Beyond the Dome

Over the last few days, John McCain has been doing his best to channel one of his heroes, Theodore Roosevelt, by promising better regulation of the markets in response to the financial meltdown. How do congressional Republicans feel about the return of Teddy Roosevelt? They’re doing their best to play along — mostly because they have no choice.

The notion of tackling what TR called the “malefactors of great wealth” won the Arizona senator tepid support, at best, when he railed against the “special interests” in Washington during his nomination speech two weeks ago in St. Paul. Citing his battles with such interests as a key entry on his resume, McCain won just a polite smattering of applause.

Now, though, Republicans on Capitol Hill are tiptoeing toward McCain’s view that the financial markets might actually need more regulation. Just, you know, not too much.

“There should be a red flashing light — ‘Do no harm,’ ” Sen. Pat Roberts of Kansas told me this afternoon. “But at the same time, you’ve got to exercise your oversight responsibilities.”

Sen. John Thune of South Dakota said it was “fair to say that under Freddie [Mac] and Fannie [Mae], the regulation was weak. And we allowed them to continue, for some period of time, with that weak regulation.”

“I think where John is rhetorically right now is the right place to be,” Thune said. “What everyone’s seeing right now is greed run amok, and they see that with a little more oversight and transparency and accountability, some of these things could have been avoided.”

Even McCain is struggling with how to promise a crackdown without worrying business conservatives who fear an overreaction. Here’s how he put it in an interview on CNBC yesterday:

“I think one of the biggest problems, of course, is the excess and greed and corruption. I know that you know that there’s always been — go back to Adam Smith — that there’s been a social contract between capitalism and the citizen, and that’s been broken in Wall Street. When you see these people who were the top executives, after really having failing enterprises and not succeeding leaving with these huge packages, that makes the American people cynical. And, frankly, it threatens the free enterprise system and then lends itself sometimes to overregulation.

“We need to catch up with oversight and regulation and transparency, but, obviously, we don’t want to burden average citizens with overregulation and government bureaucracy. And I’m proud to be a Teddy Roosevelt Republican, who said unfettered capitalism leads to corruption. And we’ve got to fix this.”

McCain has always had a fondness for Roosevelt, but he also claims to draw inspiration from Ronald Reagan — a counterintuitive pairing of heroes that underlines his own conflicted views about how to respond to the current crisis. And, of course, he has spoken at great lengths on other occasions about the need for less regulation — particularly when he voted against the 1996 telecommunications overhaul, citing the ways the “special interests” were preventing Congress from deregulating the industry enough.

But for now, at least, his Republican colleagues seem to be sharing the conflict, which will probably help keep McCain on safe ground. As Thune put it, “There’s a difference between the heavy hand of regulation that strangles competition and the light touch that ensures it.” For now, he said, “I think we could use a little more of the light touch.”