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McCain Offers Few Details on Economic Plan

By Robert Barnes
GREEN BAY, Wis. -- Republican presidential candidate John McCain offered few new details this morning on how he would respond to the crisis in the nation's financial markets, instead renewing his criticism of Democratic rival Barack Obama's ties to former heads of mortgage giants Freddie Mac and Fannie Mae.

The campaign yesterday had promised more information about McCain's economic plan. But McCain, in a speech to a hastily assembled meeting of the local chamber of commerce, mostly repeated his call for a new government trust that would identify and help rescue failing financial institutions and a set of principles to guide future regulation and legislation.

McCain said his proposed Mortgage and Financial Institutions trust would be an "early intervention program to help financial institutions avoid bankruptcy, expensive bailouts and damage to their customers. This will get the Treasury and other financial regulatory authorities in a proactive position -- proactive position -- instead of reacting in a crisis mode to one situation after another."

Perhaps because of the intense policy talks currently underway among the Treasury, Federal Reserve and congressional leaders, McCain's speech did not go far beyond a series of calls for greater transparency on Wall Street and tougher consumer protections that he has offered already this week.

While McCain earlier had criticized Democratic congressional leaders for showing a lack of urgency, his only comment today was that he was "hopeful that last night's discussions are a sign they have changed their mind and will take action soon."

Following the same line of attack he is using in a new series of television ads, McCain sharply criticized Obama and his ties to former Fannie Mae and Freddie Mac chief executives James Johnson and Franklin Raines.

"The financial crisis we're living through today started with the corruption and manipulation of our home mortgage system," McCain said. "At the center of the problem were the lobbyists, politicians and bureaucrats who succeeded in persuading Congress and the administration to ignore the festering problems at Fannie Mae and Freddie Mac."

He added: "Senator Obama may be taking their advice, and he may be taking their money, but in a McCain-Palin administration, there will be no seat for these people at the policy-making table. They won't even get past the front gate at the White House."

McCain's prepared remarks follow:

Thank you all very much. It's a great pleasure to be introduced by Governor Sarah Palin -- and I can't wait to introduce her to Washington.

If Governor Palin and I are elected in 46 days, we are not going to waste a moment in changing the way Washington does business. And we're going to start where the need for reform is greatest. In short order, we are going to put an end to the reckless conduct, corruption, and unbridled greed that have caused a crisis on Wall Street.

Here and all across our country, people are wondering what exactly is happening on Wall Street. And with good reason, they want to know how their government will meet the crisis. Clear answers are hard to come by in Washington.

As Senator Obama's leader in Congress memorably put it the other day -- and I quote -- "no one knows what to do." Perhaps given that reaction, it shouldn't surprise us that the Congressional leaders of this do-nothing Congress also said that they weren't going to take action until after the election, claiming that it wasn't their fault. I am hopeful that last night's discussions are a sign they have changed their mind and will take action soon. But any action should be designed to keep people in their homes and safeguard the life savings of all Americans by protecting our financial system.

There are certainly plenty of places to point fingers, and it may be hard to pinpoint the original event that set it all in motion. But let me give you an educated guess. The financial crisis we're living through today started with the corruption and manipulation of our home mortgage system. At the center of the problem were the lobbyists, politicians, and bureaucrats who succeeded in persuading Congress and the administration to ignore the festering problems at Fannie Mae and Freddie Mac.

These quasi-public corporations lead our housing system down a path where quick profit was placed before sound finance. They institutionalized a system that rewarded forcing mortgages on people who couldn't afford them, while turning around and selling those bad mortgages to the banks that are now going bankrupt. Using money and influence, they prevented reforms that would have curbed their power and limited their ability to damage our economy. And now, as ever, the American taxpayers are left to pay the price for Washington's failure.

Two years ago, I called for reform of this corruption at Fannie Mae and Freddie Mac. Congress did nothing. The Administration did nothing. Senator Obama did nothing, and actually profited from this system of abuse and scandal. While Fannie and Freddie were working to keep Congress away from their house of cards, Senator Obama was taking their money. He got more, in fact, than any other member of Congress, except for the Democratic chairmen of the committee that oversees them. And while Fannie Mae was betraying the public trust, somehow its former CEO had managed to gain my opponent's trust to the point that Senator Obama actually put him in charge of his vice presidential search.

This CEO, Mr. Johnson, walked off with tens of millions of dollars in salary and bonuses for services rendered to Fannie Mae, even after authorities discovered accounting improprieties that padded his compensation. Another CEO for Fannie Mae, Mr. Raines, has been advising Senator Obama on housing policy. This even after Fannie Mae was found to have committed quote "extensive financial fraud" under his leadership. Like Mr. Johnson, Mr. Raines walked away with tens of millions of dollars.

Senator Obama may be taking their advice and he may be taking their money, but in a McCain-Palin administration, there will be no seat for these people at the policy-making table. They won't even get past the front gate at the White House.

My friends, this is the problem with Washington. People like Senator Obama have been too busy gaming the system and haven't ever done a thing to actually challenge the system.

We've heard a lot of words from Senator Obama over the course of this campaign. But maybe just this once he could spare us the lectures, and admit to his own poor judgment in contributing to these problems. The crisis on Wall Street started in the Washington culture of lobbying and influence peddling, and he was square in the middle of it.

The financial services industry -- and there are many honest and honorable people who work in it -- plays a vital role in our economy. Mutual fund companies help Americans save for retirement. Banks and lending companies provide the mortgages that help us buy our homes. Investment firms supply the seed money that helps entrepreneurs create tomorrow's jobs. Insurance companies protect us against unknown risks.

Yet as the financial crisis continues and bailouts and bankruptcies mount, it's clear financial firms have lost the trust of the American people. That trust cannot be regained unless we adopt some fundamental reforms. Government has a clear responsibility to act and to defend the public interest. That is exactly what I intend to do.

