Posted on 09/18/2008 2:55:02 PM PDT by NoLibZone
ABC News' David Wright reports: At a joint rally in Cedar Rapids, Iowa Thursday, Republican John McCain slammed the Security and Exchange Commission (SEC) for being "asleep at the switch" saying that if he were president, he would fire Chris Cox, the chairman of the SEC since 2005 and a former Republican congressman.
McCain said the SEC has allowed trading practices such as short selling to stay in place that turned the "markets into a casino."
"The regulators were asleep, my friends," McCain said. "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."
But while the president nominates and the Senate confirms the SEC chair, a commissioner of an independent regulatory commission cannot be removed by the president.
From time to time, presidents have attempted to remove commissioners who have proven "uncooperative." However, the courts have general upheld the independence of commissioners. In 1935, President Franklin Delano Roosevelt fired a member of the Federal Trade Commission and the Supreme Court ruled the president acted unconstitutionally.
Asked how McCain would fire Cox if the president does not have the formal power to fire the chairman of the Securities and Exchange Commission, the McCain campaign pointed to former SEC Chairman Harvey Pitt who resigned in 2002 when it was made clear to him that he had lost the confidence of the Bush administration.
"Not only is there historical precedent for SEC Chairs to be removed, the President of the United States always reserves the right to request the resignation of an appointee and maintain the customary expectation that it will be delivered," said McCain spokesperson Tucker Bounds.
SEC Chair Chris Cox released a statement Thursday in which he disagreed with McCain that he should be fired and defended the regulatory agency he heads.
“While I have great respect for Senator McCain, we have sometimes disagreed, and this is one such occasion," Cox said in a statement. "The SEC has made plain that we have zero tolerance for naked short selling. In this market crisis, the men and women of the SEC have responded valiantly as they always do – with the utmost dedication and professionalism."
The White House said this week it wants to stay out of politics, but a Bush administration spokesperson said today of SEC Chairman Cox, who was nominated by President George W. Bush: "the chairman has the president's support."
Campaigning together in Iowa today McCain and Sarah Palin accused the Obama campaign of taking political advantage of the recent economic crisis.
"My opponent sees an economic crisis as a political opportunity instead of an opportunity to lead," McCain said.
Said Palin of Obama: “He likes to point the finger of blame, but does he ever lift a finger to help?”
McCain accused Obama of taking more campaign contributions from Fannie Mae and Freddie Mac executives than anyone aside from the chair of the Congressional committee that regulates the lenders.
“While Sen. Obama was lining his pockets with campaign contributors, he didn’t lift a finger” said McCain, who took credit for warning Congress of the impending crisis two years ago. McCain also noted that the former head of Obama’s vice presidential search committee Jim Johnson was formerly a Fannie Mae executive.
The Obama campaign says when Sean Hannity asked Palin last night whether there should be an investigation of campaign contributions by Fannie and Freddie executives, she deferred saying, “that’s significant, but even more significant is the role that lobbyists play in this.”
Obama campaign staffers note that several of McCain’s top advisors – including campaign manager Rick Davis, vice presidential vetter Arthur Culvahouse, and McCain consigliere Charlie Black – lobbied on behalf of the mortgage giants.
ABC News' Martha Raddatz, Lisa Chinn, Alyssa Litoff, Bret Hovell and Imtiyaz Delawala contributed to this report.
Any word on the Obama flub. He called AIG the American Insurance Group. Nah, didn’t think so. Fox News doesn’t mention the thugs getting in you face crap either.
The SEC has some role here, as it had oversight over Bear Stearns and Lehman, but to me the far bigger culprits are Fannie Mae and Freddie Mac, which have a different regulator, who, IMHO, is not nearly as responsible for this mess as Congress, the Democrats and Barney Frank.
Dang, I just knew there was a reason for that rant...
My guess is that the Obama camp sent them the (false) information and the FIVE MORONS did not even do a simple fact check before squatting out this pile of dung.
Bush couldn’t have fired the HUD director then.
The Chairman of the Fed is in office for so many years and if his time is up, the President can dump him and nominate someone else. He is not there forever. That is why it was so dumb when Greenspan’s time was up that Bush renewed him for another term.
