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Obama Needles McCain Over Wall Street Ties

By Shailagh Murray 
DUNEDIN, Fla. -- Sen. Barack Obama took a break from debate prep at a rundown resort here to swipe at Sen. John McCain over his cozy ties to corporate executives, the big bogeymen these days as Congress and the Bush administration try to clean up the Wall Street mess.
"Now, in the last few days, my opponent has decided to start talking tough about CEO pay.  He's suddenly a hard-charging populist. And that's all well and good. But I sure wish he was talking the same way over a year ago, when I introduced a bill that would've helped stop some of the multimillion-dollar bonus packages that CEOs grab on their way out the door. Because he opposed that idea," Obama said.
Obama offered the "Shareholder Vote on Executive Compensation Act" in 2007 to allow shareholders to hold nonbinding votes on executive compensation terms. It's still languishing in the Senate Banking Committee.  
"I sure wish he felt the same outrage about CEO pay when his top economic adviser -- who he calls a 'role model' -- walked away with a $42 million package after being fired from Hewlett Packard," Obama continued. He was talking about Carly Fiorina, one of McCain's chief economic advisers, although she hasn't been seen much in recent days.

"You see, the John McCain you've heard from over the last few days is a lot different than the John McCain who's been in Washington for the last twenty-six years," the Democratic nominee asserted, before a raucous crowd of 11,000 at the Toronto Blue Jays spring training stadium. "He talks about getting tough on Wall Street now, but he's been against the common sense rules and regulations that could've stopped this mess for decades. He says he'll take on the corporate lobbyists, but he put seven of the biggest lobbyists in Washington in charge of his campaign. And if you think those lobbyists are working day and night to elect my opponent just to put themselves out of business, well I've got a bridge to sell you up in Alaska."

By Web Politics Editor  |  September 24, 2008; 2:34 PM ET
Categories:  Barack Obama , Economy , John McCain  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati   Google Buzz   Previous: McCain's Barbarians at the Gate
Next: McCain Calls for Debate Delay to Focus on Financial Crisis


McBush needs his nap first, then he needs more tuition to know the difference between SEC and FEC, then he needs to remind himself which of his numerous flip-flops he is now on, and then he needs more medications. Then he may be ready to debate and talk about the economy. BUT at this rate, McSlime and Pain will NEVER debate before Nov. 4th. After all, the Repub camapign said the vote is not about issues but about personality. Like who has "racial misgivings," who is more of a celebrity, who can see Russia and skin a moose and kill wolves from helipcopters better. And the media is letting him get away with this crap. Just like his wife let him get away with calling her a "CU*T" in front of strange men. We are all going bankrupt because this bottom-of-the-class 20+ years Senator voted to regulate every time

Posted by: lin | September 25, 2008 1:44 AM | Report abuse

McCain is too frantic, jittery and erratic. Too reckless, too political. He

This makes me feel very uneasy. What happens if he drops dead? Palin?

No f***ing way.

Posted by: Jan | September 24, 2008 11:19 PM | Report abuse

700 Billion dollars. 700 Billions dollars.

This is a joke right? 2 1/2 page poorly written document requesting 700 Billion dollars? No warning? No time to work out the complexities?

What the hell has happened to us. Have we lost our sanity here?

This is the Iraq war times 2.

To have voted for Bush the first time was a foolish mistake that has set this country back 20 years or better. To have voted for him the second time was blind, selfish ignorance. To vote for McCain is nothing short of deliberate treason.

Posted by: laura | September 24, 2008 11:10 PM | Report abuse

I hear McCain wants to debate on November 5th.

Posted by: sue | September 24, 2008 11:04 PM | Report abuse

same policies

same policies

Posted by: Jonathan | September 24, 2008 6:28 PM | Report abuse

JakeD says:
"That's right, people. None of Barack HUSSEIN Obama's economic advisors have ever made any money in the economy."
Please accept my apologies for being off topic, but I've been wondering lately if referring to people with their middle name in caps is some sort of internet protocol. I keep seeing "Barack HUSSEIN Obama" all over the Internet. Am I being rude by not referring to "John SYDNEY McCain"? I'd hate to not accord Senator McCain the same level of courtesy as Senator Obama. Please advise.

