OPINION: McCain Bungling Economic Debate

McCain does have ties to the problems in the financial markets. His campaign's economic policy relies heavily on the advice of former Sen. Phil Gramm. Gramm, as chairman of the Senate Banking Committee in the late 1990s, was instrumental in deregulating the financial services industry. The Gramm-Leach-Bliley Act overturned many of the protections instituted after the Great Depression.

Gramm also wrote the Commodity Futures Modernization Act of 2000. The act relieved many financial firms from federal government oversight of futures trading, allowing for the explosion of the credit default swap market. (See Dan Freed's piece on the complexity of unwinding Lehman Brothers' (LEH) risk from its involvement in credit default swaps.) Clearly, Warren Buffett was correct when he deemed credit default swaps "financial weapons of mass destruction."

Gramm parted with the McCain campaign after making unhelpful comments -- such as "We have sort of become a nation of whiners" -- and calling economic conditions a "mental recession."

On Tuesday, another McCain adviser hurt the campaign. Carly Fiorina, former CEO of Hewlett-Packard (HPQ), said on CNBC: 'Well, I don't think John McCain could run a major corporation."

Although the federal government isn't a corporation, it does dwarf any corporation in size and scope. The current federal budget stands at about $3 trillion. If McCain can't run a corporation, certainly the federal government is out of the question.

The McCain campaign has got to do better when talking about the economy. If not, he will be seen as "out of touch" and be out of luck come November.

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