John McCain risked his credibility as a fiscal hawk when he supported the $700 billion bailout.
Now facing serious competition in the Aug. 24 Arizona primary, the Republican senator is backtracking.
He isn’t saying TARP was a mistake, but he is blaming Hank Paulson and Ben Bernanke for misleading him on the bailout’s structure.
McCain said the pair assured him that the $700 billion Troubled Asset Relief Program would focus on what was seen as the cause of the financial crisis, the housing meltdown.
“Obviously, that didn’t happen,” McCain said in a meeting Thursday with The Republic’s Editorial Board, recounting his decision-making during the critical initial days of the fiscal crisis. “They decided to stabilise the Wall Street institutions, bail out (insurance giant) AIG, bail out Chrysler, bail out General Motors. . . . What they figured was that if they stabilised Wall Street – I guess it was trickle-down economics – that therefore Main Street would be fine.”