McCain's Scapegoat

John McCain has made it clear this week he doesn't understand what's
happening on Wall Street any better than Barack Obama does. But on
Thursday, he took his populist riffing up a notch and found his
scapegoat for financial panic -- Christopher Cox, the chairman of the
Securities and Exchange Commission.

To give readers a flavor of Mr. McCain untethered, we'll quote at
length: "Mismanagement and greed became the operating standard while
regulators were asleep at the switch. The primary regulator of Wall
Street, the Securities and Exchange Commission (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 that
you can sell stock without ever owning it. They eliminated last year 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
has betrayed the public's trust. If I were President today, I would fire
him."

Wow. "Betrayed the public's trust." Was Mr. Cox dishonest? No. He merely
changed some minor rules, and didn't change others, on short-selling.
String him up! Mr. McCain clearly wants to distance himself from the
Bush Administration. But this assault on Mr. Cox is both false and
deeply unfair. It's also un-Presidential.

Take "naked" shorting, in which an investor sells a stock short --
betting that it will fall in price -- without first borrowing the shares
he is selling from an investor who owns them. The SEC has never condoned
the practice, and since 2005 it has clamped down on short selling in any
stock that shows evidence of naked shorting. The SEC further tightened
its rules against naked shorting just hours before Mr. McCain excoriated
Mr. Cox for doing nothing.

In a crisis, voters want steady, calm leadership, not easy, misleading
answers that will do nothing to help. Mr. McCain is sounding like a
candidate searching for a political foil rather than a genuine solution.
He'll never beat Mr. Obama by running as an angry populist like Al Gore,
circa 2000.