WASHINGTON Republican presidential candidate John McCain on Tuesday called for a high-level commission to study the current economic crisis and claimed that a corrupt and excessive Wall Street had betrayed American workers.
His Democratic opponent, Barack Obama, continued to criticize McCain's remark Monday that "the fundamentals of our economy are strong." In a television ad released Tuesday, Obama's campaign asks: "How can John McCain fix our economy if he doesn't understand it's broken?"
A few hours after making his remark at a morning rally on Monday, McCain backtracked and declared the economy to be in a crisis. At a town-hall meeting he defined the fundamentals he spoke of earlier as American workers and said that the backbone and products of those workers remained sound but faced danger from greed and corruption.
"Those fundamentals are threatened, they are threatened and at risk, because some on Wall Street have treated Wall Street like a casino," McCain said.
In spite of the reversal, the Arizona senator was widely criticized for his earlier remark, a seemingly upbeat outlook while the stock market was on its way to a 500-plus point loss and new troubles arose for investment banks.
Appearing Tuesday on the three network morning shows, McCain said there was indeed a financial crisis and that to understand what had caused it, the nation would need a review on the order of the one led by the Sept. 11 commission. That bipartisan panel studied the events leading to the 2001 terrorist attacks and recommended changes to avert another attack.
"I warned two years ago that this situation was deteriorating and unacceptable," McCain said on "Good Morning America" on ABC. "And the old-boy network and the corruption in Washington is directly involved and one of the causes of this financial crisis that we're in today. And I know how to fix it and I know how to get things done."
McCain offered no specific remedies during his appearances, though he said he agreed with Treasury Secretary Henry Paulson that the government should not bail out American International Group Inc., the world's largest insurer. AIG stock fell 61 percent on Monday and credit-rating agencies dropped its ratings amid worries that the deteriorating housing market was further undermining its finances.
Saying that the American taxpayer should not be "on the hook" for AIG, McCain said: "We cannot have the taxpayers bail out AIG or anybody else. This is something that we're going to have to work through."
Later, a McCain economics and policy adviser, Douglas Holtz-Eakin, said any plan should include regulation of all sorts of financial institutions, consumer protections, improved corporate governance and "systems stability" programs.
"There's no magic solution, and I don't think it's at this moment imperitive to write down exactly what the plan has to be," said Holtz-Eakin. "But there should be an understanding that when you walk out of the Congress with a piece of legislation in the next administration, those boxes are checked and those things are effectively accomplished."
Democratic vice presidential candidate Joe Biden countered that the economic policies of McCain and the Bush administration had led to any betrayal of American workers. He argued that the Republican campaign's message was at odds with itself with McCain saying the economy's fundamentals were sound but that urgent repairs were needed.
"It seems like John's had an epiphany. Nine o'clock yesterday morning, John thought the economy was going great guns and the Bush administration was doing well, and today he thinks it's in crisis," Biden said on CBS' "The Early Show."
Biden said the Democratic presidential campaign's solutions for the economic crisis include giving middle-class taxpayers a substantial tax break, putting an end to Bush administration tax cuts that favor the wealthy, investing in infrastructure, and changing bankruptcy laws to help people facing foreclosure.
"My lord, take a look at what who got us in this hole, whose policies," Biden said. "This has been a Republican philosophy of letting Wall Street do what they want and the middle class be damned. It's about time we change it. If I sound like I'm angry, I am fighting mad for middle-class people who have been the scapegoat of this economy because of the policies of the McCains and the Bushes."