At Americablog, Robert Arena writes:
Watching John McCain’s economics speech in Wisconsin. It’s like watching a modern day Herbert Hoover live. He really doesn’t get it…
– He went through a castigation of the Fed and basically told them to stay out of this – I mean, does he really not understand that the Fed was designed to regulate the financial markets? These investment and insurance companies, given their enormous size, are effectively a part of the financial services system. That was the rationale for nationalizing them instead of letting them fail. The Fed has been doing exactly what they are supposed to. Now the Treasury Department, that’s a different question – does McCain know the difference? After years on the Commerce Committee one would expect so, but maybe not.
Exaggeration? This is the text of the Green Bay speech from the McCain website:
Finally, the Federal Reserve should get back to its core business of responsibly managing our money supply and inflation. It needs to get out of the business of bailouts. The Fed needs to return to protecting the purchasing power of the dollar. A strong dollar will reduce energy and food prices. It will stimulate sustainable economic growth and get this economy moving again.
Does McCain really think that the economy would be in better shape if Ben Bernanke and company hadn’t been trying everything in the books to counteract the crisis? If so, on what basis? Could he possibly have a clue as to, e.g., what happens to the money supply in a credit crunch? Whether the Fed’s crisis management policies have constituted economic stimulus? (This is not to say that Bernanke and the Fed are infallible by any stretch of the imagination, but as Brad DeLong suggests, we at least want them to avoid the known gross mistakes of the past.)
What’s arguably worse is that this represents some form of his advisers’ “wisdom.” Which is to say, as a big picture matter neither McCain nor his economic advisers deserve to be let anywhere near the tiller of the metaphorical supertanker.