GOLDEN, Colo.—After spending most of yesterday on the stump and the airwaves attacking Republican stewardship of the economy and promising more financial heartache under John McCain, Barack Obama today sought to articulate in stark and substantive terms why his proposals would have averted the financial crisis and will return stability to Wall Street.
Speaking in a college gym, Obama said, “Since this turmoil began over a year ago, the housing market has collapsed. Fannie Mae and Freddie Mac had to be effectively taken over by the government. Three of America’s five largest investment banks failed or have been sold off in distress. Yesterday, Wall Street suffered its worst losses since just after 9/11. Now we are in the most serious financial crisis in generations. Yet Senator McCain stood up yesterday and said that the fundamentals of the economy are strong.”
This was greeted with a resounding jeer from the crowd of 2,000.
“Now, a few hours later,” Obama continued, “his campaign sent him back out to clean up his remarks, and he tried to explain himself again this morning by saying that what he meant to say was that American workers are strong. But we know that Senator McCain meant what he said the first time, because he has said it over and over again throughout this campaign—no fewer than 16 times, according to one independent count.”
In his speech, Obama sought to put to rest any doubt over who is to blame.
“So let’s be clear,” he said. “What we’ve seen the last few days is nothing less than the final verdict on an economic philosophy that has completely failed. And I am running for president of the United States because the dreams of the American people must not be endangered any more.”
This got loud applause.
Reiterating his new emphasis on the voters rather than the candidates, Obama said, “It’s time for a government that is fighting for you—not ignoring you, or fighting against you.”
He continued with the theme.
“If you want to understand the difference between how Senator McCain and I would govern as president, you can start by taking a look at how we’ve responded to this crisis. Because Senator McCain’s approach was the same as the Bush Administration’s: support ideological policies that made the crisis more likely; do nothing as the crisis hits; and then scramble as the whole thing unravels. Now, my approach has been to try to prevent this turmoil from occurring in the first place.”
Obama then went into a long and dry articulation of all the proposals he has made since joining the Senate to prevent collapses like those that occurred on Wall Street this week.
“In February of 2006, I introduced legislation to stop mortgage transactions that promoted fraud, risk or abuse. A year later, before the crisis hit, I warned Secretary Paulson at the Treasury and Chairman Bernanke at the Fed about the risks of mounting foreclosures and urged them to bring together all the stakeholders to find solutions to the subprime mortgage meltdown. Senator McCain did nothing.”
He reiterated his calls for more regulation and contrasted them with McCain.
“This March,” he said. “In the wake of the Bear Stearns bailout, I called for a new, 21st-century regulatory framework to restore accountability, transparency, and trust in our financial markets. Just a few weeks earlier, Senator McCain made it clear where he stands, [saying] ‘I’m always for less regulation,’ and referred to himself as ‘fundamentally a deregulator.’"
He went on, “Now this is what happens when you confuse the free market with a free license to let special interests take whatever they can get, however they can get it. This is what happens when you see seven years of incomes falling for the average worker while Wall Street is booming, and declare—as Senator McCain did earlier this year—that we’ve made great economic progress under George Bush. That is how you can reach the conclusion—as late as yesterday—that the fundamentals of the economy are strong.
"Well, we have a different way of measuring the fundamentals of our economy. We know that the fundamentals that we use to measure economic strength are whether we are living up to that fundamental promise that has made this country great—that America is a place where you can make it if you try.”
And for the second time in as many days, he brought up the savings and loan scandal, which brought much scrutiny and criticism of McCain.
“It happened in the 1980s,” he said. “When we loosened restrictions on savings and loans and appointed regulators who ignored even these weaker rules. Too many S&Ls took advantage of the lax rules set by Washington to gamble that they could make big money in speculative real estate. Confident of their clout in Washington, they made hundreds of billions in bad loans, knowing that if they lost money, the government would bail them out. And they were right. The gambles did not pay off, our economy went into recession, and the taxpayers ended up footing the bill. Does that sound familiar?"
Obama’s main complaint about McCain boiled down to this: he can’t be trusted to fix the economy.
“John McCain’s newfound support for regulation bears no resemblance to his scornful attitude towards oversight and enforcement,” he said. “John McCain cannot be trusted to re-establish proper oversight of our financial markets for one simple reason: he has shown time and again that he does not believe in it.”