Back in 1999, John McCain acknowledged his role in the 1980's Keating Five savings and loan scandal that rightly stained his career. "The fact is," he said, "it was the wrong thing to do, and it will be on my tombstone and deservedly so." But again facing withering criticism as a second financial crisis grips the United States, his campaign today instead claimed McCain's intervention 20 years ago with federal regulators on behalf of future convicted felon Charles Keating was merely "a political smear job."

As AmericaBlog and Politico reported, the campaign deployed McCain's lawyer John Dowd to rewrite history on his client's behalf during a conference call Monday:

McCain lawyer John Dowd described McCain's "former relationship with Charles Keating as 'social friends,'" and called the situation a "classic political smear job on John."

Sadly for McCain, Dowd's yarn matches neither the facts nor McCain's self-proclaimed resurrection as a reformer in the wake of his near-death experience in the Keating Five imbroglio.

Earlier this year, the Boston Globe summarized McCain's close relationship with Keating and his decision to intervene with federal regulators on his behalf:

McCain met Keating in 1982, during McCain's successful run for Congress, and soon began accepting offers from Keating to fly McCain's family on a corporate plane to Keating's house in the Bahamas. McCain did not pay for most of the trips until years later, when the matter became public.

Keating, meanwhile, complained regularly to McCain that a proposed regulation would hurt his business. Known as the "direct investment" rule, it limited the amount that savings-and-loan institutions could invest from their assets. In 1985, after having "heard frequently from Charlie on the matter," McCain decided that Keating's complaints "were sound enough to warrant our assistance." He cosponsored a resolution sought by Keating, but it failed to postpone the regulation, McCain wrote in his autobiography.

By then, Keating was one of McCain's most important benefactors; McCain received $112,000 in campaign donations from Keating and his Lincoln associates, mostly between 1982 and 1986.

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I'll admit that although I'm a poltical news junkie, I never really understood the Keating Five scandal as well as I should have.  Jed's newest video fixed all that, summing up in less than two minutes the scandal and John McCain's central role in it. The Obama campaign needs to start hitting McCain on this.

  The implosion of Wall Street last week resulted in a near-death crisis for John McCain's presidential campaign. His post-Palin bump eviscerated, McCain was staggered by the re-emergence of the economy as the dominant issue in the 2008 election. His daily-changing positions revealed that McCain, a man who has repeatedly admitted his ignorance of economics, is struggling to cope with his diminished presidential prospects. Armchair psychologists might call the process John McCain's five stages of grief over the economy.

Denial. McCain's refusal to confront the realities of the failing Bush economy has long roots and was again on display last Monday. McCain, who has frequently described the economic slowdown as "psychological," for at least the 18th time proclaimed the "fundamentals of our economy are strong." As the Dow plummeted over 500 points, McCain reacted to the white-hot crisis on Wall Street by comically announcing his support for a 9/11-style commission to study the causes of and make recommendations to address the meltdown. Willing to kick the can down the road with his since forgotten 9/11 panel idea, McCain also took a head-in-the-sand position in opposing the government rescue of teetering insurance giant AIG:

"We cannot have the taxpayers bail out AIG or anybody else."

Anger. Sadly, McCain's denial of the obvious produced an immediate backlash from the press and the public alike. Literally within hours last Monday, McCain reversed course on the underlying strength of the American economy and declared the fundamentals of the economy to be "at great risk."

Then John McCain did what he does best - he got mad.

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