McCain Embraces Regulation After Many Years of Opposition

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McCain: Greed Created Wall Street's Problems

Republican presidential nominee John McCain says Wall Street's financial turmoil is the result of unchecked corporate greed.

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Obama released a TV ad that mocks McCain for saying on Monday that "the fundamentals of our economy are strong" and asks: "How can John McCain fix our economy if he doesn't understand it's broken?"

He also poked fun at McCain for proposing a commission to examine the crisis, calling that "the oldest Washington stunt in the book."

"This isn't 9/11. We know how we got into this mess," Obama said. "What we need now is leadership that gets us out. I'll provide it, John McCain won't, and that's the choice for the American people in this election."

Obama reiterated his economic proposals: a stimulus plan and protections for struggling homeowners. Over the long term, he proposes enhancing regulations of the financial markets, including creating an advisory panel to regularly update the president.

McCain's proposed changes for the system were equally vague.

"There will be constant access to the books and accounts of our banks and other financial institutions," he said. "By law, it will reduce the debt and risk that any bank can take on. And above all, I promise reforms to prevent the kind of wild speculation that can put our markets at risk, and has already inflicted such enormous damage across our economy."

McCain offered his own TV ad promising to "reform Wall Street" and pass "new rules for fairness and honesty," adding: "I won't tolerate a system that puts you and your family at risk. Your savings, your jobs . . . I'll keep them safe," the ad says.

He did not describe how he would bring greater transparency to the process. His senior policy adviser, Douglas Holtz-Eakin, told reporters earlier in the day that there was no need for McCain to be specific right now.

"There's no magic solutions, and I don't think it's imperative at this moment to write down what the plan should be," he said. "The real issue here is a leadership issue.''

McCain stumbled Monday when the financial crisis peaked, first saying the "fundamentals" of the economy were strong. After being hammered by Obama and the Democrats -- "What economy is he talking about?" Obama asked -- he said that he knows the economy is in crisis, but that the basis of the American economy, the American worker, is strong.

By Tuesday, McCain had retooled the message further, and tried to wrap the financial meltdown into his campaign's greater message about changing "the way Washington does business."

McCain has not always opposed government regulation. He supported efforts to allow the Food and Drug Administration to regulate tobacco. And he pushed to strengthen the Sarbanes-Oxley Act requirements, which were put in place after the accounting scandals involving Enron and other major firms.

But he has usually reverted to the role of an unabashed deregulator. In 2007, he told a group of bloggers on a conference call that he regretted his vote on the Sarbanes-Oxley bill, which has been castigated by many executives as too heavy-handed.

In the 1990s, he backed an unsuccessful effort to create a moratorium on all new government regulation. And in 1996, he was one of only five senators to oppose a comprehensive telecommunications act, saying it did not go far enough in deregulating the industry.

As chairman of the Senate Commerce Committee for more than a decade, McCain did not have direct oversight of the financial sector. But he sat at the center of arguments between telephone, cable and satellite companies, almost always pressing for more competition.

"I'm always for less regulation," he told the Wall Street Journal in March. He added: "I'd like to see a lot of the unnecessary government regulations eliminated."

Staff writers Robert Barnes and Anne E. Kornblut and political researcher Alice Crites contributed to this report.