April 18, 2010

Chris Wallace apparently thinks the man who was part of the Keating Five, and who as Jason Linkins pointed out "thinks Fannie and Freddie were a major catalyst in the financial collapse", should be allowed to weigh in on what we need to do to reform our financial systems. John McCain has absolutely no credibility on this issue, but then, you could say the same when it comes to a lot of other issues as well. PolitiFact debunked McCain's claims about Fannie and Freddie back in 2008. You can read their lengthy analysis here which I'm not going to rehash but earned him a rating of "barely true": McCain's 'warning' on Fannie & Freddie.

McCain: There’s a number of aspects of this proposal that are disturbing to me and by the way I believe the White House is right, do we need to spend more billions of dollars to bail out institutions? I thought the object was to make institutions too big to fail…ah, do away with them being too big to fail, so therefore the taxpayer’s dollars wouldn’t have to be used. So I agree with the White House. Hurray. But on this business of leaving…

Wallace: So what’s the hold up?

McCain: Leaving Fannie Mae and Freddie Mac out of it. Fannie and Freddie were the, two of the major catalysts in this whole meltdown, this indiscriminate lending of money to buy homes from people that could never pay it back, the pressures of the Community Reinvestment Act to lend these loans to people who were never going to be able make their mortgage payments. So Fannie and Freddie being left completely out of it and the fact is we have to look at a number of other aspects of this which increase the roll of unelected, unaccountable officials and I think a greater role of the Congress of the United States.

Our own Nicole rebutted the right wing's attacks on the Comminity Reinvestment Act back when Lou Dobbs was going after them on his show. Lou Dobbs Blames Financial Crisis On Left Wing Groups Like ACORN and the CRA.

Here's another problem with McCain's attack on Fannie and Freddie. As Mother Jones pointed out, his former campaign staffers were high paid lobbyists for those very institutions.

McCain's Fannie and Freddie Connections:

John McCain railed against Fannie Mae and Freddie Mac on the campaign trail today, saying that the CEOs that led the lenders to ruin "deserve nothing" and should have to pay back their severance packages. In an Wall Street Journal op-ed co-bylined by his vice presidential pick, Sarah Palin, McCain suggested bold reforms for Fannie and Freddie that would "terminate future lobbying, which was one of the primary contributors to this great debacle."

If that's the case, McCain should look first to his campaign staffers as the cause of that debacle. One of them was Fannie Mae's head of lobbying, and spread tens of millions of dollars around Washington in the form of lobbying contracts. A number of McCain staffers were on the receiving end of those contracts, collecting hundreds of thousands of dollars each from the lenders to rep their interests. And McCain's campaign manager served as president of a lobbying association that fought to protect Freddie Mac and Fannie Mae from the sort of regulation that McCain is now proposing. Read on...

And as Jason Linkins pointed out "Interestingly, here he calls for a lot of government involvement and a lot of Federal oversight and basically seems to edge right up to reinstating Glass-Steagall?"

Wallace: So you’re upset about the fact that the Fed would have a bigger role in overseeing all of this?

McCain: It concerns me because the Fed didn’t play a very good role the last time around and I think there needs to be a lot more government involvement, Congressional involvement and oversight. And when we find out that Goldman Sachs was betting against its own investors and you know, playing the double game we’re going to find out they weren’t the only ones. Look, things have got to change in the way that they do business and one of them I think is, really is to let bankers do the traditional banking and lending money and having them be backed by the Federal government and the FDIC. People want to engage in all this other stuff we’ve been reading about, just don’t have the taxpayers involved. Let them take their own risks.

Once again as the Washington Post pointed out back in 2008 McCain Embraces Regulation After Many Years of Opposition:

A decade ago, Sen. John McCain embraced legislation to broadly deregulate the banking and insurance industries, helping to sweep aside a thicket of rules established over decades in favor of a less restricted financial marketplace that proponents said would result in greater economic growth.

Now, as the Bush administration scrambles to prevent the collapse of the American International Group (AIG), the nation's largest insurance company, and stabilize a tumultuous Wall Street, the Republican presidential nominee is scrambling to recast himself as a champion of regulation to end "reckless conduct, corruption and unbridled greed" on Wall Street. Read on...

Finally, when asked if the Republicans should worry about looking like they're siding with Wall Street, McCain reverts to their Frank Luntz talking points on "too big to fail".

Wallace: But you brought up Goldman Sachs and the allegations are they were putting out investments that they knew were going to fail and in a sense they were profiting from their failure but selling them to some of their customers. If they bring, if the Democrats bring this bill to the floor, now especially that is has the $50 billion fund out of it, it will be in a position of them saying they’re pushing for regulation on Wall Street and Republicans are filibustering it. Don’t they look like they are trying to crack down on the fat cats and you guys are protecting them?

McCain: Well I think that’s obviously their goal, the President and the administration. People have articulated that. I think we have to make an argument that we can’t see a regulatory scheme which would then allow a repetition of this melt down that we’ve seen… that we saw a year and a half ago. So our effort has got to be to say look, we’ll sit down but we want to see a scheme that insures the fundamental principle that never again is any institution too big to fail and this… I don’t think that this present legislation before us can guarantee that.

But of course Chris Wallace is never going to point out why McCain is a big huge flaming hypocrite when it comes to financial reform and why no one should take anything he has to say on the matter seriously.

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