First, to deal with the immediate crisis, I will lead in the creation of the Mortgage and Financial Institutions trust -- the MFI. The underlying principle of the MFI or any approach considered by Congress should be to keep people in their homes and safe guard the life savings of all Americans by protecting our financial system and capital markets. This trust will work with the private sector and regulators to identify institutions that are weak and fix them before they become insolvent. The MFI is an early intervention program to help financial institutions avoid bankruptcy, expensive bailouts and damage to their customers. This will get the Treasury and other financial regulatory authorities in a proactive position instead of reacting in a crisis mode to one situation after another.

The MFI will restore investor and market confidence, build sound financial institutions, assist troubled institutions and protect our financial system while minimizing taxpayer exposure. This is an important step, but it is not enough. I will also take the additional actions needed to make sure a crisis like this is never allowed to build and break over the American people again.

Second, I will propose and sign into law reforms to prevent financial firms from concealing their bad practices. An inexcusable lack of financial transparency allowed Wall Street firms to engage in reckless behavior that padded their profits and fattened executive bonuses when times were good, but now imperil the financial security of millions of Americans when their bets turned sour.

So much of the damage to our economy could have been avoided if these practices had been exposed to the light of day. Americans have a right to know when their jobs, pensions, IRAs, investments, and our whole economy are being put at risk by the recklessness of Wall Street. And under my reforms for the financial sector, that fundamental right will be protected.

Third, we need regulatory clarity. The lack of transparency in our financial markets went unnoticed by the regulatory agencies scattered throughout Washington charged with protecting the common good. We've got the SEC, the FDIC, the CFTC, the SIPC, the OCC, the Fed. At best, this confusing assortment of regulators and institutions was egregiously lax in carrying out their responsibilities. At worst, they engaged in the old Washington game of guarding their bureaucratic turf, instead of safeguarding the public interest and protecting investors.

Many in the financial services industry also either forgot or neglected their duty to act ethically and honorably. This shortcoming was aided and abetted by the creation of financial instruments that allowed lenders to escape any responsibility for the risk of their loans. In the past, lenders had to pay a price if they made a bad loan. Today, Fannie Mae and Freddie Mac worked with Wall Street to bundle together all these dicey subprime loans and then pushed them off on investors who didn't have the tools of transparency needed to assess or even understand the risk.

The current system promotes confusion, encourages bureaucratic infighting and creates incentives for financial firms to cut corners. We need to enhance regulatory clarity by holding the same financial activity to one regulatory standard. We don't need a dozen federal agencies doing the job badly -- we need the best federal agencies to do the job right.

Fourth, we must ensure that consumers and investors are protected. Our regulatory system must protect consumers and investors by punishing individuals who engage in fraud, break contracts, or lie to customers -- like the predatory lenders who know you can't afford an adjustable rate mortgage, but mislead you into signing one. These actions are criminal and the people who commit them should be behind bars. And corporate governance rules will be reformed so that shareholders have a clear say in determining the pay of CEOs and other senior executives. On my watch, the consequences for corporate abuse will not be more enrichment, but more likely an indictment.

Fifth, in cases where failing companies seek taxpayer bailouts, the Treasury Department will follow consistent policies in deciding whether to guarantee loans. It must have well developed remedies for a financial crisis. With billions of dollars in public money at stake, it will not do to keep making it up as we go along.

Finally, the Federal Reserve should get back to its core business of responsibly managing our money supply and inflation. It needs to get out of the business of bailouts. The Fed needs to return to protecting the purchasing power of the dollar. A strong dollar will reduce energy and food prices. It will stimulate sustainable economic growth and get this economy moving again.

All of these measures will calm and help us to avoid future panics and disasters in the financial markets. But to get through this tough time for America, and to come out stronger, we need a strategy of economic growth. And the massive new tax burden that my opponent plans for the American economy is exactly the wrong answer. His tax increase -- along with the enormous new federal programs he proposes -- are the surest way to turn a recession into a depression. In every respect, the Obama tax hikes would make things even worse for the working people of this country.

I have proposed, and will sign into law, an economic recovery plan for working Americans that is directed to the middle class. It will grow this economy, create millions of jobs and bring opportunity back to Americans. You will get a tax policy that creates family prosperity and allows you to save for the future. I will not raise your taxes on income or investments. And we will simplify the tax code so people can understand it and do their tax returns themselves.

I will give every family a $5,000 credit to buy their own health insurance policy and let them chose their own doctor. This will make insurance affordable to every American.

I will double the child exemption from $3,500 to $7,000 to help families pay for the rising cost of living.

By Washington Post Editor  |  September 19, 2008; 10:08 AM ET
Categories:  John McCain  
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Comments

***Here's a FEW Details***

The Atlantic
September 18, 2008
An economist explains why he thinks McCain's economic policies make more sense
by Steven Landsburg

(Steven E. Landsburg (born 1954) is an American professor of economics at the University of Rochester in Rochester, New York. From 1989 to 1995, he taught at Colorado State University.)


