McCain Missed a Trick

President Bush did his best to manage the financial crisis in a way that would have enabled John McCain to turn it to his advantage, but the candidate missed his great chance.

His hare-brained week, starting with the Herbert Hoover quote that the economy is "fundamentally sound," ranks among America's greatest attempts at political suicide.

On succeeding days, he raved like King Lear against greed, demanded strangulating financial regulations, urged the firing of Chris Cox, (the best SEC chairman in over 20 years), and concluded by "suspending" his campaign to return to Washington and "fight" for the rescue bill the Republicans then rejected.

McCain should have pounded the cabinet table, made the bailout his own, and sold it as a method of driving a hard bargain for the taxpayers while making the impetuous and avaricious pay for their mistakes.

Unless McCain stages the greatest comeback since Lazarus, (and there were twitches of life in the last debate, so that should not be ruled out), this farrago of blunders will rank alongside Goldwater's "extremism in the defense of liberty is no vice" (1964), George Romney's claim he was "brainwashed" in Saigon (1968), McGovern's demand that Nixon propose more humiliating terms for the US to withdraw from Vietnam than Hanoi was asking for (1972), Carter's encounter with the nasty swimming rabbit (1976), Dukakis's joy-ride in the battle tank (1988), and John Kerry's assertion that he had voted for the Iraq War but then voted not to fund the armed forces (2004).

Only popular presidents, if even they, can lead opinion out of crises during the campaigns to choose their successors. Only Theodore Roosevelt, Eisenhower, and Reagan could have led the nation with unimpaired effectiveness in the event of a major emergency three months before their retirement from the presidency.

When Henry Paulson and Ben Bernanke concluded they could not continue saving some failing companies and allowing others to crash, like Emperor Tiberius in the Roman Coliseum turning thumbs up or down on gladiators, and presented their plan to restore liquidity in the financial system, all was in place for McCain to take a giant stride toward the White House.

Bush covered for McCain, after the nonsense about suspending his campaign, by inviting both candidates to the White House to work out a bill. McCain should have grand-standed constructively, and insisted the measure be called something like the American Family Home Protection and Financial Reform Bill.

It would have been well to emulate Franklin D. Roosevelt, whose name has been bandied about rather unrigorously lately. We might have expected the Democratic leaders, at least, to take pride in one of the greatest chapters in their party's history.

Paulson and Bernanke decided the best course was to do what FDR did with Hoover's Reconstruction Finance Corporation: buy preferred shares in threatened financial institutions at bargain prices for the taxpayers; leave the distressed institutions to sort out their own mistaken investments; extend bank deposit guaranties; and undertake to refinance, where necessary, residential mortgages.

McCain could even have insisted that Lehman be retrieved from Chapter 11, which it should not have been consigned to, and that it be merged with an appropriate suitor.

All was in place for McCain to come snorting out of the White House, taking the credit for turning the "bailout" into a clever financial deal for the taxpayers which would reward the innocent and punish the impetuous and the sleazy.

With only a month to go before what at that time was a toss-up election, President Bush handed McCain the chance to add to the relief measure any flourish he might find politically useful. McCain could have demanded that executive compensation be capped and financial reporting be amplified.

He could have packaged up his entire tax plan, added a vote-flavored stimulus proposal, and presented the whole confection as a statesmanlike, imaginative, just plan of action. He could have held the public's attention all the way to the election.

It was the greatest opening for an incumbent to assist his preferred successor since Lyndon B. Johnson conjured out of thin air a phony peace breakthrough in Vietnam six days before the 1968 election, for the benefit of Hubert Humphrey against Richard Nixon.

It didn't happen. McCain said almost nothing at the White House meeting, and stripped the gears of the Straight Talk Express. The rescue bill that emerged included pay-offs for the wool, rum, horse racing, television, film, and coal industries, as well as the Black Lung Disability Fund, the people of American Samoa, and aid to the manufacture of wooden arrows for children's games of cowboys and Indians. These may all be good causes, but they don't have much to do with strengthening the banking system and stabilizing the mortgage market.

It is little wonder that the American people are clamoring for change, or that Obama now looks more like being undeservedly entrusted with delivering it than McCain.