McCain: Witness for the Prosecution

If you would like to read a well researched article on this subject, here it is:

http://proteinwisdom.com/?p=13271

Refreshing, J. West, in this currently fulminant and fluff-filled environment.

Why would Obama need to resort to push polling when he's got bloggers to do his bidding?

Really, does anyone think that bringing up a 25 year old investigation (which led to McCain being cleared of impropriety but chastised for poor judgment while three Democrats were found to have improperly interfered in an investigation) is going to deflect from the Democratic party's complicity in the Fannie Mae and Freddie Mac debacle?

There's plenty of blame to go around to both parties for our current economic meltdown, but it's clear that on Fannie and Freddie it has been the GOP (particularly Bush and McCain) who foresaw disaster and attempted to increase oversight, while the Dems fought it every step of the way.

http://hotair.com/archives/2008/09/16/whose-pol...

http://hotair.com/archives/2008/09/17/mccains-a...

So I guess it's understandable that Obama's supporters need to change the subject, and I guess the Keating scandal fits the bill. Of course, having made the choice to use this tactic of deflection in the first place, the blogger will have to take responsibility for the fact that his article is itself serving the same purpose as a push poll.

Oh, you may want to avoid talking about a politician profiting from a real estate deal with a shady character though. Ditto for getting campaign contributions from the folks that you're supposed to be overseeing (http://www.opensecrets.org/news/2008/07/top-sen....) Glass houses and all that, you know.

True leadership from both sides of the aisle:

The McCain Camp:

"...McCain Shifts Position on AIG"

http://www.bloomberg.com/apps/news?pid=20601103...

The Obama Camp:

"You'll notice that Obama doesn't really assert anywhere in here that he supports -- or opposes -- this bailout."

http://blogs.abcnews.com/politicalpunch/2008/09...

It's pretty reassuring to know that these two are displaying magnificent leadership qualities. There's more...McCain wanted a commission to investigate, Obama dismissed it; now however Pelosi is calling for it:

http://www.politico.com/blogs/bensmith/0908/Oba...

Good Grief!!

Apologies for the repetition in my comment above- I can't seem to make the edit function work, and am I the only one who pines for the idiot buttons to imbed html links??

CStanley said: "am I the only one who pines for the idiot buttons to imbed html links??"

If you're using Firefox you can download an add-on called "BBCodeXtra" and you'll have your wish. :-)

That plus Firefoxs built in spell check is why I switched. Two years and I've had no problems. Actually bookmarking threads on blogs was, for me at least, easier.

“Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry….

“The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

''We have seen in recent months that mismanagement and questionable accounting practices went largely unnoticed by the Office of Federal Housing Enterprise Oversight,'' the independent agency that now regulates the companies.
So, let me get this straight…. Bush and GOP leaders in Congress wanted to create a new agency because Freddie Mac manipulated its books and because critics have said that Fannie does not adequately hedge against rising interest rates….
So in order to keep Freddie from cooking it’s books and to guarantee Fannie would enter into more derivatives contracts (isn’t that one of the reasons financials are failing… because of these complex financial transactions?) Bush wanted to create a new agency. I thought that was called more bureaucracy… Any reason why Bush didn’t address the incompetence of the Republicans run agencies who oversaw Fannie and Freddie to begin with?

I love the spin holding up this article as proof that the Dems wanted less regulatory oversight. First of all this was just a plan being introduced by the White House to Congress for the first time. There was not even any legislation written to debate. The underlying reason to create a new government agency to oversee Fannie and Freddy was not based on any notion that Fannie/Freddie would fail due to their business practices. But the reason there was concern was because of the incompetent GOP oversight of the two agencies in the first place. Bush wanted more government to address the accounting problems, not to fix any “systemic” risk in the types of transactions the companies entered into. Quite the contrary, as the NY Times article pointed out, critics of the existing scheme wanted Fannie and Freddie to enter into MORE derivatives transactions. So to somehow blame Dems on the current financial crises for expressing concerns on a “plan” to move the oversight of Fannie and Freddie into a brand new government agency is ridiculous. I’m not saying that the Dems didn’t have some role to play… but I am saying that pointing to this article on a plan (not even legislation) being introduced to Congress to create more government bureaucracy and a new agency in which the Dems expressed their initial concerns is not the smoking gun. Unless of course you feel that Bush should propose a plan, the GOP-controlled Congress (at that time) should write legislation without any input from any other interested party and have Bush sign it into law is the way our government should work….