Posted by: Maargen | September 24, 2008 5:40 PM | Report abuse

Christopher London and thebob.bob:

What are you going to say "negative" about Obama if he agrees to go back to D.C. as well?

Posted by: JakeD | September 24, 2008 5:15 PM | Report abuse

McCain needs to head back to DC to get more Depends so he does not mess himself during the debate.

Posted by: Christopher London | September 24, 2008 4:52 PM | Report abuse

A desperate campaign is failing. Panic! His VP pick is exposed as a neophyte. His decades of pushing for banking and security de-regulation is shown to be the cause of the biggest economic crisis since '29. He has given up every principled stand he's taken and allowed the Bushies to run his campaign, and without Rove, they're doing it badly. DO SOMETHING QUICK!!! So he chicken's out of the debate and calls for the creation of a committee! More of the same from John McCain.

Posted by: thebob.bob | September 24, 2008 4:50 PM | Report abuse

When Bush (sorry, I mean what VP Cheney instructs him to vociferate ...) applies the sacred (and only) republican economic rule: laissez faire ... it reminds one of a monotheistic religion's standard answer for everything in the universe: god's will, so do nothing, stand motionless.

The sad truth is that Bush's republican-true "laissez faire" implemented economically in the broad economy results in a "laissez dehors" (leave out or leave outside). And that's exactly what has happened in the past 8 years - only fat repub cats have gotten richer, while the other 99% of the population have been taken to the cleaners: either they are financially worse off or their sons & daughters have been killed/injured in two idiotic wars. The explanation is "country first", you last. Try saying this in a E.U. political event - you will be tarred and feathered publicly.

Furthermore, could anyone explain (no, not you again, Ms Palin) what a future "victory" in dusty Afghanistan or in dusty Irak means to people living in earthquake-likely Los Angeles or wolf-shooting (from helicopters) Wasilla, Alaska?

Nada, nichts, nul ... nothing, that is.

Posted by: hadeze | September 24, 2008 4:42 PM | Report abuse

Mr Robt get your fact straight. They still need 2/3 for anything significant to pass.

MrUniteUs - Nice tery but you might want to interperse a few more facts in the matter.
Yeah S.190 was INTRODUCED in committe in 2005 but was killed in 2006.

Let's see - who controlled congress in 2006. Oh That's right, it was the Democrats.

Posted by: robt | September 24, 2008 4:27 PM

Posted by: Omidal | September 24, 2008 4:39 PM | Report abuse

McCain is having trouble today preparing for the debate and thinking about the bailout too. Completely understandable, if you consider that he fudged his Depends this morning after seeing his poll numbers.

Posted by: HughBriss | September 24, 2008 4:28 PM | Report abuse

MrUniteUs - Nice tery but you might want to interperse a few more facts in the matter.
Yeah S.190 was INTRODUCED in committe in 2005 but was killed in 2006.

Let's see - who controlled congress in 2006. Oh That's right, it was the Democrats.

Posted by: robt | September 24, 2008 4:27 PM | Report abuse

Now McSame wants to cancel the debate and "suspend" the campaign. Lol. What a poser and a loser. It is obvious that McCain is getting desperate and will try anything at this point to change the debate. It is Republican deregulation, dysfunction, and corruption that got us into this mess. Suddenly McSame is concerned about the mess on Wall St. when he was a more than willing participant in the Keating 5. LOL. The GOP is becoming more irrelevant by the day as Barack's poll numbers continue to climb. Look...all this JakeD guy can do is resort to name typical Repub fashion. GOOD BYE GOP and GOOD RIDDANCE.

Posted by: ProudLiberal | September 24, 2008 4:23 PM | Report abuse

Hey factcheck- How come you started in 2005? 12 times in the last 50 years the republicans mounted major campaigns to dismantle the banking laws. In 1999 McCain and Gramm led the successful assault on and voted to repeal the fundamental banking law that had protected consumers, investors and the banks themselves for 50 years. This was clearly a Republican initiative, and you left it out. By the way, Biden voted against repeal.

