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McCain proposes economic fixes during Midwest stops

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McCain proposes economic fixes during Midwest stops
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BLAINE -- John McCain's visit Friday to Minnesota was one part traditional campaign rally and one part economy rescue proposal, with a strong emphasis on the latter.


In a short and somber speech to thousands in a northern Twin Cities suburban airplane hangar, McCain laid out a plan he said would help repair economic problems that have dominated the news -- and the presidential campaign -- this week.

For one thing, the Republican presidential candidate wants to establish a federal agency to deal with the mortgage crisis and other financial institutions' problems. He also seeks to open the dealings of financial institutions to greater public scrutiny.

He announced his plan in speeches in Blaine, a suburb full of independent-minded voters, and Green Bay, Wis.

The rally, which campaign organizers said attracted 13,000 people, was more subdued than most rallies because the Arizona senator's 16-minute speech mostly was about the country's economic woes.

Accompanying McCain, and drawing a large crowd response, was his running mate, Alaska Gov. Sarah Palin.

Friday's rally came near the end of a week in which both McCain and Democratic presidential candidate Barack Obama emphasized the economy.

McCain called for formation of what he called the Mortgage and Financial Institutions Trust, an agency to be "an early intervention mechanism that will help financial institutions avoid bankruptcy and expensive bailouts." It would protect both the institutions and their customers, McCain said, by taking over troubled loans.

McCain said he warned two years ago that trouble was afoot.

"The financial crisis we're living through today started with the corruption and manipulation of our home mortgage system," McCain said. "At the center of the problem were the lobbyists, politicians and bureaucrats who succeeded in persuading Congress and the administration to ignore the festering problems at Fannie Mae and Freddie Mac," two major mortgage holders.

"Congress did nothing," McCain added. "The administration did nothing. Sen. Obama did nothing."

McCain, a 26-year Senate veteran, said Obama has not worked to change the system like he has.

"People like Sen. Obama have been too busy gaming the system and haven't ever done a thing to actually challenge the system," McCain said.

Obama on Friday met with economic advisers to draw up a plan dealing with events of recent days, but said he would not lay out his own plan until he had a chance to look over one being prepared by the Bush administration.

"It is critical at this point that the markets and the public have confidence that their work will be unimpeded by partisan wrangling, and that leaders in both parties work in concert to solve the problem at hand," Obama said.

"What we're looking at right now is to provide the Treasury (Department) and the Federal Reserve with as broad authority as necessary to stabilize markets and maintain credit," Obama added.

While he mostly avoided partisan criticism, Obama did blame Republican-led deregulation of the financial industry for today's economic woes.

One McCain proposal would open some financial firms' books. "Americans have a right to know when their jobs, pensions, IRAs, investments, and our whole economy are being put at risk by the recklessness of Wall Street. And under my reforms for the financial sector, that fundamental right will be protected."

To protect customers, McCain would push for penalties for those who defraud Americans.

Palin began her Blaine speech talking a bit about hockey, then in an obvious effort to show her foreign policy credentials, turned to Iran.

"Iran should not be allowed to acquire nuclear weapons, period," she said to a loud cheer.

She talked about energy, pausing for thousands in the crowd to cheer: "Drill, baby, drill." Like other Republicans, she continued the call to increase off-shore oil drilling.

"As governor of Alaska, I have overseen a very large percentage of the U.S. production of production of gas and oil," she said.

"I know what works in this," she added, urging that there be more American energy sources used.

She said she and McCain would expand use of alternative fuels, but did not mention ethanol or other Minnesota-based energy sources.

Neither candidate made many Minnesota references.