Betting on John McCain

My whole life I've been mystified by the concept of the "undecided voter." I've never had any problem choosing my candidates and didn't see how anyone else could either. But this year, I've been genuinely on the fence, partly because I haven't been paying close attention, and partly because there seemed ample reason to dislike all of the options.
But over the past few days, as McCain and Obama have ratcheted up their rhetoric over each others' "disastrous" economic policies, I decided to do a little research. Along the way, I had a few surprises about John McCain's voting record, some but not all of them pleasant. Now I don't think I'm undecided anymore.
Here are some of the things that made my decision easy, and some that made it hard:
1. Free trade and immigration are my top issues, and McCain wins on both.
These are my top issues for several reasons. First, trade is the engine of prosperity not just for the United States but also for the poorest of the world's poor. Nothing matters more than that. Second, the instinct to care about the national origin of your trading partner (or employer, or employee, or landlord, or tenant) is an ugly one, and the instinct to care about the national origin of other people's trading partners—and on that basis to interfere forcibly with other people's voluntary transactions—is even uglier.
Finally, protectionism, like creationism, requires an extraordinary level of willful ignorance. The consensus for free trade among economists is approximately as solid as the consensus for evolution among biologists, and it is a consensus supported by a solid body of both theory and observation. To ignore that consensus betrays a degree of anti-intellectualism that frightens me.
McCain is quite good on this issue, not just in terms of rhetoric (which I've known for a while) but in terms of voting record (which I've just recently researched). Obama, by contrast, promises to be our first explicitly protectionist president since Herbert Hoover. Some intervening presidents (Reagan, Bush I, and to a lesser extent Bush II) have been weak in their commitments to free trade, but none between Hoover and Obama has so explicitly rejected it.
2. McCain is not Bush. This came as a surprise to me. I'd been assuming, in my ill-read, uneducated way, that McCain had been complicit in most of the great travesties of the Bush administration and the execrable Republican Senate. I've learned that's largely untrue. He voted (to my great surprise!) against the prescription drug entitlement, against the Farm Security Bill, against milk subsidies, against Amtrak subsidies, and against highway subsidies.
Obama, by contrast, is in many ways a continuation of Bush. Like Bush (only far more so ), Obama is fine with tariffs and subsidies. Like Bush, he wants to send jackbooted thugs into every meatpacking plant in America to rid the American workplace of anyone who happens to have been born on the wrong side of an imaginary line. Like Bush, he wants a more progressive tax code. (It is one of the great myths of 21st century that the Bush tax cuts made the tax code less progressive; the opposite is true. If you are in the bottom 38% of taxpayers, you now pay zero income tax—and therefore have an incentive to support any spending bill that comes down the pike.) Like Bush, he wants more regulation, not less.

3. But there's a lot about economics that McCain just doesn't get. This shows up most significantly in his energy policies. Every economist knows that the best way to discourage carbon emissions (or anything else for that matter) is to tax them. But McCain rejects a carbon tax in favor of one slightly inferior policy (cap and trade) and one grossly inferior policy (direct regulation, such as the CAFE standards for fuel efficiency).
In a world of perfect capital markets and perfect information, a cap-and-trade system (provided the government auctions off the permits rather than giving them away) is exactly equivalent to a carbon tax – same effect on everything down to and including the prices of consumer goods. In the real world we live in, it's inferior for two reasons: First, small firms might find it difficult=2 0to raise the necessary capital to buy a permit; this gives an inappropriate advantage to big firms over small ones. Second, I believe it will be harder (for technical reasons I won't go into here) to calculate the efficient number of cap-and-trade permits than to calculate the efficient per-ton carbon tax. Aside from that, the two policies are equivalent in every way. McCain presumably doesn't get this, or he wouldn't have such a strong preference for cap-and-trade.
Worse, he endorses the CAFE standards, which are just a terrible way to control carbon emissions. While a carbon tax gets incentives right at every decision point, fuel efficiency standards give people no incentive, for example, to bike to work instead of drive (in fact, they flip the incentive in the wrong direction). Worse yet, they concentrate brainpower on improving fuel efficiency when there might be far more effective ways to control carbon emissions; with a tax, all innovations are rewarded.
In his support of CAFE standards over carbon taxes, McCain betrays a serious failure to understand how incentives work. The same problem shows up when he thinks you can simply mandate campaign finance limits, as if people who are competing for control of a $15 trillion economy won't be creative enough to find some way to spend hundreds of millions in the effort, no matter how you write your laws.
4. McCain gets health care right. The reason poor Americans get too little health care is that rich Am ericans get too much. The reason rich Americans get too much is that they're overinsured, and therefore run to the doctor for minor problems. The reason they're overinsured is that employer-provided health benefits aren't taxed, so employers overprovide them.
It has been clear for decades that the single most effective way to control health care costs is to eliminate the tax break for employer-provided health care. According to one careful study by my colleague Charles Phelps (admittedly several years old, but I'm not sure anything relevant has changed), this single reform could reduce health care costs by 40% with essentially no effect on health care outcomes.
Essential as this reform may be, I'd always assumed it was a political non-starter. I was therefore astonished to learn that it's the essence of McCain's health care reform. (At the same time, he would give each individual $2500, and each family $5000, to use for health care.)
I am astonished that I hadn't heard about this, and particularly astonished that Barack Obama hasn't thrust it in my face with a negative spin. Possibly he has and I just wasn't paying attention. In any case, this is just what the doctor ordered, and I am delighted that McCain has put it on the table.
Obama, by contrast, wants poor people to get more medical care without addressing the problem of overuse by rich people. Where is that extra medical care going to come from? If the answer is "nowhere," then a primary effect of the Obama plan must be to raise prices, making doctors and hospitals the big beneficiaries.
Of course, there are other things that matter. Foreign and defense policy might matter more than anything, and if I were sure that one or the other candidate were far wiser about these issues, that might be enough to win my vote. But I have no expertise on these matters and no particular reason to trust my own judgment.
I'm sure I'm right about trade and pretty sure I'm right about taxes and health care, but that's because I've thought long and hard about these issues for decades. It seems to me that we ought to be humble about the things we haven't thought hard about, and for me that includes foreign policy. The best I can do is bet that whoever's getting most of the other stuff right is getting this right too.
The bottom line is that I support John McCain. With trepidation.

Posted by: Scott | September 20, 2008 8:39 AM | Report abuse

From the WSJ

"Mr. McCain clearly wants to distance himself from the Bush Administration. But this assault on Mr. Cox is both false and deeply unfair. It's also un-Presidential."