Posted by: davie | September 24, 2008 4:22 PM | Report abuse

Retricting a few CEO's pay as a condition for a $700 billion bailout is quite different from restricting every CEO's pay. One is responsible government; the other is theft.

Posted by: JakeD | September 24, 2008 2:41 PM

Actually, for there to be a theft the offender must do some sort of taking. So, for such legislation to be "a theft" the government would have to take the money that exceeds the threshhold.

However, the proposed limit does not have a provision for the government to take any money; it only has a provision that executives cannot take more than a certain threshhold amount.

A restriction on another's taking is not theft. It may be referred to as a restraint, but it is not a theft.

Posted by: scott032 | September 24, 2008 4:17 PM | Report abuse

"Sen. Barack Obama took a break from debate prep at a rundown resort here..."

What's the matter, Shailagh? Unhappy with the accomodations?

Anyway, it's about time someone talked about ridiculous CEO pay and how to put a lid on it. The disparity between the highest and lowest paid workers in a company has never been higher. I wish I could remember the name of the company, but in the founding articles, the CEO can never make more than 100X the lowest-paid employee of the company, whoever that is.

Posted by: Mazarin | September 24, 2008 4:17 PM | Report abuse

McCane is panicking.

Ok. He said he called Obama and Bushism + Congress to tell them that he wants to postpone the debate and return to Washington for the bailout bill.

Why the hell he did not wait for Obama's response until he made his announcement.

Is this the way you act Diplomatically.
This is just a political ploy

Posted by: Omidal | September 24, 2008 4:12 PM | Report abuse

JakeD: Do you really think you are helping your side? Perhaps you should get someone who is clever to help you. Or at least someone who has higher standards of critical analysis - like maybe a fish, or a bag of hair.

Posted by: Joel | September 24, 2008 4:10 PM | Report abuse

Bill s.190 Sponsored by Chuck Hagel was never made it out the of the Republican dominated committe. Remember in 2005 the Republicans were in control both houses of Congress and the presidency.

Posted by: MrUniteUs | September 24, 2008 4:08 PM | Report abuse

GREAT POINT - Obama - the socialists’ puppet.

What you left out was the fact those caring, concerned, democrats killed S. 190 in committee. Obama, Clinton, and Dodd received a total of $390K from Freddie Mac and Fannie Mae in an unbelievably breif period of time. I wonder if that's why the all voted AGAINST S. 190.

The democraps couldn't let anything get approved that would make the republicans look good. Who cares that is going to cost their ignorant constituents $700B? Correct - Their ignorant constituents don't pay taxes so it won't cost them a dime.

Posted by: robt | September 24, 2008 4:03 PM | Report abuse

> Retricting a few CEO's pay as a condition for a $700 billion bailout is quite different from restricting every CEO's pay. One is responsible government; the other is theft.

Yeah, it's theft all right. Theft from the stockholders who (in theory) OWN the company. Or will you insist that I call that "conversion"?

Which makes one wonder why Carly Fiorina is a "role model" to John McCain for taking $42 million for outsourcing jobs, causing mass layoffs and nearly killing HP.

Posted by: JakeR | September 24, 2008 4:01 PM | Report abuse

So much passion is this dicussion. How about chaging tunes for a bit when it comes to casting blame.

First: Corporations are primarly motivated by increasing shareholder value, which tends to turn them into a sort of immoral beast. In particular, they will obey the law when profitable to do so and circumvent it otherwise (plenty of examples i won't go into); if the analysis shows that you could dump toxic waste and get a $10M fine or pay $50M for proper disposal, which one do you think most corporations would choose? However, Fannie and Freddie did what they did because there was a market for it.

Second (and most importantly): how about pointing the finger the other way? That is, at the instant gratification mentality that's dominant in this society. That's what created the mess in the first place, starting from lower-middle class families who wanted houses they could not afford all the way to traders and accountants that fudge the numbers because most fat bonuses are based on very short-term company outlook.

My humble opinion: the democrats and republicans are both to blame, as well as the company executives and accountants, but I think the real culprits are the parents (rich and poor) that couldn't teach their children financial responsibility and common sense.

