Read more about Barack Obama’s economic plan at http://barackobama.com/plan
(via Obama offers remedy for economic turmoil :)
Barack Obama spent two days in Colorado under the cloud of a collapsing Wall Street but departed by offering a plan to cleanup a mess he accused his opponent of failing to comprehend.
“We are in the most serious financial crisis in generations. Yet, Sen. (John) McCain stood up yesterday and said that the fundamentals of the economy are strong,” Obama said here Tuesday.
The Democratic presidential nominee described a six-point plan that would subject all financial institutions that can borrow from the government to more oversight and crack down on trading practices he said border on market manipulation. Such action is needed to repair America’s faltering confidence in housing and financial institutions, Obama said.
On a half-dozen talk shows and in an campaign appearance Tuesday, McCain also called for reforms, saying there must be more effective regulation of investments and a commission to examine causes of the current troubles. But his campaign also criticized Obama for what it said was the Illinois senator’s pessimism about the American economy.
The dueling messages were the culmination of a week in which Lehman Brothers declared bankruptcy, Merrill Lynch was sold and the government agreed to provide an $85 billion emergency loan to rescue the insurance giant AIG.
The economy suddenly is back at the forefront of the presidential campaign, as Obama showed by spending the bulk of his 41-minute speech at the Colorado School of Mines on the topic.
“America is a place where you can make it if you try. . . . But the American economy has worked in large part because we have guided that market with an invisible hand of principle that America prospers when all Americans prosper,” Obama told the receptive crowd of 2,000 at the Lockridge Arena. “Too often over the last quarter century we have lost this sense of shared prosperity. . . . The American economy does not stand still, and neither should the rules of government.”
Obama said he would push a $50 billion emergency economic plan, offer a 10 percent tax credit on mortgage costs to middle-class homeowners and change bankruptcy law to make it easier for people in financial trouble to stay in their homes.
New regulations must ensure that all financial institutions strengthen their amount of capital and that government investigates potential conflicts between ratings agencies and the institutions that they oversee, he added.
Obama attempted to draw sharp contrasts between himself and McCain, who has described himself as “fundamentally a deregulator.” The Illinois senator argued that a reduction in regulation and oversight led to the savings-and-loan crisis of the 1980s and the recent problems that saw the collapse of three of the country’s five largest investment banks.
“John McCain cannot be trusted to reestablish proper oversight of our financial markets for one simple reason: he has shown time and time again that he does not believe in it,” Obama said.
McCain backed away somewhat Tuesday from his remarks that the economy is fundamentally strong, elaborating that he believes that the American workers who drive the economy continue to be strong. But his discussion of the economy took a different tone than Obama’s.
The Arizona senator spoke of cutting taxes to fuel the economy and warned that government should not bail out flailing private companies like AIG for fear that this could encourage additional risk-taking. He promised to end the “reckless conduct, corruption and unbridled greed” that had caused both the financial crisis and the recent foreclosure crisis.
Both men agreed that regulatory agencies must be streamlined.
As the financial crisis has worsened, McCain has cut into Obama’s significant lead in polls on which candidate would do a better job handling the economy.
William Galston, co-editor of the public-opinion journal The Democratic Strategist, sent an open letter Tuesday criticizing Obama for not offering a clear message on what has gone wrong with the economy or how to fix it.
Vicki Snider, an Obama precinct captain from Brighton, recalled a recent conversation with a Republican she said complained that Obama hasn’t offered specifics to back up his campaign promises. Tuesday’s speech included the kind of details that will capture voters’ attention, Snider said.
Peter Lohaus, a retired business professor from Arvada, agreed that it was the specifics of the six-point plan that set the address apart from many of Obama’s other speeches.
“I’m really glad that he basically addresses Mr. McCain’s ideas and doesn’t fall into a personality battle,” Lohaus said.
The Associated Press contributed to this report.
