Sen. John McCain defended deregulation on Wall Street even as he endorsed a $700 billion bailout of financial firms in an interview broadcast Sunday.
McCain was asked if he regretted supporting a 1999 law that removed barriers between investment banks and commercial banks that were erected in 1933, in response to the 1929 stock market crash. "No," McCain said. "I think the deregulation was probably helpful to the growth of our economy."
[Sen. Barack] Obama pointed out former Sen. Phil Gramm, one of McCain's economic advisers, was a chief sponsor of the 1999 bill that removed restrictions on investment and commercial banks.
I think Sen. McCain was probably right in that deregulation was helpful to the growth of our economy. It was quite a monster for a while. However, from what I've read--and this is merely my opinion--deregulation is the overriding problem here. "Let the market be" is great in concept, but it forgets one very important thing . You can't change human nature, and uncontrolled greed results in uncontrolled growth, which results in eventual collapse, so much so that this is probably the worst financial crisis since the Depression. The fundamentals of our economy are NOT strong right now, and I don't care what kind of spin you want to put on it. This is big, and government intervention is a necessity. Which, of course, means that we'll all pay in the short term. In the long term, things will recover, and the American taxpayer will probably benefit. For those of us who have a while yet before we reach actual retirement age, we can ride it out. For those who are already retired, or approaching retirement, their investments and funds MUST be protected. Perhaps we can eventually get back to a more laissez faire approach, but I maintain that we can never again deregulate to the point that we have, otherwise our country will be facing a similar crisis a few decades down the road.
Coping in this new world will require adjustments by millions of Americans. We all will have to start living within our means--or preferably below them. If you don't overborrow or overspend, you're far less vulnerable to whatever problems the financial system may have. And remember one other thing: the four most dangerous words in the world for your financial health are "This time, it's different." It's never different. It's always the same, but with bigger numbers.