Posted by: LowTalker | September 24, 2008 3:58 PM | Report abuse

Obama is a Harward graduate and McCain is a STUPID guys who happened to be in the army and hey, lets not forget, got caught. Thats it? He is a war hero because he got caught??? Thats his merrit? Kerry was better than that. And the poor guy was still blemished for things he never did.

Barak could have made his millions by joining some big corps but he CHOSE to not do so. I respect him for that.

McCain could not even do that. All he could do was cheat on his previous ailing wife and find another bimbo who was Rich.

Posted by: Dax | September 24, 2008 3:56 PM | Report abuse

Factcheck - You're kidding right?

How dare you Republican apologists (& the AEI) push deregulation of everything from energy policy (Enron) to Wall Street and now try to disown the results. This is 100% the result of the kind of deregulation that McCain advisor Sen. Phil Gramm pushed.

I thought the Republican party was the party of personal responsibility. Well, stand up and take responsibility.

Posted by: ProAmerican | September 24, 2008 3:55 PM | Report abuse

While Obama was scrounging up enough money to scam his way into a sweetheart mortgage deal with the convicted felon Rezko; McCain was co-sponsoring S.190.

While Obama was taking money from Fannie/Freddie to the tune of $150K; McCain was arguing before the Senate that there must be more oversight into any organizations involved in secondary lending of subprime loans.

Now that Obama has his house and his $150K - the rest of us are left to supply the $700B it will take to cover for Obama's lack of experience, brains, and character.

Posted by: Obama - the Socialists' puppet | September 24, 2008 3:55 PM | Report abuse

McCane is a D-bag, a weasel,a manipulator.
He was not born that way.

The Repubs and the Neocons have got his soul.

I just read from USA Today online that he wants to cancel the the debate and go to Washington to vote on the bailout bill.

What a coward.

He had a bad week with Davis and all his lobbyists friends he is now trying to cut and run.

What a weasel.
He does not put country first, he only have his self interest at heart.

Posted by: Omidal | September 24, 2008 3:54 PM | Report abuse

In his appearances, McCain tries to connect the accounting scandals with the broader meltdown in the mortgage markets. But the current crisis arose because banks and mortgage companies made unregulted, uninsured risky “subprime” loans to people with poor credit histories that were then packaged into securities and sold to institutional investors. As interest rates rose and home prices began to fall, homeowners unable to refinance the loans or sell their properties began to default, unleashing a cascade effect through financial markets. That phenomenon had nothing to do with Fannie and Freddie’s internal problems; in fact, both firms were praised for cushioning the financial free fall and keeping the market afloat by spending billions of dollars to purchase subprime loans.

Even if the 2006 effort to strengthen oversight had succeeded, it’s debatable whether it would have averted the subprime crisis. The extent of the problems was not yet fully known, and it’s a leap of faith to suggest that regulators granted expanded power would have noticed a deterioration in Fannie and Freddie’s loan portfolios soon enough, and would have sounded an alarm. Shaken by the extent of the subprime crisis, Congress and the Bush administration earlier this year completed a regulatory overhaul by combining OFHEO and the Federal Housing Finance Board into a new regulatory body, the Federal Housing Finance Agency. Last weekend, the government took the additional step of placing the two firms into conservatorship — essentially a government takeover in which Treasury will extend up to $200-billion of support to the companies.

I give McCain some credit for weighing in on problems surrounding Fannie Mae, even though he got involved after a comprehensive government report issued a loud alarm to anyone watching. And didn't co-sponsor the subsequent bill by Hagel

However, his attempts to depict those efforts as some sort of early warning that could have lessened the current credit crisis just don't wash. All McCain was talking about then was the potential fallout of accounting troubles in Fannie Mae and Freddie Mac. He didn't say anything about a freewheeling climate among creditors that had major financial institutions becoming badly leveraged on bad loans.

Posted by: Anonymous | September 24, 2008 3:52 PM | Report abuse

if i had a corporation to run. I had a choice between Obama, Mccain, palin... I would take the havard educated lawyer.

Posted by: wes | September 24, 2008 3:50 PM | Report abuse

>>Retricting a few CEO's pay as a condition for a $700 billion bailout is quite different from restricting every CEO's pay. One is responsible government; the other is theft.

