McCain: Mr. President, Fire Chris Cox

CEDAR RAPIDS, Iowa (Reuters) – Republican presidential nominee John McCain said on Thursday a top Bush administration official should be fired for failing to regulate Wall Street and allowing markets to be used as a casino.

McCain’s blunt call for the firing of Securities and Exchange Commission Chairman Christopher Cox allowed him to try to separate himself further from President George W. Bush at a time when Democrats want to portray McCain as a clone of the unpopular Republican leader.

And it also was intended to show McCain as willing to shake up Washington and make a tough decision, while his campaign slammed Democrat Barack Obama as indecisive for failing to say whether he approved of the government’s $85 billion rescue of of faltering insurance giant AIG on Tuesday.

Cox, a Republican and a former member of the U.S. House of Representatives from California, is in charge of the SEC, a government agency responsible for protecting investors and maintaining orderly financial markets.

“The primary regulator of Wall Street, the Securities and Exchange Commission kept in place trading rules that let speculators and hedge funds turn our markets into a casino,” McCain told a rally in the electoral battleground state of Iowa.

“The chairman of the SEC serves at the appointment of the president and in my view has betrayed the public’s trust,” he said. “If I were president today, I would fire him.”

The White House appeared to have been surprised by McCain’s strong words about Cox. Spokeswoman Dana Perino said Bush backs Cox and has confidence in him.

TROUBLED INSTITUTIONS

The Arizona senator, who faces Obama in the November 4 election, also called for a new Mortgage and Financial Institutions trust to work with regulators and the private sector to strengthen weak financial institutions before they become insolvent.

“For troubled institutions this will provide an orderly process through which to identify bad loans and eventually sell them,” McCain said.

McCain also attempted to tie Obama with former officials of Fannie Mae and Freddie Mac, two troubled mortgage giants that the government had to bail out earlier this month. McCain said Obama had taken more campaign contributions from Fannie and Freddie executives than any other senator except one.

“Whose side do you think he is on.” McCain said. “When I pushed legislation to reform Fannie Mae and Freddie Mac, Sen. Obama was silent.”

McCain was trying to get out in front on the debate over how to restore health to the U.S. economy and demonstrate he is more capable of doing it than Obama.

Public opinion polls show Obama more trusted to handle the economy than McCain, an impression that the Arizona senator may have contributed to by saying this week that the fundamentals of the economy were strong.

McCain’s criticism of Cox came the same day new SEC rules took effect, making it more difficult for traders to knowingly make abusive short sales, a practice already illegal.

McCain, who this week promised a broad overhaul of ruled governing financial markets, has favored less regulation throughout his long Senate career.

Democrats were not impressed with McCain’s comments.

Senate Majority Leader Harry Reid, a Nevada Democrat, called it a typical move by McCain to “go after the first person you can to divert attention from your own failures.”

Sen. Charles Schumer, New York Democrat, said McCain and Bush have both supported deregulation and that maybe McCain should “ask that Bush be fired instead of Cox.”

By Jeff Mason
(Additional reporting by Jeremy Pelofsky, writing by Steve Holland, editing by David Wiessler)