Diary

Who dealt this (financial) mess, anyway?

http://h1.ripway.com/quietmc/mccain.htm

The links below will work if you get to the website listed above.

Who dealt this mess anyway? (An old card players’ expression.)

From the Washington Post:

Mr. McCain was an early voice calling for the resignation of Securities and Exchange Commission Chairman Harvey Pitt, charging that he “seems to prefer industry self-policing to necessary lawmaking. Government’s demands for corporate accountability are only credible if government executives are held accountable as well.”

In 2006, he pushed for stronger regulation of Fannie Mae and Freddie Mac — while Mr. Obama was notably silent. “If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole,” Mr. McCain warned at the time.

Link to Washington Post 9/19/08; page A18:

‘Always for Less Regulation’? – washingtonpost.com

Text of McCain’s 5/25/2006 speech to the Senate, referenced in the Washington Post article:

GovTrack: Senate Record: FEDERAL HOUSING ENTERPRISE REGULATORY REFORM… (109-s20060525-16)

There is a link on the page to the original source, the Congressional Record.

Full text of McCain’s 5/5/2006 letter to the Treasury Secretary:

http://s3.amazonaws.com/propublica/assets/docs/gsereform060505.pdf

Obama’s 3/22/2007 letter to the Treasury Secretary

From the Wall Street Journal:

In the summer of 2005, a bill emerged from the Senate Banking Committee that considerably tightened regulations on Fannie and Freddie, including controls over their capital and their ability to hold portfolios of mortgages or mortgage-backed securities. All the Republicans voted for the bill in committee; all the Democrats voted against it. To get the bill to a vote in the Senate, a few Democratic votes were necessary to limit debate. This was a time for the leadership Sen. Obama says he can offer, but neither he nor any other Democrat stepped forward.

Instead, by his own account, Mr. Obama wrote a letter to the Treasury Secretary, allegedly putting himself on record that subprime loans were dangerous and had to be dealt with. This is revealing; if true, it indicates Sen. Obama knew there was a problem with subprime lending — but was unwilling to confront his own party by pressing for legislation to control it. As a demonstration of character and leadership capacity, it bears a strong resemblance to something else in Sen. Obama’s past: voting present.

Link to Wall Street Journal 10/15/08:

Obama Voted ‘Present’ on Mortgage Reform – WSJ.com

Link to full text of 3/22/2007 Obama letter to Federal Reserve Chairman and Treasury Secretary:

Obama Urges Bernanke, Paulson to Fight Foreclosures, Hold Homeownership Summit | Print | U.S. Senator Barack Obama

Note: Obama’s letter concentrated on foreclosures in low income communities, while McCain’s letter and speech to the Senate, which predated Obama’s by 10 months, highlighted the threat that problems at Fannie Mae and Freddie Mac held for the entire economic system.

Democrat Actions in 2004

YouTube – Democrats Caught Defending Freddie, Fannie

Viewers will need to sift out the editorializing between clips toward the end of this eight minute video.

Highlights:

Democrat Maxine Waters…no crisis, praises Raines.

Republican Royce:…”new structure is needed.”

Democrat Davis harangues regulator.

Democrat Barney Frank…nothing wrong, blames regulator, not Raines.

Democrat Bill Clinton in 2008, lays blame mostly on Democrats.

Note: It is not entirely clear that Franklin Raines, former Fannie Mae CEO, ever advised the Obama campaign. A Washington Post story said he took calls from the Obama campaign for advice on mortgage and housing policy. It has not been shown that Raines is a full-time or even frequent adviser to Obama. In 2006 the government filed 101 civil charges against Raines. Raines agreed to a multi-million dollar settlement, mostly paid by a Fannie Mae insurance policy. Since the Post story, both Raines and the Obama campaign have denied that Raines ever advised Obama. More below, under Media Matters.

Media Matters – Hannity again misled on Raines’ purported role with the Obama campaign

Clicking on the “profile” link in the following paragraph takes you to the Washington Post Raines article.

As Media Matters noted, in a September 19 Fact Checker post of McCain’s ad, Michael Dobbs wrote that the McCain campaign cited three Post items as evidence of an Obama/Raines connection, but that all three items were based on one conversation Raines had with Post staff writer Anita Huslin. In a July 16 profile of Raines, Huslin reported that Raines had “taken calls from Barack Obama’s presidential campaign seeking his advice on mortgage and housing policy matters.”

Following The Money

OpenSecrets | Update: Fannie Mae and Freddie Mac Invest in Lawmakers – Capital Eye

Obama is the second highest recipient of money from Fannie and Freddie. McCain appears way down the list. Use Ctrl/F to find his name.

What do you think?