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I'd like to give you a little straight talk, a couple of minutes of straight talk. We need reform in Washington and Wall Street. The financial markets are in crisis. Times are tough. Enormous strain is being put on American families and individuals in this country. I know that the events unfolding can be difficult to understand for many Americans. The dominos that we have seen fall this week began with the corruption and manipulation of our home loan system. The reason this crisis started was the abuses that took place within our home loan agencies, Fannie Mae and Freddie Mac, and -- and within our home loan system.
Two years ago I warned this administration and Congress that regulations for our home loan agencies that you know of and barely heard of, Fannie Mae and Freddie Mac, needed to be fixed. But I'm sorry to stand before you and tell you that nothing was done.
You know, Senator Obama talks a tough game on the financial markets, but the facts tell a very different story. He took more money from Fannie and Freddie than any senator except the Democratic chairman of the committee that regulates them. (Boos.) He put -- he put the chief executive officer of Fannie Mae -- excuse me, of -- yes, of Fannie Mae, who helped create this disaster -- he put that Democratic -- of the -- in charge of the selection process for who he was going to select for vice president of the United States. (Boos.) You know what, former -- Fannie's former general counsel is a senior advisor to his campaign. Whose side do you think he's on?
When I pushed legislation to reform Fannie Mae and Freddie Mac, Senator Obama was silent. He didn't lift a finger to avert this crisis. While the leaders of Fannie and Freddie were lining the pockets of his campaign, and they were sowing the seeds of the financial crisis we see today, and they also enriched themselves with millions of dollars in payments, that's not change; that's what's broken in Washington today, my friends. (Cheers, applause.)
My friends, I've got to give you a little more straight talk. There was no transparency in the books of the Wall Street banks. Banks and brokers took on huge amounts of debt and they hid the riskiest of all investments. Mismanagement and greed became the operating standard, while regulators were asleep at the switch. The regulators were asleep, my friends; they were not working for you.
The primary regulator of Wall Street is the Securities and Exchange Commission -- we call the SEC -- kept in place trading rules that let speculators and hedge funds turn our markets into a casino. They allowed naked short selling, which simply means you can sell stock without ever owning it. They eliminated last year an important rule called the uptick rule, that has protected investors for 70 years. Speculators pounded the shares of even good companies into the ground.
The chairman of the SEC serves at the appointment of the president, and in my view has betrayed the public trust. If I were president today, I would fire him. (Cheers, applause.)
We can't wait any longer for more failures in our financial system. Structures like the Resolution Trust Corporation that dealt with the failed savings and loan industry were designed to clean up the system and worked. Today we need a plan that doesn't wait until the system fails.
I'm calling for the creation of the Mortgage and Financial Institutions Trust, the MFI. The priorities of this trust will be to work with the private sector and regulators to identify institutions that are weak and take remedies to strengthen them before they become insolvent. For troubled institutions, this will provide an orderly process through which to identify bad loans and eventually sell them.
This will get the Treasury and other financial regulatory authorities in a proactive position instead of reacting in a crisis mode to one situation after the other. The MFI will enhance investor and market confidence, benefit sound financial institutions, assist troubled institutions, and protect our financial system, while minimizing taxpayer exposure. Tomorrow I'll be talking in greater detail about the crisis facing our markets, and what I'll do as president to fix this crisis and get our economy moving again. We have to do it for you and for America. (Cheers, applause.)
Senator Obama has never made the kind tough reform we need today. His idea of reform is what his party leaders in Congress order him to do. You know, we tried for bipartisan ethics reform, and he walked away from it because his bosses didn't want real change. I know how to make the change that Senator Obama and this Congress is afraid of. And I've fought both parties -- I've fought both parties to shake up up Washington, and I'm going to do it as president. (Cheers, applause.)
AUDIENCE: (Chanting.) John McCain! John McCain! John McCain! John McCain! John McCain! John McCain! John McCain! John McCain! John McCain! John McCain! John McCain!
SEN. MCCAIN: You know, my friends, those same congressional leaders who give Senator Obama his marching orders are now saying, incredibly, that this mess isn't their fault and they aren't going to take any action on this crisis until after the election. (Boos.) Senator Obama's own advisers are saying that the crisis will benefit him politically. My friends, that's the kind of me-first, country- second politics that are broken in Washington. (Cheers, applause.) My opponent sees an -- my opponent sees an economic crisis as a political opportunity instead of a time to lead. Senator Obama isn't change, he's part of the problem with Washington. (Cheers, applause.)
When AIG was bailed out, I didn't like it, but I understood it needed to be done to protect hardworking Americans with insurance policies and annuities. Senator Obama didn't take a position. On the biggest issue of the day, he didn't know what to think. He may not realize it, but you don't get to vote present as president of the United States. (Cheers, applause.)
While Senator Obama and congressional leaders don't know what to think about the current crisis, we know what their plans are for the economy. Today, Senator Obama's running mate said that raising taxes is patriotic. (Boos.) Raising taxes in a tough economy isn't patriotic. It's not a badge of honor. It's just plain dumb. (Laughter, cheers, applause.) Billions in tax increases that Senator Obama is proposing would kill even more jobs during tough economic times. I'm not going to let that happen. (Cheers, applause.)
I've seen tough times before and I know how to shake up Wall Street and Washington, and I'll get this economy moving. I'll lead through this crisis by fighting for you. (Cheers, applause.) And when I am president, we'll be stronger than ever before.