Obama Plugs Federal Oversight As Economic Fix

Democratic presidential nominee Barack Obama says he has the best medicine to cure Wall Street of its current ills. Obama says government oversight in the financial markets would help to ensure a stronger economy.

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STEVE INSKEEP, host:

Even as it changes your pension fund, this week on Wall Street is changing the presidential race. John McCain says he wants a 9/11 style commission to investigate the financial turmoil. Barack Obama accuses his rival of trying to pass the buck. We're going to hear more from the McCain campaign in a moment. We begin with NPR's Scott Horsley who's traveling with Obama.

SCOTT HORSLEY: Barack Obama says the shockwaves rolling through Wall Street represent a major threat to Main Street's economy. The Democratic presidential hopeful told supporters in Golden, Colorado, it's the predictable result of Republicans' hands-off approach to governing, an approach he says ignores problems until a crisis hits, then scrambles to pick up the pieces.

Senator BARACK OBAMA (Democrat, Illinois; Democratic Presidential Nominee): What we've seen in the last few days is nothing less than the final verdict on an economic philosophy that has completely failed. And I am running for president of the United States because the dream of the American people must not be endangered anymore.

HORSLEY: Obama says it's time Americans have a government fighting for them, not against them. Republican John McCain often stumps with a slightly different slogan, saying he wants government on your side, not in your way. Those one-liners reveal the philosophical gulf between the candidates. Obama sees government as a potential force for good, McCain sees government as just as likely to be an impediment. Obama reminded supporters of McCain's record, quoting from a March Wall Street Journal article in which McCain describes himself as "fundamentally a deregulator."

Senator OBAMA: In fact, one of the biggest proponents of deregulation in the financial sector is Phil Gramm. This is the man who helped write John McCain's economic plan, the same man who said that we're going through a mental recession, the same man who called the United States of America a nation of whiners.

HORSLEY: Given that association and his opponent's own background, Obama says McCain's calls this week for stepped-up regulation are suspect.

Senator OBAMA: His outrage at Wall Street would be more convincing if he wasn't offering them more tax cuts.

HORSLEY: Obama contrasts that with his own record of sponsoring consumer protection measures and government assistance. Yes, he says, Americans believe in the free market, but that doesn't mean an outlaw market where anything and everything goes.

Senator OBAMA: The American economy has worked in large part because we have guided the market's invisible hand with a higher principle, that America prospers when all Americans can prosper.

HORSLEY: Obama was introduced in Colorado by Penny Roach, a single mother who lives outside of Denver. Roach lost her job a few years ago at Merrill Lynch, the venerable Wall Street firm that had to be sold at a deep discount over the weekend.

Ms. PENNY ROACH: I'm in a new job now. But like so many, I walk in every day wondering if I'll have a job tomorrow. Our country's better than this, and that's why I support Senator Obama.

HORSLEY: After speaking in Colorado, Obama was off to California for a pair of posh fundraisers in Beverly Hills, one of them featuring Barbra Streisand.

(Soundbite of song "Happy Days Are Here Again")

Ms. BARBRA STREISAND (Actress; Singer): (Singing) Happy days are here again. The skies above are clear again...

HORSLEY: OK, that's actually a CD. But the people who ponied up 2,500 bucks last night got to hear Streisand in person. The two events brought in some nine million dollars on top of the record 66 million Obama raised last month. But because he passed up public financing, Sheila Krumholz of the watchdog Center for Responsive Politics says Obama will have to keep up this pace to stay competitive with McCain and the Republican National Committee.

Ms. SHEILA KRUMHOLZ (Executive Director, Center for Responsive Politics): Obama has raised more than twice what McCain has. But the picture is less lopsided when you consider the amount of money the parties can spend for their respective candidates.

HORSLEY: That means Obama will be spending some valuable campaign time in non-swing states like California, raising money and talking about yours. Scott Horsley, NPR News, Beverly Hills.

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Correction Sept. 17, 2008

In the story, we said that Merrill Lynch had been sold "at a deep discount over the weekend." While the price of Merrill's stock had fallen steeply in the previous few months, Bank of America's offer of about $29 a share was higher than the previous closing price for Merrill's stock.

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