Republican Economy

WASHINGTON (CNN) -- Sen. Barack Obama on Monday used the news of more troubles on Wall Street to tie his Republican rival, Sen. John McCain, to the economic legacy of President Bush, while McCain called for an overhaul of the "patchwork quilt of regulatory oversight."

The investment bank Lehman Brothers, a pillar of Wall Street, has been hurt by losses in the real estate market.

Lehman Brothers, a 158-year-old investment bank that has been a pillar of Wall Street, announced Monday it was filing for bankruptcy, while Bank of America said it was buying another Wall Street institution, Merrill Lynch.
Lehman Brothers has been hurt by losses in the real estate market, and its stock value has declined 94 percent this year. Merrill Lynch also has been struck by real estate loses.
The problems with Lehman Brothers and Merrill Lynch come as financial markets were still recovering from the government takeover of mortgage giants Fannie Mae and Freddie Mac. Both institutions had experienced troubles as a result of the crisis in the mortgage industry caused by a record number of defaults and foreclosures. Watch why Lehman Brothers got into trouble »
The recent troubles "are more evidence that too many folks in Washington and on Wall Street weren't minding the store," Obama said in a statement Monday, adding that "eight years of polices... have brought us the most serious financial crisis since the Great Depression."
"I certainly don't fault Sen. McCain for these problems, but I do fault the economic philosophy he subscribes to," the Democratic presidential nominee said. "It's a philosophy that says even common-sense regulations are unnecessary and unwise, and one that says we should just stick our heads in the sand and ignore economic problems until they spiral into crisis."
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Obama called for modernizing regulations "to suit a 21st-century market" to protect investors and consumers.
For his part, McCain said in a statement he was happy that the federal government decided not to use taxpayer dollars to bail out Lehman Brothers and that he was carefully monitoring the markets -- including the situation with Lehman, which he called "the latest reminder of ineffective regulation and management."
"The McCain-Palin administration will replace the outdated and ineffective patchwork quilt of regulatory oversight in Washington and bring transparency and accountability to Wall Street."
The news of more troubles on Wall Street comes as voters place the economy as their No. 1 concern. More than half, 56 percent, of voters surveyed September 5-7 in a CNN/Opinion Research Corp. poll placed the economy as the most important issue. Watch why the economy worries voters »
The poll, which involved interviews with 1,022 adults, had a margin of error of plus or minus 4.5 percentage points.
If economic problems continue to dominate the headlines, they could help Obama in the tight race for the White House, the recent CNN/Opinion Research poll suggested.
According to the poll, Obama was viewed as being better at handling economic issues by 52 percent of the voters surveyed. In comparison, McCain was viewed as better on economic issues by 44 percent. The margin of error on that question was plus or minus 4.5 percentage points.
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