NO, it is still not. The money is left with the company with the shareholders. Unlike the CEOs, the middle class don't have nice packages when they are fired or when the companies went down.

Posted by: notafool | September 24, 2008 3:49 PM | Report abuse

McCain is a Republican - the Party of Big Business, remember? He has fought for financial deregulation for his entire political career. If he suddenly switches now, it only makes him look weak and unprincipled. The voters can see this. They are not all idiots. The polls are showing it too - Obama is currently 70 electoral votes ahead. []

Posted by: mikeC | September 24, 2008 3:49 PM | Report abuse


McCain was a late co-sponsor of S190 and made one floor speech about it after it had died a Republican Controlled Senate Banking Committee because the National Association of Home Builder's lobbied against it, claiming it had some serious flaws: “In contrast, (to the House version) the Senate bill, S. 190, contained many restrictive provisions that could harm the nation’s housing finance system, including: restrictions on asset holdings, discretion to raise minimum capital, burdensome program approval process, and a regulatory structure tilted away from housing.

A more pertinent question for McCain is why he would make much of his co-sponsorship of S. 190 in the 109th Congress, but when Senator Hagel introduced the current version of the bill, S. 1100, Senator McCain's name does not appear on the current list of co-sponsors.

On the Freddie and Fannie question, it is as McCain said: Obama is No. 2 on the list, with $126,349, right after Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee, who had $165,400.

But the list requires a few notes of explanation.

Corporations cannot give to candidates, so the Center for Responsible Politics list adds up contributions from Fannie and Freddie employees and their families. Obama has received a lot of money during his presidential campaign, though, and Fannie and Freddie don't make his list of top 20 companies. (The top three companies with employees donating to Obama are Goldman Sachs, University of California, and Citigroup, according to the center.

The New York Times looked at contributions from Fannie and Freddie's boards of directors and lobbyists, who are technically not employees. That analysis found Fannie and Freddie-related contributors gave $116,000 to John McCain and his related committees, compared with $16,000 to Obama and his related committees.

Fannie and Freddie are only a piece of the problem. And it's fact that Phil Gramm was a prime architect of a 2000 bill that kept regulators' hands off of "credit default swaps," an exotic financial tool which helped enable the bundling and selling of crappy subprime mortgages to investors.

Posted by: BAC | September 24, 2008 3:46 PM | Report abuse

Why was the bill rejected on party lines? Seems to me that we're lacking some internal validity on your story because you're not presenting all the facts. I could be wrong, but I won't know until you update the story to include some discussion about why the bill was 'rejected' by democrats.

The current state of affairs has been escalating since before 2005 anyway, so I think your article is lacking some external validity as well.

Try again hot-shot.

Posted by: David | September 24, 2008 3:46 PM | Report abuse

a man with 7 houses and 13 cars is going to washington to help me. yeyyyyyyyyy

Posted by: wes | September 24, 2008 3:45 PM | Report abuse

> Carly Fiorina and Hewlett Packard had nothing to do with the financial meltdown

And Obama never said that she did! Though Phil Gramm DID, and he's also a McCain economic adviser.

However, Carly Fiorina DID nearly kill HP, DID put them through outsourcing & mass layoffs, and she DID take a $42 million severance package for nearly killing the company after all of that. The stock shot up 7% the day she was fired.

And McCain just the other day started talking about greedy CEOs taking huge payouts while the company suffers, but he conveniently forgot about his own advisers. He obviously doesn't know their history too well, though MOST of the people I know online could have told you all about Carly from the ill-advised merger, to her degree in medieval history, and her nickname of "Chainsaw" Carly, and the destruction of HP's legendary research culture that led to their good reputation. And don't even mention how she caused so much mistrust on the board that the board members started snooping on each other, which in turn lead to the HP spying scandal.

It's not like no one tried to tell him that she was a BAD pick for an adviser. But McCain obviously doesn't take a close look at the people he hires to fill important roles. Given that he's going to need a large team of people to manage the entire country, does anyone think we need more "gutsy" surprise picks that turn out to be terrible?

