Adviser: McCain Wants Reform On Wall Street
A day after heavy losses on Wall Street, John McCain's chief economic adviser says the Republican candidate wants to reform the regulatory system.
"We've got a patchwork of regulators right now — an alphabet soup, so to speak — and there are transactions that get treated differently," Douglas Holtz-Eakin tells host Steve Inskeep.
McCain, who has previously characterized himself as a "deregulator," would seek to have the same regulation for the same types of economic transactions. This is not an issue of more or less regulation, Holtz-Eakin says. "It's making sure the playing field is level and that everyone gets a fair chance."
He calls the economic crisis a complete failure on a bipartisan basis.
"Mass securitization and new exotic financial instruments really lead a lot of firms into bankruptcy, lead a lot of people into loans they couldn't handle," he says.
Holtz-Eakin says McCain challenged the Bush administration on Fannie Mae and Freddie Mac back in 2005, arguing that they should be downsized and sold off, but it wasn't a priority for the administration.
"And now you see what we have," he says. "We have $5.6 trillion worth of debt, now explicitly backed by taxpayers ... and that's not acceptable. We can't do this, where private individuals, shareholders and management are making a pile of money at the taxpayers' expense."
Holtz-Eakin says McCain feels CEO salaries would be reined in quickly if they were put before shareholders for a vote. Shareholders might start thinking, "Gee, that could be my money or that could be money we plow into investment or research."
Income inequality is a big problem, Holtz-Eakin says, and the dividing line is education.
"Those with poor skills and low education do not succeed in this economy," he says. "[McCain] has proposed to reform dramatically our K-12 education system so that we stop failing so many young Americans."
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