"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," McCain said in a statement.
"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."
Although he is stepping up criticism of government regulators as he seeks the presidency, McCain has long favored a reduction in corporate regulation.
More here. Feh.
In last week's New York Times, Tyler Cowen hit these right notes:
The biggest financial deregulation in recent times has been an implicit one—namely, that hedge funds and many new exotic financial instruments have grown in importance but have remained largely unregulated. To be sure, these institutions contributed to the severity of the Bear Stearns crisis and to the related global credit crisis. But it's not obvious that the less regulated financial sector performed any worse than the highly regulated housing and bank mortgage lending sectors, including, of course, the government-sponsored mortgage agencies.
In other words, the regulation that we have didn't work very well.
There are two ways to view this history. First, with the benefit of hindsight, one could argue that we needed only a stronger political will to regulate every corner of finance and avert a crisis.
Under the second view, which I prefer, regulators will never be in a position to accurately evaluate or second-guess many of the most important market transactions. In finance, trillions of dollars change hands, market players are very sophisticated, and much of the activity takes place outside the United States—or easily could.