This isn't American Idol. We need competent leaders, not just popular or good looking ones. And if he thinks he needs more women for political reasons, he should turn to Senators Dole, Hutchinson & Snowe, all of whom are respected female Republican leaders. McCain shouldn't be snubbing the experienced and capable women just because he wants to hire the more beautiful ones.

Posted by: H | September 24, 2008 3:43 PM | Report abuse

Obama is a lyin piece o' work. Not to mention a dog. Nothing constructive to say about ANYTHING or ANYONE. Just ask Gianna. Now at 31, she is an abortion survivor! Obamy attacked her when she made public osama obamas voting record concerning the Illinois bill denying aid to babies who survived abortion. There you go leftists, you hope YOUR next president! God have mercy on this country, and those of you who might vote him and the islamic hord into the "white house".

Posted by: Auntie Abortion | September 24, 2008 3:42 PM | Report abuse

Obama is a lyin piece o' work. Not to mention a dog. Nothing constructive to say about ANYTHING or ANYONE. Just ask Gianna. Now at 31, she is an abortion survivor! Obamy attacked her when she made public osama obamas voting record concerning the Illinois bill denying aid to babies who survived abortion. There you go leftists, you hope YOUR next president! God have mercy on this country, and those of you who might vote him and the islamic hord into the "white house".

Posted by: Auntie Abortion | September 24, 2008 3:42 PM | Report abuse

After knowing all this if there is somebody who can still think about voting for McCain then he deserves McShame as his president, period.

Posted by: wellwisher | September 24, 2008 3:41 PM | Report abuse

I don't like this suspension of the debates. Too much panic going on. He has a staff. Use them.

Obama seems to be staying on message.

Posted by: Bring it on! | September 24, 2008 3:39 PM | Report abuse

Good for Obama. Had McCain not been so snarky to try to paint Obama influenced by this or that connection, Obama would not have had to waste his time campaigning on this level. He's got so much more to offer. Fighter pilot vs. Humanitarian ... what will the US voter say?

Posted by: Gaias Child | September 24, 2008 3:31 PM | Report abuse

McCain is turning into a real skunk. He actually could have done much better, I think, had he remained honest and run a respectable campaign. That's what happens when you let the Rovian sociopaths into the room--first they suck all the air out, then they redefine "ethics" until the term has no meaning, then they begin to lie and convince their candidate to lie (anything goes, as long as you GET THE POWER). And even when you catch them in a lie, they continue to repeat it. It's actually quite awesome to witness.

I fully expect some nasty "bombshell" any day now, a new, full-bore character attack on Sen. Obama (wow, he knows a radical, wow, he knows an angry black preacher!). This is a good man, one who's proven his high moral standards in the way he's conducted himself since college days (not the made-up stuff but his real-life choices and actions). As a dreaded "community organizer," he worked with churches to help out-of-work communities use their own energy and leadership to pull themselves out of poverty and misery. That, instead of grabbing some Wall Street gouge-the-public job, which he could easily have gotten (black guy, Harvard law school graduate, are you kidding, he could have written his own ticket and made a fortune, but that wasn't his choice). He's done public service ever since, and he's never been wealthy until he wrote some incredibly insightful books that hordes of people chose to buy. You can slander him all you want, but this is a man who's walked the walk that all those "party of God" moralists always advocate but won't personally have any part of.

And John McCain, the lobbyist's best buddy, took on a VP candidate who refuses to speak freely to reporters, five weeks before the election. We should all be VERY AFRAID of that fact. Except you partisan Repubs, of course, who will buy anything as long as it's your "team." Common sense would demand that you reject this terrifying choice for VP, but of course this isn't about logic. She said no to the bridge, and that's all you need to know, right?

Posted by: yogi11 | September 24, 2008 3:15 PM | Report abuse


Carly Fiorina and Hewlett Packard had nothing to do with the
financial meltdown but since Obama only knows about community organizing and nothing about business he can't seem to make the distinction.

How the Democrats Created the Financial Crisis: Kevin Hassett

Enough cards on this table have been turned over that the story is now clear. The economic history books will describe this episode in simple and understandable terms: Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally.
Fannie and Freddie did this by becoming a key enabler of the mortgage crisis. They fueled Wall Street's efforts to securitize subprime loans by becoming the primary customer of all AAA-rated subprime-mortgage pools. In addition, they held an enormous portfolio of mortgages themselves.

