John McCain has officially solidified his position as the "change" candidate.
In March, he told the Wall Street Journal that "I'm always for less regulation." He acknowledged that there is a "role over oversight," but reiterated "I am fundamentally a deregulator. I'd like to see a lot of the unnecessary government regulations eliminated, not just a moratorium."
And his record backs that up. He has historically supported reducing the regulatory load on financial institutions -- in particular the banks that have been at the heart of the current financial crisis. In 2000, he declared, "I am convinced that the best thing government can often do to advance the fortunes of the private sector is to stay out of its way."
But now he has changed his tune, calling for the firing of SEC commissioner Christopher Cox, according to excerpts of a speech he is about to deliver.
From the Wall Street Journal:
"The chairman of the SEC serves at the appointment of the president and has betrayed the public's trust. If I were president today, I would fire him," McCain says, according to excerpts for a speech on reforming the ailing U.S. financial markets he will deliver today in Cedar Rapids, Iowa.
"The primary regulator of Wall Street, the Securities and Exchange Commission (SEC) kept in place trading rules that let speculators and hedge funds turn our markets into a casino," McCain says. "They allowed naked short selling–which simply means that you can sell stock without ever owning it. They eliminated last year the uptick rule that has protected investors for 70 years. Speculators pounded the shares of even good companies into the ground."
Make no mistake, in How the World Works' opinion, Christopher Cox should be fired. He's been a virtual nonentity for the entire extent of the credit crunch. While Ben Bernanke and Hank Paulson have been laboring mightily to keep the floodwaters from drowning everyone, we've heard next to nothing from Cox.
But it might be worth remembering that this former Reagan administration lawyer and congressional House representative from Orange County, Calif., has been doing exactly what his party has always wanted him to do. George Bush did not appoint him commissioner in 2005 to crack down on Wall Street. The prevailing ideology of the Republican Party -- and this is one area where the historical evidence, by his own admission, does not justify calling John McCain a "maverick" -- has been to loosen control of Wall Street, not to tighten it. If our markets were turned into casinos, the majority of the blame has to go to the Republican Party, with some assistance from the Clinton administration.
As for short-selling, well, a lot of CEOs who are watching their company's share price crumble would like to line short-sellers up against the wall, although there are also plenty of people on Wall Street, usually from the more conservative side of the political spectrum, who believe the practice is an essential part of how the market is supposed to regulate itself. But short-selling is not the root of Wall Street's current problems -- it's merely collateral damage.
Of course, the last thing Americans want to hear now is a sermon on how government should not get in the way of private business -- not as they watch in stunned amazement the most radical government interventions in the private sector since the Great Depression. So McCain has pulled a remarkable about-face. That is quite a change, no doubt about it.