McCain Semi-Recants Bailout Support; Hopes Arizonans Have Short-Term Memory Loss

You may have heard that 2008 Republican Party presidential nominee John McCain is facing the challenge of his life in the GOP primary for his long-safe Senate seat. I would bet half my bank account that talk radio shouter J.D. Hayworth won't get within 10 percentage points of the guy, but the race is producing some classic McCain equivocation, such as this two-step on his support for the September/October 2008 bailouts:

the four-term senator says he was misled by then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke. McCain said the pair assured him that the $700 billion Troubled Asset Relief Program would focus on what was seen as the cause of the financial crisis, the housing meltdown.

"Obviously, that didn't happen," McCain said in a meeting Thursday with The [Arizona] Republic's Editorial Board, recounting his decision-making during the critical initial days of the fiscal crisis. "They decided to stabilize the Wall Street institutions, bail out (insurance giant) AIG, bail out Chrysler, bail out General Motors.... What they figured was that if they stabilized Wall Street - I guess it was trickle-down economics - that therefore Main Street would be fine."

Does this square with history? I don't think it does, no.

First, if McCain was against bailing out AIG back then, he sure had a funny way of saying it:

"The government was forced to commit $85 billion," McCain said in a statement. "These actions stem from failed regulation, reckless management and a casino culture on Wall Street that has crippled one of the most important companies in America. [...] 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," he said. "We must not bail out the management and speculators who created this mess. They had months of warnings following the Bear Stearns debacle, and they failed to act. We should never again allow the United States to be in this position."

He may have wanted us to hear "we must not," but the actionable verb phrase in the statement was "was forced to."

Second, if McCain was dead set against bailing out these "speculators," what was he doing proposing $300 billion to ever Tom, Dick and Harry behind or underwater on a mortgate? Did none of these people speculate? Here's Jacob Sullum from back then:

Under John McCain's mortgage bailout plan, you don't even have to default. He is promising anyone with negative equity a fixed-rate, 30-year mortgage at 5 percent, with the principal reduced based on the decline in the home's market value. If you're lucky enough to have made a really bad gamble on rising home prices, this deal might be enough to root for a McCain victory.

Third, and directly pursuant to McCain's claim to be against "stabiliz[ing] the Wall Street institutions," let's hit the replay button on September 2008:

"But who would ever have imagined," asks Salon's Andrew Leonard, "that the most extreme proposal for government intrusiveness in the private sector would come from John McCain?" How so? Leonard looks at what McCain said on Friday, and concludes he "proposed what looks to me to be the most extreme regulatory proposal I've yet seen suggested to deal with the current crisis."

McCain proposed creating a Mortgage and Financial Institutions trust to intervene early and "help financial institutions avoid bankruptcy." Leonard reacts: "Let's get this straight — the man who says he is fundamentally a deregulator and that government should get out of the way of the private sector is proposing an 'early intervention' system in which the government will be watching the books of all major financial institutions so as to steer them away from potential insolvency?!"

Finally, the Arizona senator contradicts himself (or something) later in the same Republic interview:

But McCain stopped short of calling the TARP a mistake.

"Something had to be done because the world's financial system was on the verge of collapse," he said. "Any economist, liberal or conservative, would agree with that. The action they took, I don't agree with."

Any economist, apparently, except for these 100.

McCain has long been one of the leading exemplars of do-something politics; it's one of many reasons why journalists (who tend to have a similar approach) loved him for so long. (Though Maureen Dowd and Dana Milbank have finally stepped off the bandwagon, 10 years too late.) When you get yourself to a place where "something has to be done," details be damned, then the crocodile tears kinda lose their powers of persuasion. And voters would be right to conclude that you are likely to "do something" next time around, too.

For an alternative history of McCain's bailout histrionics, read this L.A. Times campaign fantasia of mine. And for a book-length examination of his governing ideology, try McCain: The Myth of a Maverick.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • ||

    See, if I was John McCain, I'd have gotten Welch a membership at the Congressional Golf Course a long time ago. Maybe some really good seats at the Kennedy Center? You want to be an astronaut?

