Transcript by Scott Horsley from NPR on September 16, 2008 ·
Democratic presidential hopeful Barack Obama has characterized the financial turmoil on Wall Street as "nothing less than the final verdict" on Republicans' failed economic philosophy.
Both he and his GOP rival, John McCain, have said that there needs to be an overhaul of financial regulation, but Obama said McCain's proposals are not credible given his history of supporting deregulation as a senator.
On Tuesday, Obama said the collapse of investment bank Lehman Brothers is just the latest in a wave of crises that have rattled faith in the financial markets and now threaten the nation's economy. He laid the blame for that lost confidence on an anything-goes philosophy that he said rewards financial manipulation instead of sound business.
"I am running for president because we simply cannot afford four more years of an economic philosophy that works for the few but leaves the many behind. That works for Wall Street instead of Main Street and ends up devastating both," he said in a speech at the Colorado School of Mines, outside Denver.
There, Obama also said that runaway free-market philosophy has governed Washington, D.C., for the past eight years, since Republicans took control of the White House. And he says the same philosophy will continue if McCain is elected president.
"They call it the ownership society, but what it really means is you're on your own," he said. "We know the results. You feel it in your own lives. Jobs have disappeared, and people's life savings have been put at risk. Millions of families face foreclosure, and millions more have seen their home values plummet."
As he has before, Obama portrayed the mortgage meltdown on Wall Street as the predictable result not of some invisible hand but of government policymakers who allowed lenders to make bad home loans with little protection for borrowers, or for the investors who underwrote the now popped housing bubble.
"This is what happens when you see seven years of incomes falling for the average worker while Wall Street is booming and declare — as Sen. McCain did earlier this year — that we've made great progress economically under George Bush," Obama said. "That is how you can reach the conclusion — as late as yesterday — that the fundamentals of the economy are strong."
Comparing Records On Regulatory Oversight
More than two years ago, Obama sponsored legislation to outlaw risky or fraudulent mortgage abuses. McCain, he said, did nothing.
Six months ago, Obama outlined plans for what he called a 21st century framework of financial regulation, at a time when McCain was still saying the government should do little to help irresponsible lenders or borrowers.
This week, as the stock market plunged, McCain did call for an overhaul and updating of financial regulation. But Obama notes that McCain told the Wall Street Journal in March, "I'm always for less regulation," and that he's "fundamentally a deregulator."
"John McCain cannot be trusted to re-establish proper oversight of our financial markets for one simple reason: He has shown time and again that he does not believe in it," Obama said.
McCain's traditional support for deregulation is in line with Republican orthodoxy, and over the years, some Democrats have also pushed for the government to play a smaller role in the economy. But Obama believes that in the current economic climate, public attitudes have shifted to support more regulation, not less.
"This time — this election — is our chance to stand up and say: enough. Eight is enough!" he said.
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