"In a crisis, voters want steady, calm leadership, not easy, misleading answers that will do nothing to help. Mr. McCain is sounding like a candidate searching for a political foil rather than a genuine solution. He'll never beat Mr. Obama by running as an angry populist like Al Gore, circa 2000."

http://online.wsj.com/article/SB122178318884054675.html?mod=todays_us_opinion

Posted by: nowanna1

Posted by: Dave | September 19, 2008 9:19 PM | Report abuse

Holy Cow! We are headed to social Gov. Ok, where is my free Health care! Lets just bail them all out then who will bail out the FED's? Us! Thanks for adding more to the American plate. High gas prices, food untouchable healthcare. What else. Bail out folks who over extended thier budgets by buying homes they can afford. Yeah I will pull my money out of the bank and save on my own. I can't believe this! What are we Americans just a bunch of chumps. We elected these folks to represent our best interst and they blew it. I bet they are not selling their SUV's or worried about how they will pay for their homes, like some don't even know how many they own. Yeah, I feel safe, NOT! For godsake folks we created these monsters and no one policed them now we are paying for them all. Yeah I feel real proud to be am american. I have two young men in the service. I have to wonder what the **** they are fighting for. You know if we screw up on our budget and over spend we get collection agency up your backside. They file liens and granish the people. Accountablity is ours and we get nailed. But when its the big fat Fin. Co. they get bailed out. Sick, sick, sick like spoiled little rich kids who has mom and dad to fall back on. I am already a mom I dont need to be everyones mom. Clean up you own mess!

Posted by: Mellissa | September 19, 2008 4:28 PM | Report abuse

FEDERAL HOUSING ENTERPRISE REGULATORY REFORM ACT OF 2005

GovTrak- Senate Record

Sen. John McCain [R-AZ]: Mr. President, this week Fannie Mae's regulator reported that the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight's report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.

Quick Info
S. 190 [109th]: Federal Housing Enterprise Regulatory Reform Act of 2005
Last Action: Committee on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably.
Status: DeadI join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. 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.

I urge my colleagues to support swift action on this GSE reform legislation.


Posted by: Scott | September 19, 2008 4:02 PM | Report abuse

FEDERAL HOUSING ENTERPRISE REGULATORY REFORM ACT OF 2005

GovTrak- Senate Record

Sen. John McCain [R-AZ]: Mr. President, this week Fannie Mae's regulator reported that the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight's report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.

Quick Info
S. 190 [109th]: Federal Housing Enterprise Regulatory Reform Act of 2005
Last Action: Committee on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably.
Status: DeadI join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. 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.

I urge my colleagues to support swift action on this GSE reform legislation.

Posted by: Scott | September 19, 2008 3:54 PM | Report abuse

GovTrak- Senate Record

Sen. John McCain [R-AZ]: Mr. President, this week Fannie Mae's regulator reported that the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight's report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.

Quick Info
S. 190 [109th]: Federal Housing Enterprise Regulatory Reform Act of 2005
Last Action: Committee on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably.
Status: DeadI join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. 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.

I urge my colleagues to support swift action on this GSE reform legislation.

Posted by: Scott | September 19, 2008 3:51 PM | Report abuse

Politicalbuzz.com-

"Up in the air tonight is the exact role of scandalized former Fannie Mae CEO Franklin Raines in the Obama campaign. Unearthing this long dormant potential thorn for the Dem nominee is a hard-hitting new McCain TV ad that makes the case that Raines is mortgage and housing advisor to Obama.

The source they use for this accusation is a July Washington Post profile of Raines where he said that the Obama campaign had actually called him seeking policy advice on mortgage and housing issues.

In the four years since he stepped down as Fannie Mae’s chief executive under the shadow of a $6.3 billion accounting scandal, Franklin D. Raines has been quietly constructing a new life for himself. He has shaved eight points off his golf handicap, taken a corner office in Steve Case’s D.C. conglomeration of finance, entertainment and health-care companies and more recently, taken calls from Barack Obama’s presidential campaign seeking his advice on mortgage and housing policy matters."
*************
WASHINGTON POST REALLY?

Posted by: Scott | September 19, 2008 3:48 PM | Report abuse

If You were The Boss... which team would you hire?

With America facing historic debt, multiple war fronts,
stumbling health care, a weakened dollar, all-time high
prison population, skyrocketing Federal spending, mortgage
crises, bank foreclosures, etc. etc., this is an unusually
critical election year.

Let's look at the educational background of the
candidates and see what they bring to the job:
Obama:
Occidental College - Two years.
Columbia University - B.A. political science with a
specialization in international relations.
Harvard - Juris Doctor (J.D.) Magna *** Laude

Biden:
University of Delaware - B.A. in history and B.A. in
political science.
Syracuse University College of Law - Juris Doctor (J.D.)
vs.

McCain:
United States Naval Academy - Class rank 894 out of 899
(meaning that, like George Bush, McCain was at the bottom of
his class)

Palin: Hawaii Pacific University - 1 semester
North Idaho College - 2 semesters - general study
University of Idaho - 2 semesters - journalism
Matanuska-Susitna College - 1 semester
University of Idaho - 3 semesters - B.A. in journalism

Now, which team are you going to hire to lead the most
influential nation in the world?

Posted by: Reid | September 19, 2008 3:45 PM | Report abuse

Senator John McCain is standing by comments he made to a Spanish-language radio station in which he refused to rule in or out a meeting with Prime Minister José Luis Rodríguez Zapatero of Spain. His ambiguous statement earlier this week raised questions about whether Mr. McCain intended to direct his remarks at Mr. Zapatero.

In an interview with Radio Caracol Miami on Tuesday, Mr. McCain spoke only in generalities when asked whether, as president, he would sit down at the White House with Mr. Zapatero, who has clashed with the Bush administration over Iraq.

“I’m willing to meet with any leader,” Mr. McCain said, “who is dedicated to the same principles and philosophy that we are for human rights, democracy and freedom, and I will stand up to those that do not.”

Mr. McCain’s comments caused a stir among the press in Spain and did not escape the attention of Mr. Zapatero, who said that Mr. McCain showed “the necessary prudence” with his remarks.