CS, the link you provided states that the "greasy hands" were bipartisan.

In the 2006 election cycle, Fannie Mae was giving 53 percent of its total $1.3 million in contributions to Republicans, who controlled Congress at that time. This cycle, with Democrats in control, they've reversed course, giving the party 56 percent of their total $1.1 million in contributions. Similarly, Freddie Mac has given 53 percent of its $555,700 in contributions to Democrats this cycle, compared to the 44 percent it gave during 2006.

Seems Freddie Mac only worried about who was in power, they contributed greater monies to the party in leadership, 2006 Republican - 2008 Democrats.

Stockboy, while I can see your point, I need more information to know if you are correct- the NYT article here clearly states that Congress had the regulatory oversight, not POTUS:
http://query.nytimes.com/gst/fullpage.html?res=...

"The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios. "

Yet now that you mention this, I'm confused, because if OFHEO is part of HUD, then it would seem that the executive branch is responsible. Can anyone shed more light on this?

Of course, Rudi, that's SOP. But why then is Stein pointing out McCain getting lobbyist money as though that's something Obama or other Dems don't do?

On one point, though, Stockboy, I definitely think you are the one who is spinning- and that is when you downplay the resistance that was put up by the Dems in Congress. Did you catch this part in the NYT piece from 2005?

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

I haven't seen any evidence that the resistance to Bush's proposal took the form of "Why do we need a new agency, just fix the problems with the existing oversight board in order to clean up these very real problems." Instead it was, 'This is a ruse by the GOP to claim there is a financial problem with these companies that provide affordable housing to the working poor.'

One more point, Stockboy- in the second linked article from Hotair above, you can follow additional links to see that McCain did in fact cosponsor a bill to create a better oversight agency:
http://www.govtrack.us/congress/record.xpd?id=1...

From what I can tell, the bill never came to a vote. Was this solution the correct one, and would it have prevented the recent crisis? I have no idea. But at least you can't argue that McCain was asleep at the wheel, since he clearly spoke of grave concerns even three years ago, while others where dismissive of the problems.

CStanley, good points in your responses…. And I can’t answer all of them because I have questions about any subsequent legislation (if the GOP did decide to tackle the issue). My original reply was to point out that the linked article was reporting on a brand new plan in 2003 that the Bush Administration had announced to Congress. Given that it was just a proposal and that Dems expressed concerns about it does not mean that the Dems would be against any eventual legislation.

As far as some of your other very good comments: From the NY Times article the regulatory body is, “The Office of Federal Housing Enterprise Oversight, which is part of the Department of Housing and Urban Development…” Thus it appears that Congress can set the capital-reserve requirements for Fannie and Freddy, but that is different than ensuring Fannie/Freddie are actually meeting those ratios.

Concerning McCain… McCain (in your linked article) in May of 2006 was speaking on the very same accounting irregularities that were raised in the NY Times article three years previously. The entire time the GOP controlled congress so if this was one of their priorities then I have to ask why they never passed it. Perhaps they were too busy passing the bankruptcy reform (which got either unanimous or near unanimous support from the GOP) or some other bills which they deemed more important…. I guess the GOP got distracted by Terri Schiavo and passing legislation (back in March 2005) that did wonders to help the American public….

At any rate, you raise some good points. I don’t know what happened to any eventual legislation, but it is clear that the GOP did not consider it to be worth the effort to push through, like they did so much else at the same time even against the opposition of the Dems.

One last note, the link you provided has this disclaimer prominently displayed in the sidebar, “Though often a transcript of the debates on the House and Senate floors, like C-SPAN transcripts, the Congressional Record can be significantly modified by Members of Congress after the fact. Entries in the Congressional Record can reflect the edited, prepared versions of statements actually made on the floor, and on very rare occasions can contain seeming entire debates between Members of Congress that never took place.” Given that fact that this record can be changed, and given that fact that McCain and Palin removed a lot of apparently “damaging” information from the web when McCain first announced Palin as a running mate, I place very low stock in the information from this record. Even if it does support my argument that the GOP didn’t act on the 2003 plan that the White House wanted.