The Economy: McCain's Zig-Zag Express

John McCain's whole campaign is based on the idea that Barack Obama is risky, untested and can't be trusted to protect the nation in a crisis. But this week it was McCain who seemed unpresidential, as his Zigzag Express swerved back and forth across the median strip. His approach to the greatest financial crisis since 1933 was erratic and off-key. Would his presidency be any different?

McCain's first reaction to the climactic events of Sunday, Sept. 14, when Lehman Brothers fell, Merrill Lynch was sold and AIG began to totter, was to repeat his longstanding sound bite that "the fundamentals of the economy are strong." When Obama predictably leapt on this clueless comment with a TV ad, McCain quickly backtracked by saying that he was merely talking about the strength of "the American worker" and anyone who disagreed obviously had a problem understanding the importance of working people. He told the morning shows that he was a Republican in the mold of Teddy Roosevelt, though his true views on free-market economics are more in tune with Herbert Hoover.

This year, that just won't do. So Tuesday, Sept. 16, was John Edwards Day in the McCain camp, as the candidate raged against corporate greed. The goal here was to trade on his reputation as a reformer of campaign finance to confuse voters into thinking he also had a long record as a crusader against the sins of Wall Street. After all, the words "reformer" and "regulator" sound similar. In truth, McCain voted in favor of every deregulatory effort that came up for a vote during his 26 years in Congress and bragged well into 2008 about his free-market "deregulatory" bent. As the The Washington Post pointed out, he did raise concerns about Fannie Mae and Freddie Mac after a report about shoddy accounting, but this was never a focus of his legislative career.

Obama's gauzy attacks on McCain's "philosophy" made him sound like a philosophy professor, which is not exactly the image he needs right now. But his hesitancy during the week looked more prudent than McCain's forthright and impassioned arguments on all sides of all issues. McCain opposed bailing out AIG before he supported it, then opposed it again. He voted to confirm former representative Chris Cox as chairman of the Securities and Exchange Commission in 2005 and uttered no criticism of him until this week when he said Cox had "betrayed the public trust" and that he would fire him (though the president has no power to do so). When that didn't go over well, he called Cox "a good man" and dropped talk of trying to force his resignation.

The big fight of the week was over who had the most evil lobbyists on staff. The McCain campaign launched a broadside at Obama for taking advice from Franklin Raines, a disgraced former chief of Fannie Mae. But Raines was never an Obama adviser and had much less contact with the Obama campaign than a top lobbyist for Fannie and Freddie had with the McCain campaign. That lobbyist's name is Rick Davis and he's McCain's campaign manager. "People with seven glass houses shouldn't throw stones," gibed the Obama campaign. Obama himself, rising to the occasion, went after the hypocrisy of McCain's faux populist attacks on "the old boys network" in Washington when he has several of the most powerful lobbyists in town working for him. "The old boys network?" Obama said. "In the McCain campaign, that's called a staff meeting."

Friday, when Treasury Secretary Henry Paulson announced the largest financial restructuring in the history of the United States, was a time for sober reflection and nonpartisan leadership. It would have been nice if politicians had a moment of honesty and announced "the era of Big Government is back" or "We are all socialists now," but it's understandable why they did not. President Bush, perceiving the requirements of the day, spoke in measured and bipartisan tones. So did Obama. McCain, by contrast, used the solemn occasion to unleash more harsh and tone-deaf shots at Obama. And he expects us to believe he wouldn't be a highly partisan president when that suited his purposes?

My own experience with McCain on these regulatory issues dates back to 1995 when he emerged from the dishonor of the "Keating Five" savings-and-loan scandal with a new fervor for regulating money in politics but no apparent interest in regulating the abuses of a financial-services industry that had brought him such shame.

I remember attending that year's GOP Florida straw poll, where the scrambling for the 1996 presidential campaign was well underway. When I walked in the door, McCain was handing out Phil Gramm for President literature. I asked, Why aren't you for Bob Dole? Fellow war hero, treasured Senate colleague. McCain said that Gramm was an old friend and he liked his views on the economy. But he's prickly, unappealing and obnoxious, I said, reflecting the conventional wisdom in Washington. You can't possibly think he's the best person in the whole country to be president! (One of the great things about McCain was that until this year you could actually say stuff like that to him.) McCain laughed but loyally stuck with Gramm, who spent millions going nowhere in the primaries. Four years later, Gramm, in character, returned McCain's loyalty by endorsing George W. Bush.

More important, Gramm slipped language into 1999 legislation that essentially deregulated all the fancy new Wall Street products that got us into this mess. His wife, Wendy Gramm, used her position as chair of the Commodities Futures Trading Commission to legitimize the questionable trading practices that led to the Enron scandal. Instead of recognizing that Gramm's radical free-market views were out of step with the realities of the post-Enron world, McCain hired him as his top economic adviser in the 2008 campaign. Had Gramm not said that the United States is "a nation of whiners" in a "mental recession" but facing no serious economic difficulty, he would have likely been McCain's secretary of the Treasury. The gaffes meant Gramm had to resign his formal position with the campaign, but he has continued to informally advise McCain on the economy (they appeared together at the Aspen Institute this summer) and would likely be rehabilitated in a McCain presidency.

Or maybe not. With McCain, the United States would get the one thing investors most loath: uncertainty. On Tuesday, President McCain would say one thing, on Wednesday another and on Thursday and Friday he'd be back to what he said on Monday. At best, Uncle Ziggy would drive us all over the road; at worst, we'd be back in the ditch.