Senator McCain’s embrace of “regulation” as the answer to Wall Street’s ills is vacuous: He isn’t telling us what rules he would put in place, let alone how those rules would have helped in the past or would help in the future. He is, so far, getting away with it because journalists treat “regulation” in the same content-less way. Thus Michael Shear’s Washington Post story today, which treats it as a big flip-flop that McCain used to assail “regulation” and now calls for more of it.
McCain has certainly talked about excessive regulation in the past and sponsored some deregulatory initiatives such as Gramm-Leach-Bliley. (Shear, incidentally, only tells the liberals’ side of the GLB story.) But he has not in practice shown anything close to a generalized hostility to regulation. He has shown a penchant for regulation, often inspired by moralism. He has taken a leading role in promoting regulation of airlines, HMOs, campaign finance, stock options, and boxing, for example. His instinct seems to be to view our financial turmoil solely as a morality play: “Greed” led to excess, and now we need “regulation.” Bad idea.