John McCain's version of the economic crisis

John McCain spent Monday claiming - as he had countless times before - that the economy was fundamentally

sound. Had he missed the collapse of Lehman Brothers or the sale of Merrill Lynch, which were announced the day before? Did he not notice the agonies of AIG? Was he unaware of the impending layoffs of tens of thousands of Wall Street employees on top of growing unemployment throughout the United States?

On Tuesday, he clarified his remarks. The clarification was far more worrisome than his initial comments. He said that by calling the economy fundamentally sound, what he really meant was that American workers are the best in the world. In the best Karl Rovian fashion, he implied that if you dispute his statement about the economy's firm foundation, you are, in effect, insulting American workers.

Let's get a few things straight. First, no one who is currently running for president does not "believe in American workers." More to the point, the economy is stressed to the breaking point by fundamental problems - in housing, finance, credit, employment, health care and the federal budget - that have been at best neglected, at worst exacerbated during the Bush years. And as a result, American workers have taken a beating.

In clarifying his comments, McCain lavished praise on workers, but ignored their problems. For decades, typical Americans have not been rewarded for their increasing productivity with comparably higher pay or better benefits. The disconnect between work and reward has been especially acute during the Bush years, as workers' incomes fell while corporate profits ballooned.

That is a fundamental flaw in today's economy. It is grounded in policies like a chronically inadequate minimum wage and an increasingly unprogressive tax system, for which McCain offers no alternatives.

As for Wall Street, McCain blamed the meltdown on "unbridled corruption and greed." He called for a commission to find out what happened and propose solutions. His diagnosis and his cure are misguided. The crisis on Wall Street is fundamentally a failure to do the things that temper, detect and punish corruption and greed. It was a failure to police the markets, to enforce rules, to heed and sound warnings and expose questionable products and practices.

The regulatory failure is rooted in a markets-are-good-government-is-bad ideology that has been ascendant as long as McCain has been in Washington and championed by his own party. If McCain adheres to some other belief system, we would like to hear about it.

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