Obama, McCain seek political dividend in Wall Street crisis
Wall Street's meltdown sent shock waves through the White House race, as Barack Obama and John McCain sought a decisive political dividend from the fast-moving crisis just 50 days from the election.
Both candidates rushed out quick statements after the failure of investment blue-chip Lehman Brothers unleashed global securities turmoil and the state of the economy drowned out last week's squabbles in the political gutter.
In a rally in Jacksonville, Florida, Republican hopeful McCain said he knew people were scared but insisted the economy remained on sound foundations -- drawing a swift rebuke from Democrat Obama's campaign.
"There has been tremendous turmoil in our financial markets and Wall Street. People are frightened by these events," McCain said.
"Our economy I think, still, the fundamentals of our economy are strong, but these are very, very difficult times," McCain said at a rally in the key battleground state of Florida.
"I promise you, we will never put America in this position again. We will clean up Wall Street," McCain vowed, drawing loud cheers from his supporters.
Underscoring the political stakes as the financial crisis opened up a new political battleground in the twisting race, the Obama campaign pounced.
"Today of all days, John McCain's stubborn insistence that the 'fundamentals of the economy are strong' shows that he is disturbingly out of touch with what's going in the lives of ordinary Americans," said spokesman Bill Burton.
"Even as his own ads try to convince him that the economy is in crisis, apparently his 26 years in Washington have left him incapable of understanding that the policies he supports have created an historic economic crisis."
Obama issued his first written statement on the crisis at 6:17 am, east coast time, and McCain followed just over an hour and half later. But McCain was first up with a political advertisement on the meltdown.
The Democrat blamed President George W. Bush and the Republicans.
"The challenges facing our financial system today are more evidence that too many folks in Washington and on Wall Street weren't minding the store.
"Eight years of policies that have shredded consumer protections, loosened oversight and regulation, and encouraged outsized bonuses to CEOs while ignoring middle-class Americans have brought us to the most serious financial crisis since the Great Depression," he said.
McCain's statement promised a reform drive in Wall Street would be the "highest priority" of his administration.
The narrator of his advertisement warned : "our economy in crisis. Only proven reformers John McCain and Sarah Palin can fix it."
Palin, McCain's vice presidential nominee, weighed in during a trip to Colorado, as US stocks followed the downward march of global shares and television news stations here fixated on the crisis.
"Washington has been asleep at the switch and ineffective and management on Wall Street has not run these institutions responsibly," Palin said, at a rally in Golden, Colorado.
"John McCain and I are going to put an end to the mismanagement and abuses in Washington and on Wall Street that have resulted in this financial crisis.
Obama's running mate Senator Joseph Biden, on the stump in economically struggling Michigan, returned fire in a speech lacerating McCain.
"A record number of home foreclosures, home values, tumbling," said Biden.
"And the disturbing news that the crisis you've been facing on Main Street is now hitting Wall Street, taking down Lehman Brothers and threatening other financial institutions."
Though the economy has been the number one campaign issue for months, neither Obama nor McCain has carved out a wide advantage with voters spooked by the mortgage crunch, rising food costs and high gasoline prices.
An ABC News/Washington Post poll earlier this month found 47 percent of voters trusted Obama to run the economy and 42 percent trusted McCain. The Democrat had enjoyed a much wider lead on the issue for much of this year.
The latest financial crisis was sparked when banking giant Lehman Brothers went bankrupt on Monday sparking a global stocks fall, central bank alarm and widespread fears for the financial system.
US President George W. Bush said he was working "to minimize" the impact of "painful" events in global markets.
McCain: Obama exploiting economic crisis
Sen. John McCain told an Iowa crowd today that Barack Obama is trying to gain a political advantage from the financial crisis on Wall Street."My opponent sees an economic crisis as a political opportunity instead of an opportunity to lead," McCain said.
The remark echoes campaign honcho Steve Schmidt, who told reporters today that Obama was "cheerleading" the crisis. (Hat tip to Time's Mark Halperin for the pool report.)
Said Schmidt: "This is a real crisis, leaders should be responding to the crisis putting the country first, putting the American people first, not looking to score political points out of it."
This is the kind of complaining that often comes when the other side does a better job of exploiting news than your side did.
No response yet from Obama, who is about to speak in New Mexico. (Update: Obama doesn't answer the cheerleading charge, but in an economic policy speech, says of McCain: "You can’t just run away from your long-held views or your life-long record. You can’t erase twenty-six years of support for the very policies and people who helped bring on this disaster with one week of rants.
And better still, he has been meeting with numerous financial heavyweights on both sides of the isle and will deliver his program on Friday. The same old thinking and the same old people who created this mess have to go. It's not a matter of giving the boot to one or two people. The problems in our financial system are much broader than that and go layers deep. Of course, we could say the same about all of the Bush-McCain people who have been running the country. Their half-baked theories are bringing us all down.
Obama also mocked McCain's promise to fire the head of the Securities and Exchange Commission if elected.
"I think that's all fine and good but here's what I think," Obama said. "In the next 47 days you can fire the whole trickle-down, on-your-own, look-the-other way crowd in Washington who has led us down this disastrous path.
"Don't just get rid of one guy. Get rid of this administration," he said. "Get rid of this philosophy. Get rid of the do-nothing approach to our economic problem and put somebody in there who's going to fight for you."
Obama came up with yet another way to poke fun at McCain for his comment Monday that the fundamentals of the economy were strong. "This comment was so out of touch that even George Bush's White House couldn't agree with it when they were asked about it. They had to distance themselves from John McCain."
Obama said despite the growing wave of foreclosures that is putting families out of their homes, depressing house values, and forcing consumers to put off purchases, McCain "offered not one policy, not one idea, not one bit of relief."
McCain focused instead on warning against a leap to government intervention that would reward speculators and the irresponsible and hurt taxpayers in general.
But Obama said action is needed. "Our economy is grinding to a halt," Obama told voters in Greensboro, N.C., returning to the campaign trail after a family holiday in the US Virgin Islands.
The Democratic front-runner said that McCain would be more of the same as President Bush, whose call for an "ownership society" turned into a "you're-on-your own society."
"We can't afford another four years of Bush economics," Obama said.
UPDATE: McCain spokesman Tucker Bounds issued a response.
"Senator Obama’s blatant mischaracterizations aren't the new politics he’s promised America, they're the old attack and smear tactics that Americans are tired of," Bounds said in a statement. "Barack Obama's diagnosis for our housing market is clearly that Barack Obama knows best -- raise taxes on hardworking Americans and give government a prescription to spend."
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