Obama mum on market crisis

McCain offers plan

By S.A. Miller (Contact) | Saturday, September 20, 2008

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Democratic presidential nominee Sen. Barack Obama opted Friday not to divulge details of his recovery plan for the financial crisis after a morning meeting with his top economic advisers -- fearing it would stir Wall Street jitters.

"It is critical at this point that the markets and the public have confidence that their work will be unimpeded by partisan wrangling, and that leaders in both parties work in concert to solve the problem at hand," Mr. Obama said, adding that his decision to stay mum was based on conversations he had with Treasury Secretary Henry M. Paulson Jr. and Federal Reserve Board Chairman Ben S. Bernanke.

Republican presidential nominee Sen. John McCain, who has lost ground in daily tracking polls since the crisis hit full throttle this week, pounced on Mr. Obama for inaction and then outlined a six-point plan to repair financial markets

Mr. McCain knocked Mr. Obama as having taken money from mortgage giants instead of acting in Congress to fix the housing crisis that spread to Wall Street.

"Senator Obama did nothing and actually profited from this system of abuse and scandal," he said, noting Mr. Obama took the second-largest haul in Congress of contributions from mortgage buyers Fannie Mae and Freddie Mac, whose faltering spurred a federal takeover.

He said that Mr. Obama's chummy relationship with Fannie Mae included hiring former CEO Jim Johnson, who bailed out of the quasi-public company with a multimillion-dollar severance deal, to lead the search for a vice presidential nominee.

"My friends, this is the problem with Washington," Mr. McCain said at a rally accompanied by vice-presidential nominee Gov. Sarah Palin. "People like Senator Obama have been too busy gaming the system and haven't ever done a thing to actually challenge the system."

The Obama campaign responded by accusing Mr. McCain of recycling worn-out attacks and stealing Mr. Obama's prescriptions for the country's ailing financial markets.

"He capped off an erratic week that started with him saying the fundamentals of our economy are strong and ended with him recycling false, personal attacks and a bunch of ideas no different from what Barack Obama already proposed," Obama campaign spokesman Bill Burton said.

He said Mr. Obama offered the type of presidential leadership voters are looking for, while Mr. McCain looked like "an out of touch and flailing candidate."

"I know these are difficult days. And I know there are a lot of families out there right now who are feeling anxiety about their jobs, about their homes, about their retirement savings," Mr. Obama said in Miami. "But here's what I also know. This isn't a time for fear or panic. This is a time for resolve and for leadership. I know we can steer ourselves out of this crisis. That's who we are. That's what we've always done as Americans."

Since Monday, Mr. Obama has regained ground lost since the Republican convention when he fell behind in some national polls. He took a 49 to 44 lead in the Gallup Poll and recovered lost ground to a 48-48 tie in the Rasmussen Reports daily.

Mr. McCain's six-point plan includes a new agency - the Mortgage and Financial Institutions trust (MFI) - to sound early alarms and avert collapses of major corporations.

"This will get the Treasury and other financial regulatory authorities in a proactive position, instead of reacting in a crisis mode to one situation after another," Mr. McCain said in Green Bay, Wis. "The MFI will restore investor and market confidence, build sound financial institutions, assist troubled institutions and protect our financial system while minimizing taxpayer exposure."

Mr. McCain also called for stricter regulation of the markets, for uniform rules dictating when the government can rescue failing companies and for the Fed to refocus on its core mission of protecting the dollar's value.

"A strong dollar will reduce energy and food prices," he said. "It will stimulate sustainable economic growth and get this economy moving again."

Neither candidate delved deeply into the massive taxpayer bailout of the mortgage industry that Mr. Paulson is negotiating on Capitol Hill. Both Mr. Obama and Mr. McCain called for bipartisan efforts to avert economic catastrophe.

The proposal for as much as a $1 trillion federal buyout of bad mortgages follows the Fed's $85 billion bailout of insurance giant AIG this week and the takeover of mortgage buyers Freddie Mac and Fannie Mae last week.

Mr. Obama said he supported granting "broad authority" to Treasury and the Fed to deal with the credit collapse. But the Illinois senator said any prescription for market ills should be temporary, come with tough new oversight of financial institutions and not reward reckless CEOs or "those who are ruthlessly foreclosing on American families."

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