bush plan earlier this year, when he needed to persuade his own party’s ultra-rightists to accept him as their nominee. During the same interview when he told the Journal editors that he generally opposes regulation, he explained his plan to “reform” Social Security. “I believe that private savings accounts are a part of it,” he said, “along the lines that President Bush proposed.”
Obviously such remarks no longer serve Senator McCain’s political purposes, and certainly won’t attract voters, who never liked the Bush plan — and probably like those ideas even less as they watch the market ravage their pension funds and equity accounts. Listening to the Republican nominee promise this week to “protect “their retirement accounts, they might wonder how he will do that when so much of the value of those accounts has disappeared already. They might also wonder what would happen to the elderly and other beneficiaries of Social Security if the privatizers like him had succeeded in consigning their future to the same Wall Street sharks he now denounces for their greed and irresponsibility.
For Senator Obama, this moment presents a crucial opportunity to draw the most important distinctions between himself and his opponent as well as between Democrats and Republicans. By going after Senator McCain on Social Security, he can assure those Democrats with the deepest doubts about him – older white working-class voters – that he is on their side and can be trusted to understand their concerns. And of course the Social Security theme fits well with the broader Obama indictment of Senator McCain as an echo of the President’s failed policies – because on this issue, that he is exactly what he has done, not only this year but for many years.
More broadly, Senator Obama needs to convince voters that he has a program to address the economic crisis – and tell them why Democratic solutions are not only in their interest but in the national interest. This is a chance for him to explain how progressive solutions work – how shared prosperity made America strong and productive during the century when we became the wealthiest and most powerful nation in the world. He should place responsibility for stagnation and decline where it belongs – on the Republican policies that have created staggering inequality.
And he should emphasize that by every measure, Democratic administrations over the past hundred years have achieved measurably more economic success than Republican administrations – not only with better budgeting and fairer taxation, but even in the growth of equity values. Stock prices rise when a Democrat is president.
The history is so clear that it is hard to understand why any investment banker or broker votes Republican. But then we’ve learned lately that they aren’t necessarily so smart, after all.