McCain's 'greed' comment is anti-business as usual

In response to the financial markets' current troubles, John McCain announced at a rally yesterday, "This foundation of our economy, the American worker, is strong but it has been put at risk by the greed and mismanagement of Wall Street and Washington." Sounding more like the donkey nominee than the chosen of the elephant party, he proceeded to call for miles of new red tape in which to snare nasty capitalists.

"Under my reforms, the American people will be protected by comprehensive regulations that will apply the rules and enforce them to the full."

Of course, McCain was promptly slammed by the Obama camp for supposedly attempting to distance himself from his Republican, free-market credentials -- assuming that the GOP is still a market-oriented party. That's a bit of a leap after eight years of mercantilism and metastasizing government under President Bush, but let's go with it.

But the critics were wrong to suggest that McCain was wandering from his roots. He's never been especially comfortable with the idea of economic activity that goes far beyond strict, state-defined parameters. As he told the Wall Street Journal in 2005, his political hero is Teddy Roosevelt, and TR never had much time for laissez-faire -- or for private enterprise at all.

It is here in my conversation with the senator that the McCain economic philosophy starts to come into vivid focus. Throughout our chat he has referred to Theodore Roosevelt in almost reverential terms and glows when I ask about him. He calls TR "my hero . . . and one of our greatest presidents," and at one point he excitedly searches through his briefcase and pulls out a book that he is reading on the famously tumultuous election of 1912. That was when TR bolted from the Republican Party (which Mr. McCain concedes was "a mistake") and formed the Bull Moose Party to dethrone William Taft. When I mention TR's trust-busting (which was mostly counterproductive economically), Mr. McCain really comes to life, exultantly points his finger in the air, smiles and cries out: "He called the trusts 'the malefactors of wealth.'"

So McCain's denunciation of capitalist "greed" on the stump was probably a long-anticipated Teddy Roosevelt moment for him. I suspect he was just waiting for an opportunity to go into economic populist mode.

Of course, the idea that our benighted government is a trustworthy overseer of economic activity is laughable. Are we really to believe that government officials' competence and ethics are so superior to that of private business people, that the state should be allowed to substitute its judgment for that of people actually participating in the market?

Remember, when private businesses screw up, they get punished with loss of profits and -- eventually -- bankruptcy as competitors move in to take over. (Never mind that governments often move in to shore-up losers like AIG -- and push aside tax-dollar-free private offers in the process. That's another mark against the judgment of government officials.)

We're talking about a federal government that admits to running up $9.6 trillion in debt. And that's without counting the $99 trillion or so in unfunded liabilities for Social Security and Medicare. That sort of performance can only be sustained by entities that can use military force to keep competitors from moving in and acquiring what's left of the failed venture at a deep discount.

So McCain was in usual form when he denounced private enterprise and called for a greater state role in the economy. And his misplaced faith in government is a sad statement on what passes for his economic philosophy.