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’m gonna 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.”
- Treasury Sets Up Money Market Funds Guarantee
- Think Banks Are Out of the Woods? Think Again
- Crescenzi: Fed's Balance Sheet Fueling Rally
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.