CBS’s Smith Attacks McCain’s Economic Experience; Responsible For Financial Crisis

On Tuesday’s CBS Early Show, co-host Harry Smith interviewed John McCain about the recent collapse of Wall Street investment banks: " I want to make sure I have this straight now. Yesterday, on the campaign trail, you reiterated that you believe the fundamentals of the economy are strong. At the same time, we understand your campaign is issuing an ad that says the economy is in crisis. Which is it?" After McCain explained that he was referring to American workers, and that there is a crisis, Smith asked: "And the answer for which is what? Because throughout your campaign, you have said you are anti-regulation. Would not oversight have helped avert this crisis?"

Later, Smith asked: "Let me ask you this. Earlier this year on the campaign trail, you said -- or you admitted that you didn't know a lot about the economy. Why should voters trust you in these perilous times with the economy of the United States?" McCain responded: "You know, that's one of the interesting things about having long conversations. The point is, I was chairman of the Commerce Committee. Every part of America's economy, I oversighted. I have a long record, certainly far more extensive of being involved in our economy than Senator Obama does. I understand the economy. I know the issues-" At that point Smith interrupted: "Well, if that's the case, wouldn't you bear more responsibility for some of the crisis we're in then?"

Apparently Smith was skeptical of McCain having been the chairman of the Senate Commerce Committee for four years, from 1997 - 2001. As far as responsibility for the financial crisis, McCain had pointed out earlier in the interview: "Actually, a little -- two years ago, I warned that the oversight of Fannie and Freddie was, was terrible, that we were facing a crisis because of it, or certainly serious problems...But the influence that Fannie and Freddie had in the inside the beltway, old boy network, which led to this kind of corruption is unacceptable and I warned about it a couple of years ago." In fact, it was Democrats who blocked Bush administration proposals to reform Fannie Mae and Freddie Mac in 2003.

Following Smith’s interview with McCain, co-host Maggie Rodriguez interviewed Democratic vice presidential nominee Joe Biden: "Senator McCain just named some of the same culprits that you and Senator Obama blamed for this crisis yesterday, Wall Street greed and excess. And he called for a restructuring of oversight and regulation. You seem to be on the same page." Biden replied: "Well, it seems like John's had an epiphany. 9:00 yesterday morning John thought the economy was going great guns and the Bush Administration is doing well, and today he thinks it's in crisis."

Rodriguez clarified McCain’s statements: "But he said that the American worker is what's strong. That's what he meant and that's what he believes will dig us out. Do you disagree?" Biden then declared: "The American worker is not strong." He quickly added: "The American worker is strong, they've been betrayed. They've been betrayed by a tax policy that absolutely screws them, that, in fact, gives the money to the very wealthiest among us." Rodriguez later challenged Biden: " I think that this morning, Senator, people don't want to look back, they want to look ahead to the next four years...Will you take this opportunity to say specifically and clearly what you and Senator Obama will do to fix this? Give me two or three solutions, I know you've been working on them."

Rodriguez even questioned Barack Obama’s experience in being able to handle an economic crisis: "Let me ask you, finally, Senator Biden, what do you say to voters who wonder if, given the severity of this crisis right now, whether it's the right time to put their faith in a president that has no executive experience and just a handful of years in the Senate?" Biden again lashed out: "I'd say take a look at who they put there -- who, in fact, has had their hand on the wheel the last eight years. Take a look at that. You want four more years of George W. Bush and the laissez faire policies of John McCain...Who got us in this hole? Whose policies? This has been a Republican philosophy of letting Wall Street do what they want and the middle class be dammed...If I sounds like I'm angry, I am fighting mad for the middle class people who have been the scapegoat of this economy because of the policies of the McCains and the Bushes."

Here is the full transcript of the segment:

7:00AM TEASER:

HARRY SMITH: McCain versus Biden. Both candidates are here to face off with their economic prescriptions.

7:01AM TEASER:

MAGGIE RODRIGUEZ: Ahead this morning we're going to talk to presidential candidate John McCain and vice presidential candidate for the Democrats, Joe Biden, about this and what they plan to do to fix it if elected.

7:04AM SEGMENT:

HARRY SMITH: The financial meltdown is now the big topic on the campaign trail. Joining us from Miami, Republican presidential nominee Senator John McCain. Senator, good morning.

JOHN MCCAIN: Good morning, Harry.

SMITH: I want to make sure I have this straight now. Yesterday, on the campaign trail, you reiterated that you believe the fundamentals of the economy are strong. At the same time, we understand your campaign is issuing an ad that says the economy is in crisis. Which is it?

MCCAIN: Well, the economy's in crisis. The fundamentals of our economy are the American worker. The American worker is still the most productive and the hardest working, most industrious worker in the world and I'm proud of them. They have been betrayed by Wall Street, by greed, by excess, and by corruption and they have been done a great disservice, but if someone disagrees that American workers aren't the best in the world, we just have a disagreement. Their the fundamentals of our -- the strength of America. But the point is greed, excess, corruption has betrayed them and now we are facing a crisis.

SMITH: And the answer for which is what? Because throughout your campaign, you have said you are anti-regulation. Would not oversight have helped avert this crisis?