Adding to the controversy, Mr. McCain appeared to conflate Mr. Zapatero with the leaders of Latin American countries during the interview. “I have a clear record of working with leaders in the hemisphere that are friends with us and standing up to those who are not,” Mr. McCain said. “And that’s judged on the basis of the importance of our relationship with Latin America and the entire region.”

When the interviewer specified that she was asking about Mr. Zapatero Mr. McCain ceded no ground.

On Thursday, a McCain adviser, Randy Scheunemann, brushed off questions about whether Mr. McCain meant to strike a more charitable tone toward Mr. Zapatero, saying, “There is no doubt Senator McCain knew exactly to whom the question referred.”

Thanks Scheunemann, you are inching McCaint and peeeuuu Palin closer to the edge of the cliff.....

Posted by: AlexP1 | September 19, 2008 2:14 PM | Report abuse

Democrats for John McCain and Sarah Palin in 2008

Posted by: Teresa | September 19, 2008 2:12 PM | Report abuse

what ever bush say on the economy today that will be john mcsame plan for this economy crises ain't his party the one who has goten us into this mess any way... oh man come people get real...VOTE OBAMA'08 VOTE OBAMA'08

Posted by: renee | September 19, 2008 1:02 PM | Report abuse

From the WSJ

"Mr. McCain clearly wants to distance himself from the Bush Administration. But this assault on Mr. Cox is both false and deeply unfair. It's also un-Presidential."

"In a crisis, voters want steady, calm leadership, not easy, misleading answers that will do nothing to help. Mr. McCain is sounding like a candidate searching for a political foil rather than a genuine solution. He'll never beat Mr. Obama by running as an angry populist like Al Gore, circa 2000."

http://online.wsj.com/article/SB122178318884054675.html?mod=todays_us_opinion

Posted by: nowanna1 | September 19, 2008 12:51 PM | Report abuse

Cite:
Head of State
http://headofstate.blogspot.com/2008/09/cynicism-of-mccains-vp-choice.html

Monday, September 15, 2008
The Cynicism of John McCain

If you read Jeffrey Goldberg's excellent piece on McCain in the new Atlantic, one fact stands out clearly. McCain's stance on the war is inviolate--it involves what for him are principles of honor that stretch back immediately and directly to his own experiences in the Vietnam war, and to those of his father in World War II. Just one example of many in the first-rate article:

"I told Swindle [a cellmate and friend of McCain's] that McCain had argued to me that he doesn’t think about Vietnam overly much when he thinks about the wars of today.

“'Bulls--t,' Swindle said. 'He’ll say Vietnam didn’t affect him, that he doesn’t think about it, that he’s aloof from it. But I see it. It’s there.'”

This is the issue on which McCain is inflexible, certain, fully invested, passionate.

It is equally clear that as a result, he views all other issues as malleable, political issues--stances that can be easily taken, and easily changed, tactically-- in order to win a campaign and thus deal with the issue that, to him, matters.

This is utterly clear in his choice of Palin, where his Vietnam-and-since cynicism about political necessities is manifest--one of feeding the bread and circuses desire of the electorate, giving them, so easily fooled, as they were so easily fooled by the media in Vietnam, what they need, in order to be able to deal with the important issue.

The choice of a remarkably unqualified Vice Presidential choice is simply a political necessity. The attitude towards the public, and the media, in this choice, as in many of the public representations and statements of his campaign, is one of an extraordinary, world-weary, cynicism: Feed the beast with whatever fantasies and half-truths it takes. The fundamentals of the economy are sound. We'll take care of it later.

Goldberg:

"In my conversations with McCain, however, he never appeared greatly troubled by his shifts and reversals. It’s not difficult to understand why: tax policy, or health care, or even off-shore oil drilling are for him all matters of mere politics, and politics calls for ideological plasticity. It is only in the realm of national defense, and of American honor—two notions that for McCain are thoroughly entwined—that he becomes truly unbending."

This is no doubt rooted in McCain's eternal certainties, drummed in by three generations of such certainty. And there is no doubt strength and decency--as well as these "family values"--that drive this commitment to an ideological core.

The question is this: Do we need another president with such a core of ideological inflexibility, rigidity and unwillingness for self-reflection, linked to a long past conflict--and who is willing to resort to half-truths, deceptions, and distortions in its service?

Cite:
Head of State
http://headofstate.blogspot.com/2008/09/cynicism-of-mccains-vp-choice.html

Posted by: Anonymous | September 19, 2008 12:24 PM | Report abuse

Republican presidential candidate John McCain offered few new details this morning on how he would respond to the crisis in the nation's financial markets, instead renewing his criticism of Democratic rival Barack Obama.

My Friends, the reason I offer few details is because I have no ideas or plans as yet. I still waiting for Phil Gramm's assesment. Mean while, I will continue to beat Obama over the head with his ties to the leadership of Fannie. My friends, I would ask you to disregard those who will try to bring up the Keating Scandal in an attempt to paint me as a hypocrite.

Posted by: JohnMcCain | September 19, 2008 12:23 PM | Report abuse

I bit rich for McCain to talk about a "do-nothing Congress". He is a senator himself and so I take it that is an admission of his own failure.

Even worse than his admission of being part of a body of "do-nothings" you have to stop and wonder how he knows what Congress is doing. When was McCain last in the Senate? His voting record shows mostly absenteeism since March or February. Maybe a McCain supporter can remember a vote since then and can tell us how Johny Mac voted.

Cool as a moose here in Hamburg, Chris Brown

Posted by: chris.brown | September 19, 2008 12:18 PM | Report abuse

Your right Obama-Junkie, this crisis requires a leader who can provide specific actions and concrete policy details NOW. I'm sure when Senator Obama speaks today he will...

Obama releases a statement reacting with caution and calibration...

Adds he is refraining from delivering a more detailed agenda until he can fully review the details of the plan proposed by Bernanke, Paulson.

Bet you're wishing you'd waited 30 minutes before posting that comment.

