Summary
- Obama has in fact made several statements about the crisis on Wall Street in recent days, delivering his most specific remarks on how government regulations should be changed on Sept. 22, a day before this ad was released.
- McCain gave his most detailed speech on a response to the crisis on Sept. 19, a few days before Obama did. Obama, however, had been pushing for what he called a “21st century regulatory system” back in March.
- The "mum" quote is from a Sept. 20 Washington Times story, which went on to say Obama did "not to divulge details of his recovery plan … fearing it would stir Wall Street jitters." The ad falsely says that Obama stayed quiet because "no one knows what to do."
- The ad ends by saying: "More taxes. No leadership. A risk your family can’t afford." Actually, most "families" would pay less taxes under Obama's tax plan. An independent analysis shows 95.5 percent of households with children would get a tax cut under his tax proposals.
Analysis
The McCain-Palin campaign released a new ad Sept. 23 that claims McCain has done all sorts of things to stem the economic crisis while Obama has said nothing about it. That's false.
[TET ] McCain-Palin 2008: "Mum"
Announcer: In crisis, experience matters.McCain and his Congressional allies led.Tough rules on Wall Street.Stop CEO rip-offs. Protect your savings and pensions.
Obama and his liberal allies? Mum on the market crisis.Because no one knows what to do.More taxes. No leadership.A risk your family can't afford.
John McCain: I'm John McCain and I approve this message. [/TET]
Not So 'Mum' After All
The ad says Obama has been “mum on the market crisis,” as that quote appears on screen. But on Sept. 22 (that’s a day before the ad was released) Obama gave a speech in Green Bay, Wisc., laying out a six-point plan for expanding oversight of financial institutions, streamlining government regulatory agencies, investigating and punishing market manipulation, and establishing a “financial market advisory group to meet regularly and provide advice to the president, Congress, and regulators on the state of our financial markets and the risks they face.” These are the same six points Obama was pushing back in March when he called for a “21st century regulatory system.”
Earlier last week, on Sept. 18, Obama was certainly less specific but still proposed a Homeowner and Financial Support Act that he said would give capital to the financial system and mortgage adjustment assistance to homeowners. (A news article mentioning that proposal was even included in the McCain campaign support for its ad.)
On Sept. 19, he said that “given the gravity of this situation, and based on conversations I have had with both Secretary Paulson and Chairman Bernanke, I have asked my economic team to refrain from presenting a more detailed blue-print of how an immediate plan might be structured until the Treasury and the Federal Reserve have had an opportunity to present their proposal,” adding that their work should be “unimpeded by partisan wrangling.” Yet he talked about aspects he would like to see in such a plan, saying that it shouldn't reward "particular companies or the imprudent decisions of borrowers or lenders" and that it shouldn't "enhance the personal gain of CEOs." He also said it should be a temporary plan with new regulations on financial institutions and one that is “a globally coordinated effort with our partners in the G-20.”
On Sept. 21, he made another statement saying that the plan should protect taxpayers’ investment and homeowners and that over time the regulatory structure should be changed. All of these comments led up to his lengthier Sept. 22 speech.
That doesn’t sound like Obama being “mum” to us.
The actual “mum” quote comes from a Sept. 20 Washington Times article that went on to say Obama “opted Friday not to divulge details of his recovery plan for the financial crisis after a morning meeting with his top economic advisers — fearing it would stir Wall Street jitters.”
The McCain ad also claims Obama was silent “because ‘no one knows what to do.’ ”
But those weren't his words. They came from Senate Majority Leader Harry Reid (who is pictured in the ad) in an article saying that Congress may not take action on the financial crisis before it adjourns for the election. The Bloomberg article said, “While they haven’t ruled out returning after the Nov. 4 elections, they would rather wait until next year unless Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke, who are leading efforts to contain the crisis, call for help.”
It's true that McCain gave a speech outlining his six-point economic plan on Sept. 19, while Obama's most specific speech came a few days later, on Sept. 22. But, as we said, the regulatory principles Obama laid out in that talk were the same ones he had espoused for nearly six months. A few of the two candidates' proposals are similar.
In its support for this ad, the McCain-Palin campaign also points to press reports noting that Obama wouldn’t say whether or not he agreed with the federal government’s decision to bail out insurance company AIG. But is silence any worse than flip-flopping? It should be noted McCain himself said he opposed a bail out one day, then softened his position the next day and said he "didn't want to do that" but millions of people "were at risk." Obama’s running mate, Joe Biden, also initially said he opposed the idea. Obama told NBC’s “Today”: “I think Joe should have waited as well.”