“Cox should voluntarily step down just because all this crap happened on his watch. He failed.”
It wasn’t just Cox or short selling though. It’s the whole approach to mortage guarantee, lack of oversight from all regulatory bodies, including the Federal Reserve, and all the political corrution that resulted from it. The whole idea behind Fanny and Freddie was to protect banks, and they have never, even for one minute had the best interest of we the people at heart. We get laid off and have trouble making payments, who cares? As long as Mr. Banker gets his money back everything is just peachy while we’re loading up storage facilities looking for a place to live. I think it’s the assumption that we’re all just potential deadbeats that really gets me in a miff.
What has really set me off tonight is that Sec. Paulson wants to create a separate Federal agency to assume bad mortage debt. Again, protecting banks, and ‘officially’ socializing risk and poor judgement with other people’s money by financial institutions. It’s an automatic taxpayer bailout from now into the future that fixes absolutely nothing for average people while encouraging the same kind of risk and corruption that got us into this mess. It’s so ridiculous, and absurd. And we will still hear whining by bank CEOs who make $500M over 3 years that they lost 50 of it when their company’s stock tanked due to liquidity problems. Geez, cry me a river.
This stuff has to end and to do that the government needs to stop focusing on fat cat bank bailouts and start working for you and me. Scrap Fanny and Freddie and make a system that focuses on the individual, not bankers.
Just when I was starting to get on the McCain wagon ...., a dose of reality.
Win or lose, McCain is a jackass.
The commission consists of five members who are appointed by the President with the advice and consent of the Senate. The terms of the commissioners are staggered and the basic length of each term is five years. No more than three of the commissioners may be members of the same political party. The statute does not provide for a chairman. Until 1950, the Chairman was elected annually. Following Reorganization Plan No. 10 of 1950 (see, Reorganization Act of 1949, 5 U.S.C. Secs. 901-913), the President designates the chairman. Pursuant to this Reorganization Plan, the chairman succeeded to most of the executive and administrative functions of the commission. The Act does not expressly give to the President the power to remove a commissioner. However, for the purposes of this case, we accept appellants’ assertions in their brief, that it is commonly understood that the President may remove a commissioner only for “inefficiency, neglect of duty or malfeasance in office.” While the SEC must transmit evidence of criminal misconduct to the Attorney General, there can be no doubt the SEC is authorized to institute civil actions in the federal district courts to enforce various security laws.
22
Several conclusions can be drawn from this brief overview. First, as the President has the power to choose the chairman of the SEC from its commissioners to serve an indefinite term, it follows that the chairman serves at the pleasure of the President.
http://bulk.resource.org/courts.gov/c/F2/855/855.F2d.677.86-2319.html
The bottom line is the President can fire the Chairman of the FEC but he can also remove any of the members for cause. Probably wouldn’t be smart but it can happen.
Let’s say the president really, really hates the Fed chairman. Can he fire him?
The president does have the power to remove a member of the Board of Governors, but only for cause. Cause in this case would mean something like the chairman got the keys to the vault and was found stuffing his pockets with bullion.
“I don’t think Obama could actually put lipstick on a pig, either.”
Oh, I though he was the lipstick on the same old tax and spend, liberal approach to public policy, big government pig.
McCain is correct.
Cox has done a really terrible job at the SEC.
You’ve got it about right the way I see it... it is kind of moot as to whether Cox can be fired solely by the President. I’ll bet he doesn’t survive the year in any event given the search for witches and ogres that will be initiated by congress and every politician and investor in the US.
The obvious spirit of the remark was this: someone wasn't doing his job, and it would be best if the post were held by another person.
If he becomes president, I am sure he will, so what’s the problem?
Asked how McCain would fire Cox if the president does not have the formal power to fire the chairman of the Securities and Exchange Commission, the McCain campaign pointed to former SEC Chairman Harvey Pitt who resigned in 2002 when it was made clear to him that he had lost the confidence of the Bush administration. "Not only is there historical precedent for SEC Chairs to be removed, the President of the United States always reserves the right to request the resignation of an appointee and maintain the customary expectation that it will be delivered," said McCain spokesperson Tucker Bounds.
McCain was correct. Why did SEC allow all these unfathomable derivative instruments?
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