MCCAIN: Actually, a little -- two years ago, I warned that the oversight of Fannie and Freddie was, was terrible, that we were facing a crisis because of it, or certainly serious problems, and the fact is that we saw a relationship between Fannie and Freddie and the Congress, as well as the administration, which caused the housing market, obviously, was a great contributor in the housing market collapsing as it has, which was a big factor in the problems we're having today. But the influence that Fannie and Freddie had in the inside the beltway, old boy network, which led to this kind of corruption is unacceptable and I warned about it a couple of years ago. Do I believe in excess government regulation? Yes. But this patchwork quilt of regulation -- regulating bodies is designed for the 1930s when they were invented.

SMITH: Let me ask you this. Earlier this year on the campaign trail, you said -- or you admitted that you didn't know a lot about the economy. Why should voters trust you in these perilous times with the economy of the United States?

MCCAIN: You know, that's one of the interesting things about having long conversations. The point is, I was chairman of the Commerce Committee. Every part of America's economy, I oversighted. I have a long record, certainly far more extensive of being involved in our economy than Senator Obama does. I understand the economy. I know the issues-

SMITH: Well, if that's the case, wouldn't you bear more responsibility for some of the crisis we're in then?

MCCAIN: I warned about it. I have said that this Fannie and Freddie thing was of the most grave importance. And the point also is that Senator Obama took -- he's the third highest recipient of contributions from Fannie and Freddie. But the real point is here that it's greed, excess, corruption. We're not going to stand for it. We need to make sure that every person who's bank deposit -- has made a bank deposit in a bank, is insured. We need to set up a 9/11 Commission in order to get to the bottom of this and get it fixed, and act to clean up this corruption.

SMITH: Alright.

MCCAIN: What they've done, Harry, is they've violated the social contract that capitalism and the citizen have, and we can't ever let this happen again. I'll make sure it never happens again.

SMITH: Alright, Senator McCain, we thank you so much for your time this morning. Do appreciate it.

MCCAIN: Thanks for having me on, Harry.

SMITH: Alright. Good to see you. Now here's Maggie.

MCCAIN: Joining us now from Washington is Senator Joe Biden, Barack Obama's running mate on the Democratic ticket. Good morning, Senator.

JOE BIDEN: Good morning, Maggie. How are you?

RODRIGUEZ: I'm fine, thank you. Senator McCain just named some of the same culprits that you and Senator Obama blamed for this crisis yesterday, Wall Street greed and excess. And he called for a restructuring of oversight and regulation. You seem to be on the same page.

BIDEN: Well, it seems like John's had an epiphany. 9:00 yesterday morning John thought the economy was going great guns and the Bush Administration is doing well, and today he thinks it's in crisis. And you know, I heard John say that the American people are strong. John ought to come to my old neighborhood and find out that foreclosures are sky high, find out gas and grocery prices are up, find out the middle class people made 2,000 bucks less over this term with the president than they did before he was president. Find out that, in fact, they're in real trouble in terms of their ability to stay in their homes. I mean, I don't understand this. I -- John, quite frankly, confuses me. He was-

RODRIGUEZ: But he said that the American worker is what's strong. That's what he meant and that's what he believes will dig us out. Do you disagree?

BIDEN: The American -- the American worker is not strong. The American worker is strong, they've been betrayed. They've been betrayed by a tax policy that absolutely screws them, that, in fact, gives the money to the very wealthiest among us. They've been betrayed by a policy of laissez faire here. That let the big do what they want, don't regulate them. They've been betrayed not only by Wall Street, but by this administration's policies and the policies John has supported. They've been betrayed-

RODRIGUEZ: I think that this morning, Senator, people don't want to look back, they want to look ahead to the next four years.

BIDEN: Sure they do.

RODRIGUEZ: Will you take this opportunity to say specifically and clearly what you and Senator Obama will do to fix this? Give me two or three solutions, I know you've been working on them.

BIDEN: Unlike the -- our opponents, there are clear solutions. One, do not keep this tax hemorrhaging going. Give the middle class taxpayers a tax break, like we're suggesting. Do not continue the Bush tax cuts that cause us to have to finance our debt through the Chinese to go buy Saudi oil, number one. Number two, invest in infrastructure immediately. Spend $70 billion out there, rebuilding bridges and infrastructure, roads and the rest. Put people to work, get jobs going. Three, change the way in which we have bankruptcy work, so that a bankruptcy judge can say to a creditor, you know what, we're going to renegotiate, we're going to restate the principal mortgagor, so this person can stay in their house. Give people a fighting chance, instead of the tax policy, and the spending policies, and the policies of this administration.

RODRIGUEZ: Let me ask you, finally, Senator Biden, what do you say to voters who wonder if, given the severity of this crisis right now, whether it's the right time to put their faith in a president that has no executive experience and just a handful of years in the Senate?

BIDEN: I'd say take a look at who they put there -- who, in fact, has had their hand on the wheel the last eight years. Take a look at that. You want four more years of George W. Bush and the laissez faire policies of John McCain, with no regulation over the very people he's now calling predators, then, in fact, continue it. My lord, take a look at what. Who got us in this hole? Whose policies? This has been a Republican philosophy of letting Wall Street do what they want and the middle class be dammed. It's about time we change it. If I sounds like I'm angry, I am fighting mad for the middle class people who have been the scapegoat of this economy because of the policies of the McCains and the Bushes.

RODRIGUEZ: Senator Joe Biden, thank you.