Market creates political turmoil

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By Stephen Dinan

Sen. John McCain blames the current economic crisis on Washington's failure to combat greed and excess on Wall Street while his Democratic opponent, Sen. Barack Obama, views it as the inevitable consequences of Republican policies he says have failed the middle class.

Both men are struggling to hit the right notes in the midst of the Wall Street mess, facing the reality that there aren't many levers a presidential candidate, or even a president, can pull for a quick fix. As a result, the two men seeking to be president have been less specific on immediate solutions while touting their longer-term plans to revive the economy and insulate everyday Americans from the impact.

"This isn't just a string of bad luck. The truth is, while you've been living up to your responsibilities, Washington has not," Mr. Obama says in a two-minute commercial. "That's why we need change, real change."

As the problems mounted - the latest was the news that American International Group Inc. would receive an $85 billion bailout - Mr. McCain abandoned his long-held hands-off approach to business and investors, reluctantly supporting the AIG bailout and promising to bring the full weight of government scrutiny and regulations to Wall Street.

"The focus of any such action should be to protect the millions of Americans who hold insurance policies, retirement plans and other accounts with AIG," Mr. McCain said. "We must not bail out the management and speculators who created this mess."

Just a day earlier, the senator praised the government's decision not to bail out Lehman Brothers and said he did "not believe that the American taxpayer should be on the hook for AIG."

Mr. McCain has adopted a corporate-fighting tone, peppering his speeches and interviews with words like "greedy" and "corrupt." He has said the government must ensure that investors and insurance policyholders don't suffer because of the company's failures.

At the General Motors Orion assembly plant in Michigan on Wednesday, Mr. McCain told workers: "We are going to fight the special interests and corruption in Washington. We are going to fight the greed and irresponsibility on Wall Street."

Neither candidate has detailed what new regulations or reforms he intends for Wall Street, but both have been expansive in explaining how they plan to protect families from the meltdown's ill effects and to expand the economy.

Mr. Obama promises $200 billion in government spending on infrastructure and renewable energy, which he said would produce jobs and boost local economies. He also offered as a cushion his plan to cut taxes for families making less than $250,000 a year, offset by raising taxes on those making higher incomes.

In another new television commercial, he criticizes President Bush and Mr. McCain by showing footage of chained gates and fencing surrounding what appears to be an abandoned factory. He used the same tactic in the Democratic primary campaign against Sen. Hillary Rodham Clinton.

Mr. McCain's running mate, Alaska Gov. Sarah Palin, for the first time broke her silence with the press corps traveling with her, telling reporters that the AIG bailout was "understandable but very, very disappointing that taxpayers are called upon for another one."

Even as the policy prescriptions accumulate, so do the insults and gaffes.

Mr. McCain has been challenged for suggesting Monday that the economy's fundamentals remain strong, and his campaign's problems this week were compounded when top adviser Carly Fiorina, former chief executive of Hewlett-Packard, saying that neither the senator nor Mrs. Palin would be ready to run a major company. Also, his top domestic policy adviser, Douglas Holtz-Eakin, told reporters that as a former chairman of the Senate Commerce Committee, Mr. McCain was responsible for the BlackBerry smart phone.

Mr. Obama's campaign on Wednesday issued a statement calling AIG "American Insurance Group."

• Christina Bellantoni contributed to this report.