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McCain shifts stance on financial bailout

Sen. John McCain greets supporters after a town hall meeting in Grand Rapids, Mich., on Wednesday.  (Associated Press / The Spokesman-Review)
Sen. John McCain greets supporters after a town hall meeting in Grand Rapids, Mich., on Wednesday. (Associated Press / The Spokesman-Review)

Senator reverses earlier opposition to federal involvement

GRAND RAPIDS, Mich. – With the economy in turmoil and the country’s second-largest insurer faltering, John McCain was unequivocal Tuesday: “We cannot have the taxpayers bail out AIG or anybody else.”

By Wednesday, he appeared to change his mind.

Softening his opposition to the bailout proposed by the Federal Reserve, McCain treated the plan as a necessary evil to protect ordinary Americans with finanical ties to AIG – and asserted that such a financial collapse should not be allowed to happen again. He also called for an investigation to uncover any wrongdoing.

“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 rapid about-face followed another quick retreat by the Republican presidential nominee earlier this week when he insisted that “the fundamentals of our economy are strong” even as one brokerage house filed for bankruptcy, another nearly went under and the Dow Jones industrial average dropped 504 points.

McCain’s reversals underscored the difficulty he has had finding the right response to the deteriorating economy, the issue voters say is most important. They also are highlighting the contradiction between McCain’s oft-repeated campaign message – that the federal government should largely stay out of the economy – and his new promises to help voters whose jobs, houses and retirement accounts are disappearing.

In a matter of days, McCain shifted from invoking small-government icon Ronald Reagan to quoting Franklin D. Roosevelt, the architect of the modern regulatory state.

And he and his running mate, Alaska Gov. Sarah Palin, dropped their promise, as Palin put it, to “get government out of the way of private-sector progress,” and are now pledging “stringent oversight” to deal with “a toxic waste there on Wall Street.”

The wildly swinging rhetoric from the McCain campaign has delighted Barack Obama, who just last week was struggling to respond to the enthusiasm whipped up by Palin’s unexpected arrival on the national stage.

Campaigning in Nevada on Wednesday, the Democratic nominee mocked McCain’s attempts to cast himself as a reformer. “This is somebody who’s been in Congress for 26 years, who put seven of the most powerful Washington lobbyists in charge of his campaign,” Obama said.

McCain’s zig-zags on the deepening economic crisis may also be starting to stir doubts with some voters. Several recent polls suggest that his post-convention lead is slipping away. The latest New York Times/CBS poll, taken Friday through Tuesday, found that Obama had the support of 48 percent of registered voters to 43 percent for McCain. Voters overwhelmingly indicated that the economy was their top issue, and they had more confidence in Obama than McCain to make the right decisions.

Obama, who has consistently criticized the Bush administration’s economic management, avoided taking a position on the AIG rescue plan, saying Wednesday, “We do not know all the details.” He added that the plan should not “bail out the shareholders or management of AIG.”

Associated Press contributed to this report.


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