Republican presidential candidate John McCain, shifting his position, suggested the government’s $85 billion takeover of American International Group Inc. was unavoidable as both he and rival Sen. Barack Obama, D-Ill., blamed regulators.
“On the bailout itself, I didn’t want to do that,” the Republican presidential nominee said on ABC’s “Good Morning America” program today. “But there were literally millions of people whose retirement, whose investments, whose insurance were at risk here, and they were going to have their lives destroyed because of the greed and excess and corruption.” Twenty-four hours earlier, McCain said in morning interviews that he didn’t want taxpayers to be “on the hook” for AIG. “We cannot have the taxpayers bail out AIG or anybody else,” McCain said yesterday on NBC’s “Today” show.
Obama, the Democratic nominee, blamed policies pursued under President George W. Bush and said the takeover must not result in a bailout for AIG corporate officers or investors.
“The Fed must ensure that the plan protects the families that count on insurance,” Obama said today in a statement, his first comment on the takeover. “It must not bail out the shareholders or management of AIG.”
Obama called the crisis “a stark reminder of the failures of crony capitalism and an economic philosophy that sees any regulation at all as unwise and unnecessary.” 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, Mich., 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 giving billions in taxpayers’ dollars to Wall Street.” As the crisis in the financial markets dominated the presidential campaign, Obama released a new two-minute television ad that stressed his proposed solutions for a troubled economy. The issue, he said, is “how we get America back on track.”
Obama is scheduled to talk about the economy in Elko, Nev., today and hold a rally in Las Vegas while his running mate, Sen. Joe Biden (D-Del.), campaigns in Ohio.
McCain started his day in Ohio before moving onto Michigan. Later today he will host his first joint town hall meeting with his running mate, Alaska Gov. Sarah Palin. She is expected to take questions from the audience at the event.
As polls show the race between McCain and Obama a dead heat nationally, they are emphasizing their prescriptions for the economy in a bid to win over voters and reassure them about the market turmoil.
The Federal Reserve announced yesterday it will provide a two-year loan to AIG, the U.S.’s biggest insurer, and take over 80 percent of the New York-based company’s stock. The Fed also will replace the company’s management. The action follows the collapse of Lehman Brothers Holdings Inc. at the start of the week, the bailout of Bear Stearns Cos. in March, and the takeover of Fannie Mae and Freddie Mac earlier this month.
Stocks in the U.S. tumbled today with the S&P 500 losing 3.1 percent and the Dow Jones Industrial Average declining 2.6 percent at 11:51 a.m. in New York. About $2.8 trillion of market value was erased from global stocks since Lehman’s bankruptcy.
McCain’s campaign has ties to AIG. Harvard economics Professor Martin Feldstein, whose advice has been sought by McCain, is on the board of directors. One of McCain’s top fund-raisers, Wayne Berman, is registered to lobby for AIG, congressional records show. AIG paid Berman’s firm, Ogilvy Government Relations, $100,000 during the first six months of the year.
McCain’s congressional liaison, John Green, formerly lobbied for AIG at Ogilvy. He has taken a leave of absence from the firm to work on the McCain campaign.
