Senior McCain strategist Steve Schmidt said the campaign concluded that world markets would collapse if Washington didn’t agree on a bailout solution by the open of the U.S. stock exchanges Monday morning.

If Schmidt did say that, he needs to take a deep breath. When we are talking about a bailout plan in which the Fed. Gov. agrees to cover the risks of poor business decisions, we are talking about suspending the normal rules of capitalism in America. “Collapse” could mean something like that stock prices fall farther, or “collapse” could mean the more doom and gloom concerns of a new great depression. The distinction is important because suspending the normal rules of capitalism to buoy prices is far different than suspending the normal rules to save the economy from ceasing to operate. The bailout plan often seems to be sold to the public as a means to save the economy from grinding to a halt; terms like “market collapse” do feed the concerns that the economy is about to stop. But is it true that if this bailout is not passed by Monday, then (poof) our worst fears come true? Sure, the longer we go without the bailout, the more the fundamentals of the economy are (cough) not strong. We are certainly in a crisis, but isn’t this coming Monday morning an arbitrary date for another great depression to start? Other than general points that the longer we wait on the bailout, the worse the markets will be, why is the economy going to end on Monday? Can’t we instead take a deep breath here so we can reach a careful decision?

McCain, an Arizona senator, said regulatory agencies were “asleep at the switch” and said in his own statement that the takeover must not assist people “who created this mess.”

During a later event at a General Motors Corp. assembly plant in Lake Orion, Michigan, McCain pledged to fight “greed and irresponsibility on Wall Street,” saying he has a record of taking on special interests.

“I am here to send a message to Washington and to Wall Street,” McCain said. “We’re not going to leave the workers here in Michigan hung out to dry while we give billions in taxpayers’ dollars to Wall Street.’
Bloomberg.com: U.S.

As a Michigan resident without ties to Wall Street, I suppose his statements mean I should vote for him. After all, we both share the highly controversial positions that greed and irresponsibility are bad and that people shouldn’t be sleeping at switches.

The problem is reconciling McCain’s talk with the facts. As many others have pointed out, McCain’s economic adviser (until he called us all whiners) was Phil Gramm. Gramm is responsible for (1) the “enron loophole” preventing regulation of energy futures and (2) a ban on federal regulation of financial derivatives such as credit swap agreements. Energy prices are skyrocketing, and the credit swap agreements are at the heart of the troubles in the financial sector. McCain himself has promoted deregulation. In fact, McCain voted in support of Phil Gramm’s deregulation.

So, allegations that the regulators were not doing their job are false. McCain and Gramm forbade the regulators from regulating these matters.The regulators didn’t regulate because McCain and Gramm told them not to; but when the *&%$ hit the fan, McCain blamed the regulators anyway. The regulators were just doing as they were told.

So, do statements claiming the regulators were asleep at their job seem like straight talk? If so, what on earth does “straight talk” mean? I can understand that people might support McCain in other matters enough to ignore the stench of McCain’s rehetoric here, but any supporters want to take a crack at reconciling McCain statments and his background? By reconciling, I mean focusing on McCain’s statments and McCain’s record and showing how they are compatible. Good luck.