As for another troubling aspect of the economy — the credit crunch — McCain supports the approach the Federal Reserve and its chairman, Ben Bernanke, have taken thus far, says Griffin. Steps like extending banks’ access to the discount window through January are “the best things we can do to restore liquidity,” he says.
In early 2006, Obama introduced the “Stop Fraud Act,” noting the deterioration of lending standards that ultimately contributed to the subprime-mortgage crisis, the housing downturn, and the wider credit crunch, says Goolsbee. The bill never became law. But the Illinois senator was also an early supporter of a successful plan, proposed by Rep. Barney Frank (D–Mass.) and Sen. Chris Dodd (D–Conn.), to facilitate the rewriting of mortgages to enable more borrowers to make their payments. “Senator Obama has been way, way ahead of the curve in thinking about credit and financial markets,” says Goolsbee.
Sixty-seven percent of CFOs say the credit markets are of high importance to their businesses. But they generally acknowledge that the President doesn’t hold much sway over credit. Still, “the next President can play some role in stabilizing the economy,” says Stewart Smith, finance chief at The Ohio Police and Fire Pension Fund. “Budget and economic policies are clearly important, but so are tax policies.” Smith says a lack of confidence among consumers, investors, and lenders has spurred the credit crisis and could be remedied in part by boosting individual savings rates. He suggests decreasing or eliminating taxes on savings to encourage people to put more money away.
While typically opposed to government intervention in financial markets, CFOs strongly support the federal takeover of mortgage giants Fannie Mae and Freddie Mac, according to a separate survey conducted in late August by CFO and Duke University. Seventy percent said they approved of the dramatic move.
Needed: An Energy Plan
Campaign debate over the country’s energy problems has lately devolved into a heated argument over offshore oil drilling, and with the selection of Alaska governor Sarah Palin as the Republican Vice Presidential candidate, drilling in the Arctic National Wildlife Refuge has surfaced again as a major point of contention. CFOs think the two sides should step back and come up with a coherent energy policy first.
“We presumably created an Energy Department in the U.S. because we felt that it was really important. It’s a cabinet-level position. But frankly, we don’t really have a comprehensive strategy,” says Joe McCarthy, finance chief at Sunrise Growers FrozSun Foods, a California-based seller of frozen fruit.
Many CFOs advocate a kitchen-sink approach. “We need to attack the problem on multiple fronts and signal to the world our seriousness about dealing with our own energy dependence,” says Smith. Wind, solar, biofuels, offshore drilling, nuclear power, incentives for further alternative-energy development, and conservation efforts should all be on the table, say many finance executives. “The key is a slow and steady approach toward these initiatives and our government being serious about our efforts,” says Smith. “Lip service and gas-tax holidays will not cut it.”