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Panel on the Candidates and Economic Blame

Panel on the Candidates and Economic Blame

FOX News Special Report With Brit Hume - September 16, 2008

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R-AZ) PRESIDENTIAL CANDIDATE: The top of our economy is broken, and we have seen self interest, greed, irresponsibility, and corruption undermine the hard work of the American people.

It's time to set things right, and I promise to get the job done as your president.

SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: John McCain's newfound support for regulation bears no resemblance to his scornful attitude towards oversight and enforcement.

John McCain can't be trusted to reestablish proper oversight of our financial markets for one simple reason--he has shown time and again that he does not believe in it.

(End VIDEO CLIP)

HUME: Well, there you see the debate drawn. Each man is trying to say that he is the one, just the one to fix the current woes besetting Wall Street and perhaps the economy in the larger sense.

Some thoughts on this debate now from Fred Barnes, Executive Editor of "The Weekly Standard," Mara Liasson, National Political Correspondent of National Public Radio, and the syndicated columnist and Fox News contributor Charles Krauthammer.

All right, Fred, Obama said--McCain says he's the guy to fix this. He doesn't like Wall Street's self-interest and greed. Obama says he's ideologically opposed to this kind of regulation and oversight. Who is right?

FRED BARNES, EXECUTIVE EDITOR, "THE WEEKLY STANDARD": I don't think either one of them is right, to tell you the truth, and I worry what Washington is going to do, not what will happen on Wall Street.

Remember when you had the Enron scandal, and we got Sarbanes-Oxley? What did that help produce? It made New York no longer the financial center of the world. It moved to London, during all the IPOs, initial public offerings offshore.

Washington doesn't understand Wall Street. Wall Street doesn't understand Washington very well either. But McCain--look, he says he's going to regulate. What does he have in mind? Is he going to tell investment banks where they can invest and where they can't, and how much leverage they are allowed to have?

You know, that's not--that shouldn't be--

HUME: --historically been a big opponent regulation?

BARNES: We have sometimes. But here is the thing about McCain-he likes capitalism. He just doesn't like capitalists. He really does not like corporate CEO's.

And Obama is blaming it on Bush administration policies. Which ones?

I mean, look, capitalism, particularly in a globalized economy, is something that has produced great wealth and reduced poverty, but it's a rough and tumble affair, and sometimes companies take a lot more risk than they should have. That's what happened here.

Look, this may be a crisis on Wall Street, but what is the best example of where we're headed and whether we should be optimistic or not? It's the stock market. It went up today. That's a bet on the future.

MARA LIASSON, NATIONAL POLITICAL CORRESPONDENT, NATIONAL PUBLIC RADIO: I think that both of them are talking about more oversight or regulation. There is no doubt that John McCain's record is of a deregulator. He has called himself that in an interview with "The Wall Street Journal."

And they're both trying to fight for the same ground. Yesterday he was talking about the fundamentals of our economy are strong. Today he said the top of our economy is broken, which is a milder variation of Obama saying "How can you fix the economy if you don't know it's broken?" Now he thinks the top is broken.

I think what's extraordinary is that Obama does not have a bigger advantage on this issue than he does. He has a small one, now but the Democrats should be way ahead. This is a financial crisis that makes people nervous, and Democrats usually benefit mightily in a situation like that.

I think Obama is getting better. You saw him reading from a teleprompter there. That was about as feisty and clear and tough as I have seen him in a speech in a long time. I think he is trying to hit on this. I think this is a great opportunity for him. I'm just surprised that he isn't way out ahead.

And, of course, you know, McCain is just saying because I'm a maverick and I am going to reform everything, I can reform Wall Street, too.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Look, given the fact that Obama is blaming it on Republicans and Bush policy, I'm heartened that McCain is joining in the mindless populism, blaming it on Wall Street greed. What does he think happens on Wall Street?

The causes of this are not obscure, and there are several of them. One of them is that the Federal Reserve under Alan Greenspan kept the punch bowl open for a long time with low interest rates after 9/11, which led to a wild borrowing spree of Wall Street and Main Street.

Secondly, for two decades you've had Republicans and Democrats in the presidency and also in Congress who pushed to expand lending for housing to people who hadn't had it before, particularly African-Americans, who had been denied it because of discrimination and racism, and encouraged subprime loans, which in the end collapsed in a fury and in a wave.

And, thirdly, what we had was a kind of an advance in computers in which people that derived these esoteric instruments of debt, which was understood not as a way to cheat and hide but as a way to spread the risk of mortgages.

But, ultimately, because it was obscured, it had the opposite effect of spreading the liability in a way that people aren't even sure how much they own.

The reason that Lehman collapses is because it looks at its books and doesn't really understand how much of a liability it has and the run starts on it, and it can't answer.

HUME: So who wins this debate politically?

KRAUTHAMMER: I think it is a draw because both of them are appealing mindlessly to a populism which, I think, Republicans will respond, if you blame Wall Street and Democrats will respond if you blame the Republicans.

For more visit the FOX News Special Report web page.

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