Posted by: MattUF | September 19, 2008 12:12 PM | Report abuse

Check this out to see who will really be in charge if these clowns win:
http://www.youtube.com/watch?v=dyMqGPochWA

Posted by: Did I mention I'm a member of Keating 5??? | September 19, 2008 12:09 PM | Report abuse

"Amir Taheri and McCain's poor judgment

John McCain appears to have believed every bit of nonsense that Iraqi exiles in Washington circulated during their campaign to involve the US in an invasion of Iraq. One of the chief people involved in selling those deceptions in DC was Randy Scheunemann, McCain's top foreign policy adviser. Yesterday both of them were involved in promoting another deception, this time fabricated by an Iranian exile – showing once again that McCain never outgrows his poor judgment, any more than he wises up and casts off the discredited advisers he relies upon.

The background is this: Yesterday a Republican propaganda outlet, the New York Post, published a column by Amir Taheri that accused Barack Obama of secretly trying to delay the withdrawal of US troops from Iraq. Various right-wing nuts were all a-twitter about the allegation – despite two very compelling reasons to disbelieve it.

(1) Amir Taheri is a notorious fraudster. He was once powerful under the Shah's regime but now is an Iranian exile and neocon shill. Taheri has been exposed repeatedly for simply making things up to fit his political agenda. For example, in May 2006 he published a report in the National Post (Canada) falsely stating that a new Iranian law required Jews to wear special clothing and yellow patches to identify themselves in public. The paper had to retract the story, blaming Taheri, and apologize for it. Taheri's reputation, already extremely low in 2006, has been in the dirt ever since.

(2) Taheri's column in the New York Post refutes his own claim that "OBAMA TRIED TO STALL GIS' IRAQ WITHDRAWAL". Taheri gives the game away at the very beginning of his column.

While campaigning in public for a speedy withdrawal of US troops from Iraq, Sen. Barack Obama has tried in private to persuade Iraqi leaders to delay an agreement on a draw-down of the American military presence.

According to Iraqi Foreign Minister Hoshyar Zebari, Obama made his demand for delay a key theme of his discussions with Iraqi leaders in Baghdad in July.

"He asked why we were not prepared to delay an agreement until after the US elections and the formation of a new administration in Washington," Zebari said in an interview.

Obama insisted that Congress should be involved in negotiations on the status of US troops - and that it was in the interests of both sides not to have an agreement negotiated by the Bush administration in its "state of weakness and political confusion."

In other words, by Taheri's own account Obama did NOT "delay an agreement on a draw-down" of US troops from Iraq. Instead, Obama told the Iraqis he thought that the US Congress needed to sign off on any Status of Forces Agreement (SOFA) – a position Obama has held publicly since Bush announced in 2007 that he was seeking a long-term SOFA treaty. SOFA regulates what US troops may do in Iraq and how they shall coordinate with the Iraqi government. It has nothing necessarily to do with any timetable for withdrawing troops from Iraq; if the US government decides to withdraw troops, it doesn't need an OK from the Iraqi government.

So Taheri was doing what he does best, spread misinformation.

Predictably, it was just a matter of hours before the McCain campaign would rush to embrace Taheri's baseless smear of Obama. Here is a statement released by his top adviser, Randy Scheunemann, of PNAC infamy:

At this point, it is not yet clear what official American negotiations Senator Obama tried to undermine with Iraqi leaders, but the possibility of such actions is unprecedented. It should be concerning to all that he reportedly urged that the democratically-elected Iraqi government listen to him rather than the US administration in power. If news reports are accurate, this is an egregious act of political interference by a presidential candidate seeking political advantage overseas. Senator Obama needs to reveal what he said to Iraq's Foreign Minister during their closed door meeting.

The charge that he sought to delay the withdrawal of Americans from Iraq raises serious questions about Senator Obama's judgment and it demands an explanation.

Actually, as I remarked, the episode reflects badly not on Obama's but on McCain's judgment. Heck, Scheunemann even admits that "it is not yet clear" what negotiations Taheri was claiming Obama had interfered with. In other words, the McCain camp recognizes that Taheri's allegations are incoherent. But they still chose to go ahead and tie themselves to Taheri's nonsense just because there's a "possibility" that something or other is amiss.

It sure sounds like McCain and his band of neocons have taken to heart Cheney's "One Percent Doctrine" (by which, if there's as much as a 1% chance that something nefarious is afoot, then one should act as if the possibility is a proven fact).

For what it's worth, today Obama responded by setting the record straight about Taheri's wild allegation.

Obama's national security spokeswoman Wendy Morigi said Taheri's article bore "as much resemblance to the truth as a McCain campaign commercial."

In fact, Obama had told the Iraqis that they should not rush through a "Strategic Framework Agreement" governing the future of US forces until after President George W. Bush leaves office, she said.

In the face of resistance from Bush, the Democrat has long said that any such agreement must be reviewed by the US Congress as it would tie a future administration's hands on Iraq.

"Barack Obama has never urged a delay in negotiations, nor has he urged a delay in immediately beginning a responsible drawdown of our combat brigades," Morigi said.

In this instance, McCain's poor judgment in embracing Taheri's claim clearly goes well beyond the point of 'recklessness'. It's less clear to me what the right term is to describe his management style, however. Perhaps no term can adequately convey how foolishly McCain is behaving."

http://smintheusblog.blogspot.com/2008/09/amir-taheri-and-mccains-poor-judgment.html

Posted by: nowanna1 | September 19, 2008 11:51 AM | Report abuse

Why doesn't this article name the current and former lobbyists for Fannie and Freddie currently working in high level policy positions for the McCain campaign?

Posted by: tas | September 19, 2008 11:46 AM | Report abuse

Hopefully other news media outlets are reporting what Washington Post and myself saw, very few details from McCain. And the joint townhall McCain and Palin held yesterday was more evidence of that from their stump speeches with only vague generalities and Obama attacks. This was the case even when asked by voters.

