Tuesday, October 7, 2008

An "association" that actually matters

Keating Economics: John McCain & The Making of a Financial Crisis

2 comments:

SBVOR said...

ALL of the evidence, from even the MOST “Liberal” of sources, PROVES that this pathetic and unfounded attempt to smear McCain with the crimes of Keating is unmitigated BUNK!

1) Although McCain had dealings with Keating (who was a constituent in McCain’s district), McCain was NOT connected in ANY WAY to the CRIMES committed by Keating.

2) McCain did NOT support, IN ANY WAY, Keating’s request for regulators to ignore his violations. McCain did NOT favor either skirting OR eliminating these regulations. McCain did NOTHING to assist Keating in ANY WAY!

3) In FACT, even the New York Times admits that the Keating scandal ONLY involved Democrats (which is precisely why the Dems were so DESPERATE to lynch the ONLY Republican they could even REMOTELY connect to Keating)!

Quoting the New York Times:

“The special counsel to the Senate Ethics Committee has recommended that the panel clear two of the five Senators under investigation for their links to the savings and loan debacle, Congressional officials said today.

In a confidential report submitted to the committee on Sept. 10, the special counsel, Robert S. Bennett, concluded that there was not adequate evidence to merit a full-scale investigation of John Glenn, an Ohio Democrat, and John McCain, an Arizona Republican, several officials said.”

“If Mr. McCain is dropped from the investigation, the political implications could be significant: He is the only Republican under scrutiny, and Republicans could portray the scandal as a Democratic one.”


4) Quoting the very “Liberal” PBS Online News Hour:

“The Senate Ethics Committee concluded that Glenn and McCain's involvement in the scheme was minimal and dropped the charges against them. In August 1991, the committee ruled that the other three [DEMOCRATIC] senators had acted improperly in interfering with the Federal Home Loan Banking Board's investigation.”

Click here for the UNDENIABLE FACTS on what REALLY caused the current housing mess (AND the Keating related S&L mess).

Click here and learn what Obama does NOT want you to know.

The Contrarian Reviewer said...

I really don't understand your first claim. By all accounts, McCain DID help delay the investigation of Keating's dealings, which is the ethical breach at issue here.

Here's Rolling Stone's account of the incident:

"When McCain became a senator in 1986, filling the seat of retiring Republican icon Barry Goldwater, he was finally in a position that a true maverick could use to battle the entrenched interests in Washington. Instead, McCain did the bidding of his major donor, Charlie Keating, whose financial empire was on the brink of collapse. Federal regulators were closing in on Keating, who had taken federally insured deposits from his Lincoln Savings and Loan and leveraged them to make wildly risky real estate ventures. If regulators restricted his investments, Keating knew, it would all be over.

"In the year before his Senate run, McCain had championed legislation that would have delayed new regulations of savings and loans. Grateful, Keating contributed $54,000 to McCain's Senate campaign. Now, when Keating tried to stack the federal regulatory bank board with cronies, McCain made a phone call seeking to push them through. In 1987, in an unprecedented display of political intimidation, McCain also attended two meetings convened by Keating to pressure federal regulators to back off. The senators who participated in the effort would come to be known as the Keating Five.

"'Senate historians were unable to find any instance in U.S. history that was comparable, in terms of five U.S. senators meeting with a regulator on behalf of one institution,' says Bill Black, then deputy director of the Federal Savings and Loan Insurance Corporation, who attended the second meeting. 'And it hasn't happened since.'

Following the meetings with McCain and the other senators, the regulators backed off, stalling their investigation of Lincoln. By the time the S&L collapsed two years later, taxpayers were on the hook for $3.4 billion, which stood as a record for the most expensive bank failure — until the current mortgage crisis. In addition, 20,000 investors who had bought junk bonds from Keating, thinking they were federally insured, had their savings wiped out.

"'McCain saw the political pressure on the regulators,' recalls Black. 'He could have saved these widows from losing their life savings. But he did absolutely nothing.'

"McCain was ultimately given a slap on the wrist by the Senate Ethics Committee, which concluded only that he had exercised 'poor judgment.' The committee never investigated Cindy's investment with Keating."

To me the key passages are these: then-FSLIC deputy dirctor Bill Black's observation that McCain 'could have saved these widows from losing their life savings. But he did absolutely nothing'; and the Senate Ethics Committee's conclusion that McCain had exercised "poor judgment" (an understatement if there ever was one). To the extent this election is about character and (ahem) judgment, I think the verdict is clear.