Warner banks on US innovation

By Bob Stuart

Published: October 16, 2008

Virginia U.S. Senate candidate Mark Warner thinks American innovation and stricter accountability from the financial industry can go a long way toward bringing the United States back from the current economic crisis.

Warner, a Democrat and former Virginia governor, is opposing former governor and Republican Jim Gilmore in November for the right to succeed retiring U.S. Sen. John Warner.

Describing himself as a proud capitalist, Mark Warner said the United States can “outhustle” any country in innovation, but must follow rules.

He said the rules of the road do not include a prolonged involvement of the federal government in the U.S. economy and banking system, despite the recent government bailout and infusion of capital into banks.

“We shouldn’t shift to a national ecnomy. We must have folks who understand finance, but we must get out as soon as we make the taxpayer whole,’’ he said.

The candidate describes the next 25 years as the era of energy in the United States, and said a portfolio of alternative energy sources must be developed including wind, solar, biofuels, nuclear, coal and drilling offshore for oil.

Warner’s strategy does not include drilling in the Alaskan National Wildlife Refuge, part of the platform of Gilmore.

“I want America to be the leader,’’ Warner said. He fears if the United States does not act now, it will miss out on leading the way in energy innovation.

He said if innovation occurs, it could also jump start the lagging U.S. auto industry.

Warner proposes that all U.S. federal, state and local governments commit to a three-year purchase orders for fuel-efficient, hybrid or electrical U.S.-produced vehicles.

Warner said the recent actions by the Bush Administration and Congress for both the $700 billion bailout of the financial industry and $250 billion to U.S. banks to free up markets for banks were necessary, but not communicated right.

The impact on the consumer was not explained.

“The Bush administration did a dreadful job of explaining this,’’ he said. “It’s about reopening credit markets so there won’t be such a drastic effect on Main Street.”

Warner also resented the attachment of pork barrel spending to the bailout legislation.

“It was disgraceful with Congress adding on pork. At best, it was a mediocre plan made worse at the end of the day. But they had to act,’’ he said.

In the future, Warner said a strategy is needed in Congress to prevent the same financial debacle from happening again.

He said independent oversight from a financial expert like billionaire investor Warrant Buffett would help, as well as the refining a modern regulatory system.

While Congress and federal regulators failed to stem the crisis, Warner also puts some blame on financial rating agencies.

“How did these financial agencies package loans and sell and return with triple A ratings? The regulators and the rating agencies did not do the job,’’ he said.

The mortgage system must also reconnect lenders and loan recipients over the long-term rather than allowing the complicated loan resales and mortgage derivatives that helped spawn the recent crisis.

“Fixed rate mortgages worked well,’’ said Warner, who said rules must be followed but said the free enterprise system can prosper in America again.

U.S. competitiveness must also take center stage.

Warner said the American education system must be improved as well as providing more research and development on college campuses.

Healthcare costs must be contained or the American entrepreneur will be stymied by the costs for his employees, and Warner said a plan to rebuild the country’s infrastructure is also needed.

While Warner also thinks federal spending must be cut, he would take a scalpel not a saw.

Entitlement programs for Medicaid could be trimmed. Defense spending could be monitored and perhaps cut in certain areas. Warner said the federal government’s information technology programs could be consolidated.

Warner is against transportation earmarks, but does not outright reject the notion of earmarks as long as there is transparency.

“If I was a U.S. senator and wanted to add a new military base, more research and development at Virginia Tech I ought to be able to do that,’’ he said. “I would put my name on it and be totally transparent. I oppose doing earmarks without full transparency.”

Warner’s history includes success a cellphone pioneer who made hundreds of millions before becoming Virginia’s governor in 2002.

If elected to the U.S. Senate, he must learn how to compromise with senators from both major political parties. He thinks he is up to the task.

He has faith that the U.S. Senate can still be a place where people can work together.

“I will build those relationships,’’ said Warner, who served as chairman of the National Governors Association. “If you say the institution is has changed, the country is up the creek. I’m not willing to give up.”

Warner thinks the Senate can go back to finding common ground and believes America’s free enterprise system can also bounce back.

“We’ve got to get the country back on path,’’ he said.