McCain Seeks to Rein in Fed Response to Wall Street Mess

John McCain suggested that the Federal Reserve Bank and the Treasury Department may be going to far in its response to the Wall Street mess.

During remarks on the economy Friday, McCain called for a more consistent policy in responding to the crisis, during which investment banks, mortgage companies and an international insurance firm have been rescued from failure by the federal government.

“[I]n cases where failing companies seek taxpayer bailouts, the Treasury Department will follow consistent policies in deciding whether to guarantee loans,” McCain said while laying out the approach of his potential administration. “It must have well developed remedies for a financial crisis. With billions of dollars in public money at stake, it will not do to keep making it up as we go along.”

He added: “Finally, the Federal Reserve should get back to its core business of responsibly managing our money supply and inflation. It needs to get out of the business of bailouts. The Fed needs to return to protecting the purchasing power of the dollar. A strong dollar will reduce energy and food prices. It will stimulate sustainable economic growth and get this economy moving again.”

McCain’s remarks come after lawmakers have begun to question whether a small group of appointed government officials, namely Treasury Secretary Henry Paulson, Fed Chairman Ben Bernanke and Timothy Geithner, and New York Federal Reserve President Timothy Geithner, should be steering the government’s response to the financial crisis.