Economy takes over presidential campaign

GOLDEN, Colo. -- Economic fears are suddenly dominating the presidential campaign, shoving aside every other issue. Republican John McCain called for a crisis commission Tuesday, while Democrat Barack Obama laughed that off as "the oldest Washington stunt in the book."

"This isn't 9/11," Obama told a noisy crowd of more than 2,000 at the Colorado School of Mines, dismissing the idea of a need for study. "We know how we got into this mess. What we need now is leadership that gets us out. I'll provide it. John McCain won't."

McCain, campaigning in Florida, promised reforms, too, to expose and end the "reckless conduct, corruption and unbridled greed" that he said had caused the financial crisis on Wall Street.

The turmoil has shaken Americans' confidence, erased hundreds of billions of paper wealth for U.S. stockholders and led McCain and Obama to forsake other controversies and go back to the economy as the primary concern of voters.

On Tuesday, Obama called the crisis "the most serious financial situation in generations."

"Since this turmoil began over a year ago," the Illinois senator said, "the housing market has all but collapsed. Fannie Mae and Freddie Mac had to be effectively taken over by the government. Three of America's five largest investment banks failed or have been sold off in distress. Yesterday, Wall Street suffered its worst losses since just after 9/11."

Obama said he has supported legislation to stop mortgage transactions that promote fraud, risk or abuse and has urged the administration to bring all parties together to find a solution to the subprime mortgage meltdown.

McCain has conceded that he has less familiarity with economic issues than with national security. He struggled to find the proper tone Monday, first declaring that "the fundamentals of our economy are strong." Less than three hours later, after Obama accused him of being out of touch, McCain conceded the country is in an economic crisis but still said the fundamental strength of the American worker remains strong.

On Tuesday, McCain called for a commission to probe the root causes of the country's financial mess. And he reiterated that no more taxpayer money should be used to rescue private institutions such as the mega-insurer AIG.

Hours later, he used a rally before several thousand in Tampa to promise that "if Gov. Palin and I are elected in 49 days we're not going to waste a moment in changing the way Washington does business."

"Too many people on Wall Street have been recklessly wagering instead of making the sound investments we expect of them," McCain said.

He said investment schemes too complex to understand or regulate have risked the earnings of traditional economic productivity.

"So much of the loss and damage to our economy could have been avoided if these practices had been exposed to the light of day, said McCain. "People have the right to know when their jobs, pensions and our whole economy are being put at risk by recklessness on Wall Street."

The Arizona senator, who has a background as a free marketeer and is advised by former senator Phil Gramm and other proponents of a light regulatory touch, said the country needs effective regulation of every investment, from savings accounts to risky Wall Street products.

"We don't need a dozen federal agencies doing the job badly; we need the best federal agencies to do the job right," he said.

Obama recounted proposals he has offered in recent months for a new regulatory framework "to restore accountability, transparency and trust in our financial markets." He quoted McCain as saying recently, "I'm always for less regulation."

Obama also said the nation does not need another commission, like the one proposed by McCain.

"History shows us that there's no substitute for presidential leadership in times of economic crisis," he said. "FDR and Harry Truman didn't put their heads in the sand and hand accountability over to a commission. Bill Clinton didn't put off hard choices. They led and that's what I will do."

Obama tried to use McCain's earlier observation that "the fundamentals of the economy are strong" against him in an ad, casting the Republican as unable to understand the current financial crisis.

McCain replied with a tough tone, declaring in his own ad: "The economy is in crisis. Enough is enough."

The message seemed to hold a double meaning -- enough with the bad economy and enough with Obama casting him as out of touch. McCain told voters in the ad: "I won't tolerate a system that puts you and your family at risk. Your savings, your jobs -- I'll keep them safe."

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Terence Hunt reported with the Obama campaign in Colorado, Johnson reported with the McCain campaign in Florida.