Barack Obama's take on the Wall Street turmoil today:
“The challenges facing our financial system today are more evidence that too many folks in Washington and on Wall Street weren’t minding the store,” Mr. Obama said. “Eight years of policies that have shredded consumer protections, loosened oversight and regulation, and encouraged outsized bonuses to CEOs while ignoring middle-class Americans have brought us to the most serious financial crisis since the Great Depression.”
The problem with Obama's statement is that he was one of the store-minders who worked against reforming Fannie Mae and Freddie Mac (which I think his statement above encompasses as he's echoed calls of other Democrats saying "where was the administration?"). The Washington Post has a great story here. Starting with Clinton, the need to reform Fannie Mae and Freddie Mac was obvious, but Congress held up reform. The Bush White House, led by CEA adviser Greg Mankiw among others, tried to get the GSEs reformed to follow standard accounting procedures, be required to reduce their risky portfolios, etc. But:
"How did Fannie and Freddie counter such efforts? They flooded Washington with lobbying dollars, doled out tens of thousands in political contributions and put offices in key congressional districts. Not surprisingly, these efforts worked. Leaders in Congress did not just balk at proposals to rein in Fannie and Freddie. They mocked the proposals as unserious and unnecessary."
Whose campaigns did Fannie and Freddie so heftily contribute to? Here's a list. #3 on that list? Barack Obama. Democrats, including Finance Committee chairman Christopher Dodd at #1, make up the majority of the dollars. These are the people who declared Fannie and Freddie "fundamentally sound" (Dem. Rep Barney Frank in 2003). (HT to Greg Mankiw for the GSE info).
So, McCain staffers-- do you think you can create an ad with the above? Fannie Mae bankrolled Obama's campaign and later the taxpayers paid for its bailout. That's truthful. Obama just threw you a softball.
Fannie Mae and Freddie Mac are the classic example of what Obama supposedly is railing against. A huge corporation that played by its own rules, lobbied Congress to look the other way and avoid reforms, succeeded, and ended up costing taxpayers billions. Obama wasn't part of the solution, he was part of the problem. I don't know McCain's stances in any of the previous years, but I doubt you'd find him working against the reforms.
BTW-- I think when McCain says (as he did again today) "The fundamentals of the economy are strong," he is talking about the same thing I am teaching in class, like my previous post. However, without McCain's needed clarification of that comment, people think he's lost his marbles and Democrats are wisely using it as ammunition. McCain's team could answer.