Leading on the Issue
The McCain-Palin ad says “McCain and his Congressional allies led” and lists a few measures they led on – “Tough rules on Wall Street. Stop CEO rip-offs.” The wording may give some viewers the impression that these are examples of legislation McCain already has introduced or pushed through Congress. But these are proposals McCain made Sept. 19 in a speech in Green Bay (a popular spot, it appears, for big economic speeches).
The “stop CEO rip-offs” claim, for example, is a reference to this line in McCain’s speech: “And corporate governance rules will be reformed so that shareholders have a clear say in determining the pay of CEOs and other senior executives. On my watch, the consequences for corporate abuse will not be more enrichment, but more likely an indictment.”
We make no judgment as to which candidate offers better or more effective solutions to the financial crisis or limiting corporate CEOs pay checks. But the record shows that Obama has not been quiet on such issues and indeed has proposed measures for some time on the same topics the ad claims McCain has "led" on.
The Obama campaign points out that its candidate has called for controls on executive compensation much earlier, sponsoring “say-on-pay” legislation in April 2007 that would have required public companies to hold a nonbinding shareholders vote on CEO pay. McCain hadn’t signed on to the bill, and a senior adviser told the Wall Street Journal that McCain opposed government regulations aiming to fix executive-pay issues:
Wall Street Journal (April 12, 2008): Democrats support a Senate bill that would require public companies to give shareholders an annual nonbinding vote on top officers’ compensation. Sen. Obama, of Illinois, introduced the measure, similar to one that passed the House last year. … Obama staffers recently renewed his request for Senate hearings on the measure. If the ‘say-on-pay’ bill doesn’t pass this year, it ‘will be a priority for Sen. Obama as president,’ campaign policy director Heather Higginbottom says. … Sen. McCain hasn’t taken a stance on the say-on-pay bill, and opposes legislative or regulatory cures for executive-pay problems, says senior policy adviser Douglas Holtz-Eakin. … He adds that the senator believes the private sector could take steps "to end the cozy relationships that surround these pay packages."
In his Sept. 19 speech, McCain also called for the creation of a “Mortgage and Financial Institutions trust — the MFI,” which would “keep people in their homes and safe guard the life savings of all Americans by protecting our financial system and capital markets.” Sounds awfully similar to the pronouncements of another presidential candidate.
More on Taxes
The ad ends with a familiar refrain from the McCain camp — “more taxes.” It’s true that Obama says he won’t extend the Bush tax cuts for couples earning more than $250,000 a year. But the ad implies that many more families would be affected by the Obama plan by saying: “More taxes. No leadership. A risk your family can’t afford.”
The vast majority of "families," however, wouldn't be affected by a tax increase on those making more than $250k. In fact, an analysis of the candidates’ tax plans by the Urban Institute-Brookings Tax Policy Center found that 95.5 percent of households with children would get a tax cut under Obama’s plan. And overall, 81.3 percent of all households would see a tax cut.
–- by Lori Robertson
Sources
Obama, Barack. Speech in Green Bay, Wisc., 22 Sept. 2008.
Obama, Barack. Economic speech at Cooper Union in New York, 27 March 2008.
Montanaro, Domenico. “More Obama Economics Proposals.” MSNBC’s First Read, 18 Sept. 2008.
“Statement from Obama on Emerging Federal Reserve-Treasury Plan.” BarackObama.com, 19 Sept. 2008.
“A Statement of Principles for the Treasury Proposal from Senator Barack Obama.” BarackObama.com, 21 Sept. 2008.
Jensen, Kristin. “Democratic Congress May Adjourn, Leave Crisis to Fed, Treasury.” Bloomberg, 18 Sept. 2008.
Johnson, Glen. “McCain backtracks on opposition to AIG bailout.” Associated Press, 17 Sept. 2008.
Martin, Jonathan. “McCain now appears to back AIG bailout.” Politico.com, 17 Sept. 2008.
Tapper, Jake. “Obama on Biden’s Initial Opposition to AIG Bailout: ‘Joe Should Have Waited.” ABCNews.com, 23 Sept. 2008. U.S. Senate. S. 1181. GPO, 20 April 2007.
McCain, John. “Remarks by John McCain on Our Financial Markets.” JohnMcCain.com, 19 Sept. 2008.
Table T08-0203 Senator Obama’s Tax Proposals of August 14, 2008: Economic Advisers’ Version, Distribution of Federal Tax Change by Cash Income Percentile, 2009. Tax Policy Center, 14 Aug. 2008.