History Forum / General / British History / July 2008

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Lux et Veritas et Libertas
Vires et Honor

It's the Economic Stupidity, Stupid

By FRANK RICH
July 20, 2008
The New York Times

THE best thing to happen to John McCain was for the three network anchors to
leave him in the dust this week while they chase Barack Obama on his global
Lollapalooza tour. Were voters forced to actually focus on Mr. McCain's
response to our spiraling economic crisis at home, the prospect of his
ascension to the Oval Office could set off a panic that would make the
IndyMac Bank bust in Pasadena look as merry as the Rose Bowl.

"In a time of war," Mr. McCain said last week, "the commander in chief
doesn't
get a learning curve." Fair enough, but he imparted this wisdom in a speech
that was almost a year behind Mr. Obama in recognizing Afghanistan as the
central front in the war against Al Qaeda. Given that it took the deadliest
Taliban suicide bombing in Kabul since 9/11 to get Mr. McCain's attention,
you have to wonder if even General Custer's learning curve was faster than
his.

Mr. McCain still doesn't understand that we can't send troops to Afghanistan
unless they're shifted from Iraq. But simple math, to put it charitably, has
never been his forte. When it comes to the central front of American
anxiety - the economy - his learning curve has flat-lined.

In 2000, he told an interviewer that he would make up for his lack of
attention to "those issues." As he entered the 2008 campaign, Mr. McCain was
still saying the same, vowing to read "Greenspan's book" as a tutorial. Last
weekend, the resolutely analog candidate told The New York Times he is at
last starting to learn how "to get online myself." Perhaps he'll retire his
abacus by Election Day.

Mr. McCain's fiscal ineptitude has received so little scrutiny in some press
quarters that his chief economic adviser, the former Senator Phil Gramm of
Texas, got a free pass until the moment he self-immolated on video by
whining about "a nation of whiners." The McCain-Gramm bond, dating back 15
years, is more scandalous than Mr. Obama's connection with his pastor, the
Rev. Jeremiah Wright. Mr. McCain has been so dependent on Mr. Gramm for
economic policy that he sent him to newspaper editorial board meetings, no
doubt to correct the candidate's numbers much as Joe Lieberman cleans up
after his confusions of Sunni and Shia.

Just two weeks before publicly sharing his thoughts about America's "mental
recession," Mr. Gramm laid out equally incendiary views in a Wall Street
Journal profile that portrayed him as "almost certainly" the McCain choice
for Treasury secretary. Mr. Gramm said that the former chief executive of
AT&T, Ed Whitacre, was "probably the most exploited worker in American
history" since he received only a $158 million pay package rather than the
"billions" he deserved for his success in growing Southwestern Bell.

But no one in the news media seemed to notice Mr. Gramm's naked expression
of the mind-set he'd bring to a McCain White House. And few journalists have
vetted the presumptive Treasury secretary's post-Senate history as an
executive at UBS. The stock of that banking giant has lost 70 percent of its
value in a year after its reckless adventures in the subprime lending
market. It's now fending off federal investigation for helping the megarich
avoid taxes.

Mr. McCain made a big show of banishing Mr. Gramm after his whining "gaffe,"
but it's surely at most a temporary suspension. When the candidate said back
in January that there's nobody he knows who is stronger on economic issues
than his old Senate pal, he was telling the truth. Left to his own devices -
or those of his new No. 1 economic surrogate, Carly Fiorina - Mr. McCain is
clueless. Even Arnold Schwarzenegger, a supporter, said that Mr. McCain's
latest panacea for high gas prices, offshore drilling, is snake oil - and
then announced his availability to serve as energy czar in an Obama
administration.

The term flip-flopping doesn't do justice to Mr. McCain's self-contradictory
economic pronouncements because that implies there's some rational, if
hypocritical, logic at work. What he serves up instead is plain old
incoherence, as if he were compulsively consulting one of those old Magic 8
Balls. In a single 24-hour period in April, Mr. McCain went from saying
there's been "great economic progress" during the Bush presidency to saying
"Americans are not better off than they were eight years ago." He reversed
his initial condemnation of mortgage bailouts in just two weeks.

