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Mr. Personalities

While John McCain wages war with himself, what's business supposed to do?

Washington, January 20, 2009- was sworn in as the 44th president at noon today, vowing to end "the era of rancor" and pledging to work with Democrats to vanquish what he called the triple peril of terrorism, climate change, and runaway entitlement spending. "These are the challenges that have the potential to end the dream we call America," McCain told an estimated crowd of more than 200,000 assembled in heavy snow at the steps of the U.S. Capitol.

With Chief Justice John Roberts administering the oath of office, McCain struck a bipartisan note, issuing an invitation to top Democratic leaders to visit the for an emergency meeting. Conservatives, who have been wary of McCain for years, have grown increasingly so since his election and the appointment of several prominent Democrats to his cabinet. Many were despairing after yesterday's address?. (View a slideshow of who's shaping McCain's thinking.)

Well, we can dream, can't we?

If there's going to be a President McCain, I hope it's the one portrayed above: the reflexively bipartisan one who sponsored bills with Democrats John Edwards (patients' bill of rights), Russ Feingold (campaign-finance reform), and Ted Kennedy (immigration); one of just two Senate Republicans who opposed the Bush tax cuts in 2001 and one of three in 2003; the centrist who valiantly tried to steer a Big Tobacco settlement through in 1998, ending years of litigation in exchange for stringent regulation. The McCain I want is the one who recognizes climate change as a real threat and who understands that entitlements can undo the economy. That's the one a lot of executives want too.

Unfortunately, we could get the McCain of this year's presidential campaign, the one who now says that he wants to make permanent the Bush tax cuts he once opposed and that he would vote against his own immigration-reform bill if it came before him. The of hope? When it comes to McCain, it's all about hoping the right McCain shows up.

That's because, at 71, McCain is still among the most protean political figures in American life. This is particularly true with regard to economics, which is distressing at a time when Wall Street institutions are imploding and no one really knows when this credit mess will end. After more than two decades in Congress, the senior senator from Arizona told the Boston Globe last year, "The issue of economics is not something I've understood as well as I should."

McCain aides insist that he meant it in a self-deprecating way and that he knows plenty. But when he was asked during a debate in January whom he'd listen to on the economy, he pointed to the budget-cutting scolds of the Concord Coalition as well as who-cares-about-the-deficit tax slashers like Jack Kemp. Which is it? His website made no mention of backing Bush's plan for private Social Security savings accounts. Then in March, he said he was for them, surprising even the Wall Street Journal. In that same month, he also said a dismal jobs report was "not terrible." Huh?

So what's an undecided moderate to do with McCain, especially in these uncertain economic times? I went to see Douglas Holtz-Eakin, the campaign's senior economic adviser, to try to get a better sense of where McCain stands now. Holtz-Eakin, the former head of the Congressional Budget Office, is respected for his hard-line approach to spending. We sat in an empty office at McCain's campaign headquarters, just as the senator was at the White House being endorsed by President Bush. I asked, of course, about those tax cuts. When McCain voted against them, he said that they helped only the wealthy. But, Holtz-Eakin assured me, the real reason McCain opposed them was that they weren't accompanied by spending cuts. Fair enough. But it is slightly illogical, to say the least. Why would he want to extend those tax cuts in perpetuity if the spending cuts have yet to be delivered?

The real challenge for a voter trying to understand McCain is figuring out which positions he'd keep and which he'd jettison. That's no easy task when someone does a pirouette on something as basic as tax rates. Still, there are things about McCain that are commendable and give a political moderate good reason to vote for him in the fall. First, the crusade against pork-barrel spending has driven him over the years. He has famously taken on earmarks, to the detriment of relationships with his colleagues. I think he'd like to be a president who's remembered for reining in deficits and government spending, and I have a hunch that he'd likely do more about the deficit than Hillary Clinton or would. On -a phenomenon he believes is real, which makes him a noble standout in the Republican Party-he'll be led by a Democratic Congress rather than steering government policy. But that's better than doing nothing.

Here's what worries me: Over the next few months, McCain is supposed to lay out more-detailed plans on where he wants to take the tax code. He's not going to jump off the deep end and embrace a Steve Forbes-style flat tax, but he is going to want something that's less progressive than what we have now, with fewer deductions. In principle, eliminating some deductions would be good, but the details are critical. A more serious concern: The nature of this weird recession we're in doesn't bode well for McCain. With a credit crisis that's turning into the carnival game Whac-a-Mole-one minute it's here; you hammer it down, and then it's over there-a candidate who describes himself as less than adept at economics is probably not the best one to handle the post-Bear Stearns age. We need the government to be nimble. When it comes to regulation, for instance, we surely need a supple approach-lifting it where needed but strengthening it in areas like mortgage lending (where a lack of oversight is how we got into this mess) and product safety (where the current system allowed lead-laden toys into the country). After you throw in inflation, wage stagnation, and a slew of currency issues, is McCain the guy you want?

When I went to the Conservative Political Action Conference meeting in Washington in February, there was a lot of worry among attendees about whether McCain was conservative enough-which I found comforting-but there were also many conservatives who were coming to terms with him as their party's nominee. I was talking to fiery conservative Tom DeLay, the former House majority leader, and we ran into Grover Norquist, the famed antitax activist, long a McCain foe over taxes and campaign-finance reform. His is about as good an insight as you could gain into the minds of the anti-McCain right. Norquist reassured DeLay that McCain was moving in the right direction by reaching out to conservatives and that his positions on taxes and even climate change were now something he could live with. Norquist also told DeLay that although McCain had sponsored carbon-cap-and-trade bills in the past, he wasn't sponsoring the one that's currently moving through Congress, ostensibly because it doesn't have enough support for nuclear power. If Grover Norquist sees hope in McCain, that's a bad sign for moderates.

Ultimately, it comes down to faith-based politics. Either you believe that McCain is a man of moderate instincts or you don't. No one doubts John McCain's heroism or fundamental decency, but his core beliefs remain at issue. At this point, it's not hard to imagine him speaking these words at his inauguration: "And so I pledge to you, my fellow Americans, that I will deliver the lower taxes we demand. And let us stay in Iraq until the job is done..."

In other words, all the hallmarks of a third Bush term. Let's hope not.

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