Posted by: Obama-Junkie | September 19, 2008 11:45 AM | Report abuse

This post did not include Senator McCain's entire speech. The significant portion left off was the last part of his speech and is below:

Under my plan, a married couple with two children making $35,000 will get $5,000 to pay for health insurance and additional medical expenses. This family would get another $1,050 from my child exemption. That adds up to over $6,000. That is a lot more than what any hardworking middle class family, gets under the Obama plan.

Business taxes will be cut from the second highest in the world at 35 percent to 25 percent. Tax incentives will spur investment in new plants and equipment. Research and development incentives will keep companies on the cutting edge of their industries. Healthcare costs will diminish. Companies will stop sending jobs overseas to low-cost, low-tax countries and start creating jobs here in America.

I will expand markets for our goods and services. A one in five of all jobs in this country are linked to world trade. In five states alone Pennsylvania, Ohio, Michigan, Wisconsin and Colorado over 5 million jobs depend on trade. My economic recovery plan will create millions of jobs in America instead of driving them overseas.

I will adopt an "all of the above" energy policy which expands our use of oil, natural gas, clean coal and nuclear facilities. We will embark on a national mission to build an alternative energy base, creating millions of new jobs. We will create the most diversified energy economy in the world. And, I will return to the American economy the $700 billion dollars we send overseas every year to buy oil.

My opponent offers a very different economic future. He has continuously shifted his position on taxes. At the beginning of this campaign he promised to raise taxes on your savings and investments. He said he won't raise taxes for most people but he has voted 94 times in his short Senate career for tax increases and against tax cuts. He said he would only tax the rich, but he voted this year to raise taxes on those making just $42,000. Senator Obama has simply not given Americans good reason to trust him with your tax dollars.

My opponent is against lowering taxes on businesses which are the second highest in the world. He will impose mandated health insurance on businesses that would cost up to $12,000 per employee. He opposes free trade. He also wants to take away the fundamental right of workers to have a secret ballot when voting to be part of a union.

Now is not the time for these destructive policies that will cripple business growth, destroy jobs and hurt the middle class. Now is the time to take action to address this crisis and take action to put our economy back on a path of growth.

Even though Democratic leaders say they don't know what to do, I believe the deep problems afflicting our financial system won't be solved by one political party. There is only one candidate in this race who has a record of reaching across the aisle to work out the bipartisan solutions needed to move our country forward in times of crisis — and I will bring that same spirit of bipartisan cooperation to the White House. It took members of both parties to get America into this mess, and it will take all of us, working together, to lead the way out.

Thank you.

Posted by: MattUF | September 19, 2008 11:39 AM | Report abuse

Report confirms Obama negotiated with Iraqi Foreign Minister Update: Taheri receiving death threats from Obama supporters
Sep 17, 2008 - Amir Taheri's September 15th has been, for all intents and purposes, confirmed over the past 24 hours. Obama did indeed conduct illegal foreign policy negotiations with Iraqi foreign minister Hoshyar Zebari. As we wrote on the 15th, this amounts to a truly audacious betrayal of the American people and our military, and deserves a full investigation by the American government, and scrutinization by the media. This from the American Spectator:
The Obama campaign spent more than five hours on Monday attempting to figure out the best refutation of the explosive New York Post report that quoted Iraqi Foreign Minister Hoshyar Zebari as saying that Barack Obama during his July visit to Baghdad demanded that Iraq not negotiate with the Bush Administration on the withdrawal of American troops. Instead, he asked that they delay such negotiations until after the presidential handover at the end of January.

The three problems, according to campaign sources: The report was true, there were at least three other people in the room with Obama and Zebari to confirm the conversation, and there was concern that there were enough aggressive reporters based in Baghdad with the sources to confirm the conversation that to deny the comments would create a bigger problem.
There you have it, corroborating witnesses were present. On top of this the report goes on to say that the Obama campaign is not even bothering to really deny the charges, simply spin it in the hopes that his media devotees will simply sweep it under the rug like every other scandal.

America really needs some reporters with the testicular fortitude to start an investigation. Is the media so in the tank for Obama that they would go out of there way to ignore what might be one of the biggest breaches of trust of a presidential candidate in American history?

Chris Mathews (in)famously complained to Pat Buchanan that media access to Governor Sarah Palin was necessary for the American people to make an informed decision about her. Is this very same media, which demanded Palin postulate in front of them for the good of the people, going to allow this bombshell to go unscrutinized, withholding what could be crucial information necessary to making an informed decision in November? If so, their hypocrisy is not only deep, but dangerous.

Update: Amir Taheri is receiving death threats from Obama supporters. In his follow up opinion piece in today's NY Post, Taheri writes:
While I am encouraged by the senator's evolution, I must also appeal to him to issue a "cease and desist" plea to the battalions of his sympathizers - who have been threatening me with death and worse in the days since my article appeared.

Posted by: Scott | September 19, 2008 11:26 AM | Report abuse

PALIN BACKED RON PAUL? http://www.veeppeek.com

YESTERDAY MORE CAME OUT ABOUT SARAH PALINS ALLEDGED AFFIAR. http://www.hotpres.com

Posted by: Anonymous | September 19, 2008 11:06 AM | Report abuse

:)

Posted by: Obama2008 | September 19, 2008 10:44 AM | Report abuse

Just what we need, another bureaucracy without any clear design or mission. And probably McCain's scheme will run on tax payers' fuel, like recent bailouts he approves of.

Maybe the old guy should stick to savings and loans in his "reform" and leave this Cat 5 monster to folks that have bigger brains and some knowledge about economics.

But if he does go back to changing the savings and loans he had better display better judgment the next time.

Posted by: Buck TX | September 19, 2008 10:44 AM | Report abuse

Posted by: Obama2008 | September 19, 2008 10:43 AM | Report abuse

Troopergate saga continues, can you say impartial? (part 2)

"Tamgani donated $400 to Palin for her 2006 race for Governor."
http://www.followthemoney.org/database/StateGlance/contributor.phtml?d=524413232


So her self appointed board, with at least one contributore to her past campaign is impartial?

