Obama on regulation

He is on the Republican's side of this issue, according to his own words

WALLACE: And we are back now with Senator Barack Obama. Senator, one of the
central themes of your campaign is that you are a uniter, who will reach across
the aisle and create a new kind of politics. Some of your detractors say that
you are a paint by the numbers liberal and I'd like to explore this with
you.
Over the years, John McCain has broken with his party and risked his
career on a number of issues, campaign finance, immigration reform, banning
torture. As a president, can you name a hot button issue where you would be
willing to cross (ph) Democratic party line and say you know what, Republicans
have a better idea here.

OBAMA: Well, I think there are a whole host of areas
where Republicans in some cases may have a better idea.

WALLACE: Such
as.

OBAMA: Well, on issues of regulation, I think that back in the ‘60s and
‘70s, a lot of the way we regulated industry was top down command and control.
We're going to tell businesses exactly how to do things.
And I think that the
Republican party and people who thought about the margins (ph) came with the
notion that you know what, if you simply set some guidelines, some rules and
incentives for businesses, let them figure out how they're going to for example
reduce pollution. And a cap and trade system, for example, is a smarter way of
doing it, controlling pollution, than dictating every single rule that a company
has to abide by, which creates a lot of bureaucracy and red tape and oftentimes
is less efficient.
I think that on issues of education, I have been very
clear about the fact, and sometimes I have gotten in trouble with the teachers
union on this, that we should be experimenting with charter schools. We should
be experimenting with different ways of compensating teachers. That
--
WALLACE: You mean merit pay?
OBAMA: Well, merit pay, the way it has
been designed I think that is based on just single standardized I think is a big
mistake, because the way we measure performance may be skewed by whether or not
the kids are coming in the school already three years or four years
behind.
But I think that having assessment tools and then saying, you know
what, teachers who are on career paths to become better teachers, developing
themselves professionally, that we should pay excellence more. I think that's a
good idea. So --
WALLACE: But, Senator, if I may, I think one of the concerns
that some people have is that you talk a good game about, let's be
post-partisan, let's all come together -- just a couple of quick things, and I
don't really want you to defend each one, I just want to speak to the larger
issue.
The gang of 14, which was a group -- a bipartisan coalition to try to
resolve the nomination -- the issue of judicial nominations. Fourteen senators
came together, you weren't part of it. On some issues where Democrats have moved
to the center, partial-birth abortion, Defense of Marriage Act, you stay on the
left and you are against both.
And so people say, do you really want a
partnership with Republicans or do you really want unconditional surrender from
them?
OBAMA: No, look, I think this is fair. I would point out, though, for
example, that when I voted for a tort reform measure that was fiercely opposed
by the trial lawyers, I got attacked pretty hard from the left.
During the
Roberts --
WALLACE: John Roberts, Supreme Court.
OBAMA: John Roberts
nomination, although I voted against him, I strongly defended some of my
colleagues who had voted for him on the Daily Kos, and was fiercely attacked as
somebody who is, you know, caving in to Republicans on these fights.
In fact,
there are a lot of liberal commentators who think I'm too accommodating. So here
is my philosophy. I want to do what works for the American people. And both at
the state legislative level and at the federal legislative level, I have always
been able to work together with Republicans to find compromise and to find
common ground.

Banking Problems

John McCain has been trying to pull off a move to the right in the past year, including boasts of being against regulation. His detractors have tried using his words against him to tie him to deregulation in the banking industry and therefore to the current credit crisis. The facts don't really back either side.

In Bush's first term, his administration attempted to enact more supervision on Fannie Mae. From the New York Times:

The Bush administration today recommended the most significant regulatory
overhaul in the housing finance industry since the savings and loan crisis a
decade ago.
Under the plan, disclosed at a Congressional hearing today, a
new agency would be created within the Treasury Department to assume supervision
of Fannie Mae and Freddie Mac, the government-sponsored companies that are the
two largest players in the mortgage lending industry.

Opposition to this plan was voiced by Democratic Congressman Barney Frank

Significant details must still be worked out before Congress can approve a
bill. Among the groups denouncing the proposal today were the National
Association of Home Builders and Congressional Democrats who fear that tighter
regulation of the companies could sharply reduce their commitment to financing
low-income and affordable housing.
''These two entities -- Fannie Mae and
Freddie Mac -- are not facing any kind of financial crisis,'' said
Representative Barney Frank of Massachusetts, the ranking Democrat on the
Financial Services Committee. ''The more people exaggerate these problems, the
more pressure there is on these companies, the less we will see in terms of
affordable housing.''

The proposal was never enacted. Republicans, including John McCain tried again three years ago to impose some control on Fannie Mae in a Senate bill. McCain stated the following:

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform
Act of 2005, S. 190, to underscore my support for quick passage of GSE
regulatory reform legislation. If Congress does not act, American taxpayers will
continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose
to the housing market, the overall financial system, and the economy as a
whole.

Once again, the bill was never enacted. Of course it is impossible to say whether this regulation would have prevented was has since happened, but it does prove that McCain was no asleep on the regulation front. He was co-sponsoring a bill to bring about more regulation.

In the Spring of 2007, Austan Goolsbee, who is now a high ranking economic advisor to Barack Obama, praised deregulation of the financial sector as good for the people.

Also, the historical evidence suggests that cracking down on new mortgages
may hit exactly the wrong people. As Professor Rosen explains, “The main thing
that innovations in the mortgage market have done over the past 30 years is to
let in the excluded: the young, the discriminated against, the people without a
lot of money in the bank to use for a down payment.” It has allowed them access
to mortgages whereas lenders would have once just turned them away.

So a Republican was pushing regulation while the Democrat was fighting it. Even Bill Clinton remarked on the trouble he had getting Democrats to help, and tied himself to Republicans.

Bill Clinton on Thursday told ABC's Chris Cuomo that Democrats for years
have been "resisting any efforts by Republicans in the Congress or by me when I
was President to put some standards and tighten up a little on Fannie Mae and
Freddie Mac" (video
available here, relevant section at 2:45).