Wednesday Morning: New Economic Ads, McCain Changes His Mind on Regulation, and Obama Exaggerates

Good morning.

The nation's financial turmoil continues with an $85 billion government bailout of insurance giant AIG and new home construction at its lowest levels since 1991. As a result, the candidates are all but forced to talk about an actual policy issue: what to do about the economy.

Barack Obama this morning released an unusual two-minute ad (the campaign says it will be airing "nationally and in battleground states") in which the candidate says Washington hasn't lived up to its responsibilities. Obama admits that "much of this campaign has been consumed by petty attacks and distractions" and then lists his economic policy goals: middle class tax breaks; increased regulation of Wall Street; reduced dependence on foreign oil; lobbying reform; and ending the war in Iraq (more details are here). He finishes the ad by calling for and end to "bitter partisanship" and the creation of "a new spirit of unity and shared responsibility"

McCain has a new economy-focused ad this morning as well. It's a regular 30-second spot in which he vows to "reform Wall Street and fix Washington" and says Obama only offers "talk and taxes." (The campaign's press release backs up the taxes claim with news links about Obama's plans for a windfall profits tax on oil companies, and to roll back the Bush tax cuts for those making more than $250,000 a year) The voiceover then promises: "change is coming." (You can read more about McCain's economic plan here.)

McCain is in a bit of a pickle with the Wall Street situation, given his longstanding support of the deregulation policies that have contributed heavily to the recent meltdown. The WP's Michael Shear has the background:

In 2002, McCain introduced a bill to deregulate the broadband Internet market, warning that "the potential for government interference with market forces is not limited to federal regulation." Three years earlier, McCain had joined with other Republicans to push through landmark legislation sponsored by then-Sen. Phil Gramm (Tex.), who is now an economic adviser to his campaign. The Gramm-Leach-Bliley Act aimed to make the country's financial institutions competitive by removing the Depression-era walls between banking, investment and insurance companies.

That bill allowed AIG to participate in the gold rush of a rapidly expanding global banking and investment market. But the legislation also helped pave the way for companies such as AIG and Lehman Brothers to become behemoths laden with bad loans and investments.

McCain now condemns the executives at those companies for pursuing the ambitions that the Gramm-Leach-Bliley Act made possible, saying that "in an endless quest for easy money, they dreamed up investment schemes that they themselves don't even understand."

Obama, meanwhile, is under fire for overstating his role in crafting Congress's economic stimulus package. Yesterday in Golden, CO, Obama said this:

In January, I outlined a plan to help revive our faltering economy, which formed the basis for a bipartisan stimulus package that passed the Congress.

Really? Well...not quite. ABC's Jake Tapper looked into it:

Media accounts from the time make it clear that even though Obama, Sen. Hillary Clinton, D-NY, and Sen. John McCain, R-Ariz., all offered legislation to provide stimulus to the economy, congressional leaders looped them and their legislation out of negotiations.

(snip)

[T]hough the bill that eventually passed more closely resembled Obama's than either Clinton's or McCain's, those involved in the drafting of the legislation say it was more a matter of agreeing on a good idea and was not a matter of, as Obama claimed, his proposal having "formed the basis for a bipartisan stimulus package that passed the Congress."

Is Obama's overstatement as big a deal as McCain's evolving position on regulatory agencies, or even his abrupt rhetorical shift this week on the economy? Perhaps not. But it's still potentially politically damaging, as it revives the theme of Obama's overstatements -- on immigration; ethics reform; the Kennedys and his father -- that the Clinton campaign sought to expose during the primary campaign and the Republicans will be happy to re-visit.

And finally, Democratic Platform Committee member (and former big-time Hillary Clinton supporter) Lynn Forester de Rothschild will publicly endorse John McCain today. De Rothschild, a baroness, has accused Barack Obama of being an out-of-touch elitist.

-- Evie Stone

10:00 AM ET | 09-17-2008 | permalink

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