Three Years Late: McCain Says Cox Wrong for SEC

Remember when John McCain's economic guru, Phil Gramm, got in trouble for saying that Americans were whining about a financial mess that the Republican nominee for president now says is "a crisis"? McCain grudgingly parted company with Gramm, only to have the former senator from Wall Street (via Texas) show up at the Republican National Convention as a VIP guest of, you guessed it, the McCain campaign.

Well, now, McCain is attacking Securities and Exchange Commission (SEC) Chairman Chris Cox.

Speaking in Iowa, the Republican candidate savaged Cox, saying, "The chairman of the SEC serves at the appointment of the president. And in my view has betrayed the public trust.has betrayed the public's trust."

McCain, who is scrambling to distance himself from the Bush administration financial-services policies and so-called regulators that he once supported, added: "If I were president today, I would fire him."

Someone on McCain's staff will have to inform him that president's cannot "fire" SEC chairs -- the heads of independent regulatory commissions, once their presidential nominations are confirmed by the Senate, serve terms that they are allowed to finish. At the most, McCain could merely pressure Cox to quit.

That is, undoubtedly, a good idea.

It would also be a new one for McCain.

Cox, a former California congressman who worked closely with McCain on a number of issues when McCain's Senate Commerce Committee chairmanship coincided with Cox's House Eneregy and Commerce Committee asignment, and who was recently boomed as a prospective vice-presidential running mate for the Republican, will be excused if he feels like he is the one who has been betrayed.

Cox's nomination to serve was considered by the Senate in the summer of 2005, at a time when McCain was positioned, as chair of the Senate Commerce Committee, to raise any concerns he might have had -- and even to hold hearings -- about the selection. As McCain, himself, bragged this week: "I understand the economy. I was chairman of the Commerce Committee that oversights every part of our economy."

While that statement was a bit of a stretch, it is reasonable to suggest that the Commerce Committee chair could have identified an opening (perhaps through the committee's responsibility for overseeing interstate commerce) to hold a hearing and raise concerns about Cox.

Instead, McCain made no complaint and ceded responsibility for reviewing the Cox nomination to the Banking Committee, which has primary responsibility for reviewing SEC nominations. The Banking Committee gave Cox a predictable free ride from the Wall Street-friendly Republicans and Democrats who pack the panel.

McCain is talking tough now.

Could McCain have done more at a point when it might have mattered? Absolutely.

It is not as if Cox's determination to neuter the SEC as a regulatory agency was a secret.

Indeed, McCain had all the fodder he could have possibly needed for a hearing to raise questions about the Cox nomination.

The outgoing SEC chair in 2005, William Donaldson -- a former Yale dean, under Secretary of State, and Wall Street executive -- had frustrated the White House and Republicans in Congress by often siding with the two Democrats on the commission in favor of stricter regulation of banking and financial services. Reportedly under pressure from his fellow Republicans, Donaldson quit two years before his term was done.

When President Bush picked Cox, the BBC summed up the shift with a headline: "New SEC Head Signals Big Change."

"The Securities and Exchange Commission (SEC) is expected to adopt a more 'laissez-faire' approach if Christopher Cox is confirmed as its new chairman," reported the BBC, which noted that, "Current chief William Donaldson quit on Wednesday, raising doubts over whether the finance watchdog will stick to its tough stance on corporate misconduct. Mr Cox, a former corporate lawyer, is seen as close to the finance industry. Experts say he could move the SEC towards a lighter touch on regulation."

The U.S. Chamber of Commerce confirmed the assessment by declaring that the "pendulum is swinging back" away from regulation.

Then-California State Treasurer Phil Angelides, who had known Cox for years, was urging the Senate to reject Mr Cox for the SEC post. "I fear that if Congressman Cox is confirmed, it will spell the death-knell for reform efforts," said Angelides.

McCain did nothing, and when the full Senate considered the Cox nomination in late July, 2005, he raised no objections.

No wonder, then, that as the search for a running-mate for McCain progressed this spring and summer Cox was frequently boomed as aan ideal partner for the Republican nominee.

Republicans in Congress, who knew both men, thought they would fit together well, as did a number of conservative pundits and publications.

Robert Novak reported in March that, "Former conservative colleagues in the House of Representatives are boosting Christopher Cox, chairman of the Securities and Exchange Commission since 2005, to be Sen. John McCain's vice presidential running mate." The National Review hailed Cox as "omnicompetent." The American Spectator dubbed Cox a "first choice."

McCain chose not to partner with Cox this fall, which may well have been the savviest economic move the Republican nominee has ever made.

But let's be clear: McCain's charge of today that Cox ought not be chairing the SEC comes three years too late.

Comments (19)

1. I want to be in the room when those two guys meet again.

   On a side note: I throw up in my mouth a little bit every time I see robert novak's name in print or hear his name spoken. He is a true traitor. While I am nonviolent(I'm too cute and mature to fight), I truly wouldn't mind whooping his ass myself. I'm young. I think I can take him.

   Posted by k330k at 09/18/2008 @ 2:52pm

2. Hmm. Looks like we know now what happens when you don't put regulation in place to stop companies from doing things they shouldn't.

   Oh yeah, they get massive bailouts.

   Posted by Cccomfo1 at 09/18/2008 @ 3:17pm

3. Apparently there are THREE "John McCains" now...

   "Old Old John McCain" from 2000, the Maverick, didn't want Roe overturned, opposed the Bush tax cuts, etc.

