Chuck Schwab on Scary Markets and Election '08

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We have nearly $2 trillion in hedge funds that simply don't have any reporting responsibilities.

Do you have any sense of when we might see the economy turn up?
I think we have to wait until the outcome of the [Presidential] election. Whether it's McCain or it's Obama, we need to have some certainty around the direction we're going in.

It's interesting that the Democratic side is talking about tax increases while we are seeing such a slowdown.
The prospect of tax increases is certainly scary, although we've lived through tax increases in the past, and the economy and the world moves forward. Frankly, I think whoever is elected…those who pay taxes will probably have to pay a little bit more.

Even if John McCain is in the White House?
I think so. John seems to be very much of a maverick. He's not frozen in one camp or another camp. I think he will be flexible and hopefully make the best judgments to maximize capital formation, job formation, and the economy's potential.

How comfortable are you with both presumptive nominees' grasp of the economy?
I'm confident that whether it's foreign affairs or economic policy, they will surround themselves with experts. But there are policy differences. And I just tend to want to have not as dramatic a change going forward, and that's why I lean much more toward McCain. I sort of know what we're going to get in terms of self-defense and general economic policy. I worry about radical changes.

Are you supporting McCain?
Yes.

The Democrats left President Bush a balanced budget and a surplus. If Obama becomes President, he will face massive deficits and a slow economy. How would you convince an undecided voter that Republicans are better stewards of the economy?
Certainly I'm quite conservative in my fiscal thinking and pretty liberal about other policy issues. I think President Bush and Congress were left some really very difficult choices following 9/11. Then the Iraq war occurred and had to be paid for. So a lot of things came into play that led to a deficit. In a perfect world, I would have a balanced budget, low interest rates, and peace in every corner of the country and the world. But, unfortunately, a perfect world generally isn't available.

Maria Bartiromo is the anchor of CNBC's Closing Bell .