In February Mr. McCain said he would balance the federal budget by the end
of his first term even while extending the gargantuan Bush tax cuts. In
April he said he'd accomplish this by the end of his second term. In July
he's
again saying he'll do it in his first term. Why not just say he'll do it on
Inauguration Day? It really doesn't matter since he's never supplied real
numbers that would give this promise even a patina of credibility.

Mr. McCain's plan for Social Security reform is "along the lines that
President Bush proposed." Or so he said in March. He came out against such
"privatization" in June (though his policy descriptions still support it).
Last week he indicated he isn't completely clear on what Social Security
does. He called the program's premise - young taxpayers foot the bill for
their elders (including him) - an "absolute disgrace."

Given that Mr. McCain's sole private-sector job was a fleeting stint in
public relations at his father-in-law's beer distributorship, he comes by
his economic ignorance honestly. But there's no A team aboard the Straight
Talk Express to fill him in. His campaign economist, the former Bush adviser
Douglas Holtz-Eakin, could be found in the June 5 issue of American Banker
suggesting even at that late date that we still don't know "the depth of the
housing crisis" and proposing that "monitoring is the right thing to do in
these circumstances."

Ms. Fiorina, the ubiquitous new public face of McCain economic policy, adds
nothing to the mix beyond her incessant display of corporate jargon, from
"trend lines" to "start-ups." Before she was fired at Hewlett-Packard, its
stock had declined 50 percent during her five-plus years in charge. She
missed earning projections - by 23 percent in one quarter - much as she now
misrepresents both the Obama and McCain records. This month she said Mr.
McCain wanted to require insurance plans to cover birth control medications
along with Viagra, when in fact he had voted against it.

Ms. Fiorina received a $42 million payout (half in cash) from H.P.,
according to a shareholders' subsequent lawsuit. With this inspiring résumé,
she now aspires to be Mr. McCain's running mate. So does the irrepressible
Mitt Romney, who actually was a business whiz before serving as
Massachusetts's governor. Beltway wisdom has it that the addition of such a
corporate star will remedy Mr. McCain's fiscal flatulence.

But Mr. Romney, while more plausible than Ms. Fiorina, is hardly what
America wants at this desperate time. His leveraged buyout dealings as
co-founder of Bain Capital induced plant closings, mass layoffs and
outsourcing. If Mr. McCain truly intends to "put our country's interests"
above politics and reach across the aisle to move the nation forward, as he
constantly tells us, why not go for a vice president who's the very best fit
for the huge challenges at hand?

The obvious choice would be Michael Bloomberg - who, as a former Republican
turned independent, would necessitate that Mr. McCain reach only halfway
across the aisle, and to someone who is his friend rather than a vanquished
rival he is learning to tolerate.

Romney vs. Bloomberg is not a close contest. Bloomberg L.P. has roughly
three times the revenues and employees of Bain & Company, where Mr. Romney
ultimately served as chief executive. Mr. Romney rescued the Salt Lake City
Olympics while running it in 2002, but Mayor Bloomberg revitalized New York,
the nation's largest metropolis, after the most devastating attack in our
history. The city he manages has more than twice the budget of Mr. Romney's
state.

Yes, Mr. Bloomberg is a closet Democrat and an alpha dog who doesn't want to
be a second banana. And his views on gay civil rights and abortion would
roil the G.O.P. base. But Mr. Romney shared some of those same views before
he flip-flopped, and besides, these are not ordinary times. Millions of
Americans are losing their homes and jobs. Whole industries are going belly
up. The national crisis at hand, not yesterday's culture wars, should drive
the vice-presidential pick.

Mr. McCain reminds us every day how principled he is. That presumably means
he'd risk a revolt by his party's dwindling agents of intolerance and do
everything in his power to persuade Mr. Bloomberg to join his ticket in the
spirit of patriotic sacrifice. The politics could be advantageous too. A
Bloomberg surprise could impress independents and keep the television
audience tuned in to a G.O.P. convention that will unfold in the shadow of
Mr. Obama's address to 75,000 screaming fans in Denver.

But this is fantasy political baseball, not reality. Mr. McCain, sad to say,
hung up his old maverick's spurs the day he embraced the Bush tax cuts he
had once opposed as "too tilted to the wealthy." And Mr. Bloomberg? It's
hard to picture a titan who built his empire on computer terminals investing
any capital, political or otherwise, in a chief executive who is still
learning how to do, as Mr. McCain puts it, "a Google."