Almost unnoticed amidst the hoopla over Treasury man Paulson's
RTC-like rescue announcement to buy toxic assets from banks and unclog
the credit system to promote economic recovery — a plan I support — Sen.
John McCain gave a thoughtful speech today before a chamber-of-
commerce group in Green Bay, Wisconsin.
The senator will undoubtedly support Paulson's plan. But he hinted at
some of his concerns about the proliferation of bailouts going on in
Washington. McCain has his own idea for a mortgage and financial trust that
would be part of the Treasury Department and help troubled institutions. But
he jabbed at both the Fed and Treasury by calling for more consistent
policies and actions. "We need to enhance regulatory clarity by holding the
same financial activity to one regulatory standard," said McCain.
But the most interesting part of Big Mac's speech was his criticism of
the Federal Reserve. And I'll quote it in full: "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."
This is very good stuff. The senator is saying a strong dollar will
promote economic recovery through lower inflation and more consumer
confidence. He is dead right. It's the first time I can recall him being this
explicit about money.
Elsewhere in the speech McCain repeated his call to keep taxes low
and to slash the corporate tax rate. He also renewed his free-trade call and
talked about drilling for more energy supplies across the board.
I can't help but think that the more Mr. McCain talks about a strong
dollar and low taxes as an economic-recovery tonic the closer he will move
to a November victory.