Monday, October 06, 2008

The Keating 5 and John McCain

With the Dow down 800 points at one point today, what do McCain and Palin talk about? Well one thing they didn’t talk about today was the financial crisis in the credit market. Instead of making a strong case for more government regulation of the financial markets and banking, Governor Palin concentrated on former Weather Underground member and Obama acquaintance, Bill Ayers, and on Obama’s former preacher. John McCain also took that tack, but also tried to associate Barack Obama with Chicago-style politics.

It’s just that they can’t talk about the financial crisis. They can’t talk about it because this crisis bears such a huge resemblance to the Savings and Loan Meltdown of the late 80’s that it just won’t do to talk about it.

Because John McCain was neck deep in the politics and the economics that lead up to the federal government’s bailout of 747 savings and loan institutions, including the one owned by Charles Keating - Lincoln Savings and Loan.

What is true is that John McCain supported deregulation of the S$L industry, just as he has supported deregulation of banks. S&Ls were allowed to invest in more risky ventures, and while things were looking up, everyone made money. Just as we had people making money while banks were making bad investments in sub-prime mortgages and everything was copasetic as long as the housing market went up and up.

McCain was caught up in the scandal, and was one of the Keating 5 along with John Glenn, Alan Cranston, Dennis DiConcini, and Don Riegle. At first, McCain, who had received campaign contributions from Keating, exerted pressure on federal S&L investigators at the behest of Keating. When the investigators disclosed that Lincoln was under criminal investigation for a number of charges, McCain flipped and cut off all contact with Keating.

McCain was later admonished by an investigating Senate panel and was told that he exercised “poor judgment.”

These things are coming out again. Partly in response to the verbal attacks on Obama’s character – attacks that one has to complete several leaps of logic to understand where they are coming from. And partly because they are germane to today’s issues.

Issues like how McCain was for deregulation before he was against it.

Issues like how McCain simply cannot learn from his past mistakes.

Issues like how McCain has, in his own colleagues’ opinion, “poor judgment.”

So the last thing McCain will do is talk about what is on the minds of Americans from coast to coast. Instead he and Palin attempted to change the subject once again. A move right out of page 17 of Karl Rove’s playbook.

I don’t think it’s going to work this time, though. This isn’t a trivial issue they are trying to lay diversions around. This is rapidly becoming THE issue.

Ignoring THE issue will only make McCain seem more and more irrelevant.

Because the relevance of John McCain in the financial crisis is not necessarily something McCain wants to talk about. Like the relevance shown in Barack Obama’s latest mini documentary on how relevant John McCain is on the issue.

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