    Just tell me what you want! ...but make it stop.

  • PIRS||

    "I would bet half my bank account that talk radio shouter J.D. Hayworth won't get within 10 percentage points of the guy"

    I accept your proposal. Would you like to discuss terms?

  • Jeffersonian||

    Election 2008: Alien vs Predator - Whoever Wins, We Lose.

  • Xeones||

    Shut the fuck up, John McCain.

  • ||

    "talk radio shouter J.D. Hayworth"

    I heard him on the radio a few times here in Phoenix but I don't recall him ever shouting.

    I can't says that he seems particularly bright, though. He might make a good sportscaster but I don't particularly want him to be my senator.

    But if he can turn out McCain, my hat will be off to him.

  • PIRS||

    Not living in Arizona or even stepping foot in the state for more than two decades I have never heard him as a broadcaster. But, all a Senator really has to do is vote "Nay" all the time to make me happy.

  • wingnutx||

    I don't particularly want him either, but I will register as a Rep this year just to vote against McCain in the primary.

    I'm sure that J.D. will make me regret it at some point, but I voted for Napolitano once so I'm used to it.

  • alan||

    She has that East German boarder guard who was a former Olympic swimmer vibe in spades. How could you NOT vote for her.

  • alan||

    Border, man, border.

  • ||

    What's ironic about the whole thing was that coming out guns blazing against the bailout was his only and best chance to actually beat Obama. By essentially agreeing with Barack every step of the way, he threw away that chance.

    The Arizona Senate race is like sort of like an inverse Sophie's choice. All of the possible winners are all really bad ideas, even more so than usual in American elections.

  • Gene Berkman||

    It is important to remember just how important it was for President Bush to get Sen McCain and Sen Obama on board for the bailout.

    In the first vote, the House of Representatives rejected the bailout, with most Republicans and a majority of the Black Caucus voting against it.

    Sen McCain lobbied Republicans in the House, Sen Obama lobbied Democrats and in the second vote, the bipartisan bailout buddies got enough Congressmen to switch that the bailout was passed that the taxpayers had their pockets picked for $700 billion.

  • ||

    AAAAACCCCCCKKKKKKK! Bipartisianship!

  • Paul||

    the four-term senator says he was misled by then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke. McCain said the pair assured him that the $700 billion Troubled Asset Relief Program would focus on what was seen as the cause of the financial crisis, the housing meltdown.

    Didn't mislead me, and I'm but a middling IT Network Engineer coming from a humble background with a high school education. Drat those wiley public officials getting the better of... our best and brightest...

  • MJ||

    Amazing how pottent a political poison supporting TARP has become that McCain thinks it better to claim incompetence than to defend his vote on the merits.

  • ||

    McCain is up for reelection this November, so he's probably downplaying his TARP support to avoid antagonizing the Tea Party crowd. The Tea Parties have the knives out for everyone who voted in favor of TARP or the stimulus package. If the Tea Parties mount a challanger candidate they could make trouble for him in Arizona.

    But, so far, no major politician or commentator is willing to concede that TARP was a mistake or unnecessary. So McCain's playing it safe by not actually repudiating his position.

    Republican primaries mgiht be ugly .... when are they happening incidentally.

  • MJ||

    It shows that whatever strength of character McCain had when he entered the Senate has drained out of him during his years there. This half-assed distancing from TARP is cowardice, pure and simple.

  • taltoris||

    Re: Hopes Arizonans have short-term memory loss.

    Don't worry McCain. We do.

  • ||

    I believe the danger referred to here emanates from the White House and Capitol building.

  • ||

    Sorry, wrong thread.

  • Kolohe||

    Is it, though?

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Progressive Puritans: From e-cigs to sex classifieds, the once transgressive left wants to criminalize fun.
  • Port Authoritarians: Chris Christie’s Bridgegate scandal
  • The Menace of Secret Government: Obama’s proposed intelligence reforms don’t safeguard civil liberties

SUBSCRIBE

advertisement