   "Old John McCain" from a week or so ago...."fundamentals of our economy are good", Phil Gramm's "mental recession", "I'm fundamentally a de-regulator", etc.

   and now "Newest and Improvest John McCain" of THIS week...who's practically a Democrat again on economic issues like "greed on Wall Street" and "more regulation is necessary".

   BTW, heard him on Hannity yesterday...saying almost exactly that and the Boy Blunder (eating YEARS of "we need free markets", "less regulation", "less talk of 'greed' from the liberal class warriors")...agreed with McCain!

   LOL

   Posted by Maskdelta at 09/18/2008 @ 3:30pm

4. flippy mac! grampa and mrs. mooseburger!

   he's been the biggest flipflopper ever! jeez...

   Posted by dexter666 at 09/18/2008 @ 6:41pm

5. Cox was approved on a voice vote which means there was no objection to him by Democrats. Posted by lvliberty1 at 09/18/2008 @ 7:23pm

   Just because Democrats did it does that mean it dismisses the problem? I like how you assume that because Democrats were complicit that it will make us think it was ok.

   Posted by Cccomfo1 at 09/18/2008 @ 7:49pm

6. Posted by lvliberty1 at 09/18/2008 @ 7:23pm

   LVLIB, McCain said "if I was President, I'd fire Cox"....

   now...as an expert in the inner workings of the Government...

   Can a President fire the head of the SEC?

   Posted by Maskdelta at 09/18/2008 @ 8:14pm

7. Under current law-no.

   Posted by lvliberty1 at 09/18/2008 @ 8:19pm

   So McCain promised today to do something he either--

   A. didn't know he COULDN'T do? (experience)

   B. knows he can't do and is lying? (reformer)

   C. will violate the law? (honor and integrity)

   Posted by Maskdelta at 09/18/2008 @ 10:00pm

8. c?

   Posted by Malcontent at 09/18/2008 @ 11:05pm

9. McCain is such a phony. He's just deflecting the blame. Cox's role is enforcing laws and regulations. If congress and Bush administration take laws off the books and deregulate the banking system, what is Cox supposed to do, enforce the old regs?

   Even if Cox's record and politics denote a "hands-off" philosophy re: oversight of the SEC, it is still up to Congress to make the laws.

   Posted by koroviev at 09/19/2008 @ 04:00am

10. Posted by koroviev at 09/19/2008 @ 04:00am

    Exactly right....Cox is a scapegoat AND alternative LESS DANGEROUS target than going after the Administration or especially Bush.

    He's already pushing his base VERY hard...by suddenly embracing regulation and saying things like "GREED on Wall Street" (sounding like a Dem)....

    they won't tolerate him attacking Bush or anybody THAT close to Bush.

    But they'll allow him to go after Cox, since...duhn,duhn,dhunnnnnnnn...CLINTON nominated him.

    Posted by Maskdelta at 09/19/2008 @ 09:29am

11. You know, I hadn't discovered The Nation untill after the last Dem left office. I can't wait to see how the articles are after (hopefully) Obama wins. What, do they all make some magical transformation to "positive" or something?

    Posted by CHIP THORNTON at 09/19/2008 @ 10:20am

12. What, do they all make some magical transformation to "positive" or something?----Posted by CHIP THORNTON at 09/19/2008 @ 10:20am

    You think "The Nation" LIKED Bill Clinton?!??!?!?!?

    You haven't been here long enough...heheh

    Posted by Maskdelta at 09/19/2008 @ 10:34am

13. Cox was approved on a voice vote which means there was no objection to him by Democrats.

    Posted by lvliberty1 at 09/18/2008 @ 7:23pm

    When Cox was approved, the rethugs had control of both houses did they not?

    Also, who appointed Cox? You can't blame Clinton or Carter, JFK or FDR on this one.

    Posted by Wolfgang1 at 09/19/2008 @ 12:26pm

14. Posted by Wolfgang1 at 09/19/2008 @ 12:26pm

    You know what, WOLF, you're right....I was wrong (there ya go, Darin).

    Clinton asked Cox to be on the Bipartisan Tax & Entitlement Committee...

    BUSH nominated him to SEC and it WAS the GOP Congress of 2005 that approved him!

    Thanks for the correction.

    Posted by Maskdelta at 09/19/2008 @ 1:05pm

15. Thanks for the correction.

    Posted by Maskdelta at 09/19/2008 @ 1:05pm

    No problem Mask. You've set me straight many a time.

    Posted by Wolfgang1 at 09/19/2008 @ 2:01pm

16. It's the Dem's fault...or the liberal media's...or Clinton's...or Hollywood's...blah blah blah

    Posted by Balrog at 09/19/2008 @ 2:02pm

17. Cox was confirmed on a voice vote. That means that Democrats did not see a reason to oppose him or they would have demanded a recorded vote. Posted by lvliberty1 at 09/19/2008 @ 1:51pm

    Again I ask, why does this matter?

    Posted by Cccomfo1 at 09/19/2008 @ 4:58pm

18. Cox is only one of hundreds responsible for this immense disaster.

    For a better look at the growing dimensions of catastrophe:

    www.nytimes.com/2008/09/20/business/20nocera.html?8dpc=&pagewanted=all

    Posted by sloper at 09/19/2008 @ 11:32pm

19. Posted by lvliberty1 at 09/19/2008 @ 1:51pm

    Nobody but McCain talking about firing him, LL.

    And EVERYBODY but McCain seems to remember it's not LEGAL for a President to fire him.

    LOL

    Posted by Maskdelta at 09/20/2008 @ 10:11pm