Candidates address voters' fears

GOLDEN, Colo. - With the Wall Street crisis deepening, the major presidential candidates took divergent approaches in their appeals to anxious voters yesterday, with John McCain casting himself as an outspoken populist outraged at corporate greed and Barack Obama hammering what he called a Republican-led climate of deregulation that McCain championed.

The two campaigns, realizing that voters care most about pocketbook issues, are furiously seeking the upper hand on the economy, battered by repeated aftershocks since the home mortgage crisis began two years ago.

McCain appears to have the more daunting challenge, given his past advocacy of a generally hands-off approach to the private sector, the fact that a fellow Republican has governed for the last eight years, and polls indicating that more voters side with Obama on the economy.

On the defensive for his repeated assertion that the fundamental underpinnings of the American economy remained "strong," McCain portrayed himself as an experienced economic steward who would protect working families. He called for a special commission, akin to the panel that investigated US government failures preceding the Sept. 11, 2001, attacks, to study the roots of the housing crisis and resulting financial mess.

McCain, in a striking departure from his platform of corporate tax breaks and an extension of President Bush's tax cuts, assumed the mantle of economic populist, blasting what he called the "reckless conduct, corruption, and unbridled greed" of Wall Street and railing against multimillion-dollar severance packages for CEOs as "disgraceful."

"Americans put a lot of trust in the bankers and brokerage firms of Wall Street," he said in Tampa. "Too many people on Wall Street have been recklessly wagering," he continued, on "an endless quest for easy money."

In a new national television ad unveiled late yesterday, McCain declared that the "economy is in crisis," and promised: "I'll meet this financial crisis head-on. Reform Wall Street, new rules for fairness and honesty. I won't tolerate a system that puts you and your family at risk. Your savings, your jobs, I'll keep them safe."

But Obama, in a new hard-hitting TV ad of his own and a forceful address at the Colorado School of Mines outside Denver, refused to let McCain off the hook yesterday, linking the country's financial crisis to the kind of weak oversight from Washington that he said McCain had supported up to now.

"What we've seen the last few days is nothing less than the final verdict on an economic philosophy that has completely failed," Obama told 2,200 people packed into the college gym. "This is what happens when you confuse the free market with a free license to let special interests take whatever they [can] get."

Though McCain yesterday lamented that Wall Street had grown used to "casual oversight by regulatory agencies in Washington," Obama said that 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."

Obama also attacked McCain's proposal for a special government commission as "the oldest Washington stunt in the book."

"You pass the buck to a commission to study the problem," Obama said. "This isn't 9/11. We know how we got into this mess. What we need now is leadership that gets us out. I'll provide it. John McCain won't."

Both candidates called for greater transparency by financial companies and streamlining the government's patchwork of regulatory agencies, and also sought to show they had anticipated the current crisis and had records to bolster their assertions.

McCain pointed to his expressions of concern two years ago over proper oversight of Fannie Mae and Freddie Mac, the government-backed private lending giants that federal officials took over last week to prevent their collapse. "If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole," he said in May 2006.

McCain has acknowledged that the economy is not his strong suit, but he argued yesterday that his past chairmanship of the Senate Commerce Committee gave him more economic experience than Obama.

"He talks a tough game on the financial crisis, but the facts tell a different story," McCain said at a rally in Vienna, Ohio. "Senator Obama took more money from Fannie Mae and Freddie Mac than anyone but the chairman of the committee they answer to. And he put Fannie Mae's CEO, who helped create this problem, in charge of finding his vice president. That's not change, that's what's broken in Washington."

For his part, Obama told voters in Colorado that he introduced legislation in February 2006 to halt irresponsible mortgage lending, and subsequently warned top officials at the US Treasury and Federal Reserve about the risks posed by increasing home foreclosures. He also touted his speech a year ago at NASDAQ, in which he said there was "no dividing line between Wall Street and Main Street." And he asserted his economic stimulus plan earlier this year formed the basis of the package that passed Congress and gave taxpayers hundreds of dollars in tax rebates. Republicans disputed that, noting the compromise differed from Obama's proposal and that he missed the vote.

While McCain stuck mostly to broad principles, Obama yesterday advocated a series of specific economic fixes, including: requiring that financial institutions maintain a certain level of capital; cracking down on traders who manipulate the markets; a new "Home Score" system so that consumers can see exactly what kind of mortgage they are getting; and a "financial market advisory group" that would meet regularly to assess the "state of our financial markets and the risks they face."

Obama supporters at the rally said the Illinois senator was offering the right prescriptions.

"We need a little more control over what some of these banks and companies are doing - instead of them throwing everyone to the wolves," said Dan Gehrke, a 32-year-old systems engineer from Aurora, Colo. Allowing corporations fewer restrictions by deregulating their activities always "sounds great," Gehrke added. "But look what happens."

Senator Richard Shelby of Alabama, a McCain supporter interviewed on MSNBC yesterday, said McCain was right to advocate for more stringent regulation. "We are going to be looking . . . at the structure of our financial regulators," said Shelby, the ranking Republican on the Senate Banking Committee. "We will do it in the next Congress."

Scott Helman can be reached at shelman@globe.com.