I wonder what if any relationship the board members have to Palin as Palin is known for appointing her frineds to government positions.


"So when there was a vacancy at the state Agriculture Department, she appointed a high school classmate, Franci Havemeister, to the $95,000-a-year directorship. A former real estate agent, Ms. Havemeister cited her childhood love of cows as a qualification for running the roughly $2 million agency.

Ms. Havemeister was one of at least five high school classmates Ms. Palin hired, often at salaries far exceeding their private sector wages."
http://www.dallasnews.com/sharedcontent/dws/news/politics/national/stories/DN-palin_14pol.ART.State.Edition1.26e9372.html


Also it looks like at least one board member shares Palin's depth of experience.


"PLENERT, LAURA
Food & Beverage, MCDONALDS OF KETCHIKAN, RESTAURANT MANAGER, MCDONALDS, AK, 2002 1 $500"

http://www.followthemoney.org/database/search.phtml?searchbox=Laura+Plenert

Posted by: nowanna1 | September 19, 2008 10:34 AM | Report abuse

John McCain is nothing more than a liar.

I think it's time to roll out the Keating 5 ads- you remember that don't you John?

Posted by: Bob | September 19, 2008 10:34 AM | Report abuse

Troopergate saga continues, can you say impartial? (part 1)

"Sarah Palin initially welcomed the investigation of accusations that she dismissed the state's public safety commissioner because he refused to fire her ex-brother-in-law, a state trooper. "Hold me accountable," she said.
...
But she has increasingly opposed it since Republican presidential candidate John McCain tapped her as his running mate. The McCain campaign dispatched a legal team to Alaska including O'Callaghan, a former top U.S. terrorism prosecutor from New York to bolster Palin's local lawyer.
...
McCain-Palin presidential campaign spokesman Ed O'Callaghan announced today that Todd Palin would not appear, because he no longer believes the Legislature's investigation is legitimate.
...
Sen. Bill Wielechowski, D-Anchorage, said the McCain campaign is doing all it can to prevent the Legislature from completing a report on whether the GOP's vice presidential nominee abused her power as governor."

http://www.adn.com/palin/story/530493.html


"Campaign spokesmen said Thursday that while the governor is resisting the legislative investigation, she is cooperating with a separate inquiry the state Personnel Board is conducting.
The board, and not the Legislature, is the proper authority to look into Monegan's dismissal, they said."
http://www.adn.com/troopergate/story/530885.html


"But Palin's state-hired attorney Thomas Van Flein said the matter should be taken up by the state's personnel board. Van Flein and Palin have asked the three members to resolve the dispute over the firing.

The board's members are appointed by the governor. One of the three, Debra English, was re-appointed by Palin in January. The other two members - Laura Plenert and Alfred Tamagni, Sr - have served since 2004 and 2006, respectively."

http://www.cbsnews.com/stories/2008/09/06/politics/main4422385.shtml

Posted by: nowanna1 | September 19, 2008 10:33 AM | Report abuse

What part of "Frank Raines never advised Obama on anything" doesn't Mr. Magoo get? If McCain were president, we'd be in full meltdown mode.

Posted by: JakeD | September 19, 2008 10:28 AM | Report abuse

FINANCIAL TERRORISM A ROOT CAUSE
OF WALL STREET MONEY MELTDOWN?

Once again, Congress is being asked to rush through emergency legislation which will grant effective control of the economy to the government.

Officials continue to blame lax lending policies on the part of the mortgage industry for spawning this crisis. But is that entirely true?

And is there a hidden agenda at work?

Consider this:

http://www.nowpublic.com/world/targeting-u-s-citizens-govt-agencies-root-cause-wall-street-financial-crisis

Posted by: scrivener | September 19, 2008 10:27 AM | Report abuse

It's like an entire presidential campaign has been derived from an extended right wing radio rant. It's insulting.

Posted by: zukermand | September 19, 2008 10:24 AM | Report abuse

Biggest Bailout in U.S. History?

So now Paulson and Bernanke are working with Congress to create a government entity to take all the bad debt off of the books of banks and financial institutions. Naturally, the stock market shot up 400 points yesterday on the news.

The reason?

The casino stays open.

It is impossible to overstate the implications of the moral hazard here.

The bottom line here is this: There are no serious consequences for this kind of failure. Sure there will be layoffs (mostly of people who had nothing to do with these failures), but the men who are responsible will walk away wealthy and unscathed. The entities that they helped ruin will have learned only that they can take every risk. They have nothing to lose and everything to gain.

Needless to say, this bailout cannot pass Congress without a series of strict regulations to protect against this kind of epic failure again. New regulations are essential for banks, investment firms, insurance companies, mortgage brokers, et al. The unfettered free market, left to its own devices, would have (and still may) destroy this country. If there was ever an indictment of GOP policies, this is it. Watching McCain flail around in response to this disaster would be comical if it wasn’t so serious and sad.

And there is still a giant red elephant in the room. Putting aside that our economy will be in tatters in 2009-2010 (consumer debt in massive default, unemployment in double digits, inflation, and so on), there is still the matter of our national debt. $10 trillion and counting without including Fannie and Freddie, loans to the Fed, loans to the FDIC, and this newly announced mother of all bailouts.

Who, the question must be asked, will bailout the ultimate institution that is too big to fail?

At what point do America’s finances become a liability? At what point is our debt downgraded? At what point does the rest of the world simply stop lending to us? At what point does America default?

America is truly too big to fail. But with irresponsible GOP governments, we’ve taken on so much debt that the possibility is real.

We’ve never saved for our rainy day and now it’s pouring.

The government keeps opening a bunch of cheap umbrellas and the wind is blowing hard.

Unless the world bails us out (which they would likely do, but you never know) there is no shelter.

The biggest bailout in U.S. history is still to come.

http://nahnopenotquite.com/

Posted by: ES | September 19, 2008 10:24 AM | Report abuse

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