Take away Fannie and Freddie, or regulate them more wisely, and it's hard to imagine how these highly liquid markets would ever have emerged. This whole mess would never have happened.

It is easy to identify the historical turning point that marked the beginning of the end.

Back in 2005, Fannie and Freddie were, after years of dominating Washington, on the ropes. They were enmeshed in accounting scandals that led to turnover at the top. At one telling moment in late 2004, captured in an article by my American Enterprise Institute colleague Peter Wallison, the Securities and Exchange Comiission's chief accountant told disgraced Fannie Mae chief Franklin Raines that Fannie's position on the relevant accounting issue was not even ``on the page'' of allowable interpretations.

Then legislative momentum emerged for an attempt to create a ``world-class regulator'' that would oversee the pair more like banks, imposing strict requirements on their ability to take excessive risks. Politicians who previously had associated themselves proudly with the two accounting miscreants were less eager to be associated with them. The time was ripe.

The clear gravity of the situation pushed the legislation forward. Some might say the current mess couldn't be foreseen, yet in 2005 Alan Greenspan told Congress how urgent it was for it to act in the clearest possible terms: If Fannie and Freddie ``continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road,'' he said. ``We are placing the total financial system of the future at a substantial risk.''

What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.

Different World

If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed.

But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter.

That such a reckless political stand could have been taken by the Democrats was obscene even then. Wallison wrote at the time: ``It is a classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing.''

Mounds of Materials

Now that the collapse has occurred, the roadblock built by Senate Democrats in 2005 is unforgivable. Many who opposed the bill doubtlessly did so for honorable reasons. Fannie and Freddie provided mounds of materials defending their practices. Perhaps some found their propaganda convincing.

But we now know that many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years.

Throughout his political career, Obama has gotten more than $125,000 in campaign contributions from employees and political action committees of Fannie Mae and Freddie Mac, second only to Dodd, the Senate Banking Committee chairman, who received more than $165,000.

Oh, and there is one little footnote to the story that's worth keeping in mind while Democrats point fingers between now and Nov. 4:
Senator John McCain was one of the three cosponsors of S.190, the bill that would have averted this mess.

Posted by: Factcheck | September 24, 2008 3:01 PM | Report abuse

With Obama's ad attacking McCain for having never used a computer I thought it might be good to look at what Obama has never done. Obama has:

Never run a business
Never served in the military
Never commanded troops
Never balanced a budget
Never written a federal law
Never refused an earmark
Never lowered a tax
Never won an election in which the "field wasn't cleared" of opponents
Never heard Rev. Wright say anything controversial
Never had multiple bones broken leaving him unable to raise his arms over his head making it virtually impossible to operate a keyboard for any length of time

Posted by: Factchecker | September 24, 2008 2:57 PM | Report abuse

Jakie D
The problem with McCain is that he brags about getting rid of Lobbyist and fat cats. His problem.... They run his campaign!!

McCain has been pandering for the last 8 or 9 months. Where's that gas tax holiday? Says one thing does another.... I've owned American Cars all my life... Oh and some foreign ones too. Who needs 13 cars? Just the super rich.....

Posted by: Eric | September 24, 2008 2:54 PM | Report abuse

Yeah, Carly hasn't been heard from since she said that neither McCain or Palin were capable of running a large corporation.

And she should know, because she didn't know how to. But she still got a $42M golden parachute to go away. I wonder how much she wants from McCain to go away. One of his 7 houses? A couple of his 13 cars?

Posted by: Skeptic | September 24, 2008 2:52 PM | Report abuse

That's right, people. None of Barack HUSSEIN Obama's economic advisors have ever made any money in the economy. They are all just one happy bunch of "community advisors".

(Sarcasm off)

Retricting a few CEO's pay as a condition for a $700 billion bailout is quite different from restricting every CEO's pay. One is responsible government; the other is theft.

Posted by: JakeD | September 24, 2008 2:41 PM | Report abuse

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