Glenn Wilson

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. ...

There has been a lot of talk about who is to blame for this crisis. A look back at the story of 2005 makes the answer pretty clear.

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. ...

How the Democrats Created the Financial Crisis

Wow! I guess John McCain is really a reforming, regulator, after all? And despite the common wisdom, it is Democrats that want less regulation ("small government") and Republicans that want more regulation ("big government")? Maybe not.

1. The article is written by an adviser to the McCain campaign. Not exactly an unbiased source. Of course, that does not prove it is not true.

2. Some analysis that I have read of the bill is that despite it's name, it would have worsened the lack of oversight, not made it better. Other analysis says the opposite. It is a long bill and I have no opinion at this time. But, let's just assume for the sake of discussion that it would have been good, added needed regulation and would have helped to stop the recent problems with Freddie Mac and Fannie Mae.

3. The article points out that John McCain was a cosponsor and implies that therefore he was leading the fight to get this bill passed and he was a reformer and tried to add regulation to Freddie and Fannie and that would have saved us from the current mess!! Except, that is not how it went down. Is John McCain a cosponsor of the bill? Why, yes he is, look here: S.190 Sponsors and Cosponsors. But look at the dates. He joined as a cosponsor 14 months after the bill was introduced and after it was dead in the water. I think the technical term for this is "political stunt."

4. If McCain had helped with this bill when it was introduced he might have been able to help get it to a vote and passed by the (Republican Majority) Senate in 2005:

Mr Oxley reached out to Barney Frank, then the ranking Democrat on the committee and now its chairman, to secure support on the other side of the aisle. But after winning bipartisan support in the House, where the bill passed by 331 to 90 votes, the legislation lacked a champion in the Senate and faced hostility from the Bush administration.

Adamant that the only solution to the problems posed by Fannie and Freddie was their privatisation, the White House attacked the bill. Mr Greenspan also weighed in, saying that the House legislation was worse than no bill at all.

"We missed a golden opportunity that would have avoided a lot of the problems we’re facing now, if we hadn’t had such a firm ideological position at the White House and the Treasury and the Fed," Mr Oxley says.
Oxley hits back at ideologues

So McCain did not help with the bill when it was introduced; it was Bush, not Democrats, that kept it from succeeding in the (Republican Majority) Senate and McCain did not sign on until after the fact.

McCain did not lead on this. He followed Bush's lead. The Bush administration was responsible for this bill dying, not Democrats.

Ok. What other banking and mortgage bills did John McCain sponsor or cosponsor in this time frame? This is the only bill sponsored or cosponsored by McCain in the last two sessions of Congress that deal with mortgage or banking reform.
S. 190
Sponsors and Cosponsors
S. 190 [109th]: Federal Housing Enterprise Regulatory Reform Act of 2005

What about Barack Obama? Here is the list of bills sponsored or cosponsored by Obama in the same timeframe dealing with mortgage or banking reform:
S. 98
Sponsors and Cosponsors
S. 98 [109th]: Community Choice in Real Estate Act

S. 2280
Sponsors and Cosponsors
S. 2280 [109th]: STOP FRAUD Act

S. 1356
Sponsors and Cosponsors
S. 1356: Industrial Bank Holding Company Act of 2007

S. 1181
Sponsors and Cosponsors
S. 1181: Shareholder Vote on Executive Compensation Act

S. 1222
Sponsors and Cosponsors
S. 1222: STOP FRAUD Act

S. 2452
Sponsors and Cosponsors
S. 2452: Home Ownership Preservation and Protection Act of 2007

S. 2595
Sponsors and Cosponsors
S. 2595: S.A.F.E. Mortgage Licensing Act of 2008

John McCain Tuesday September 23, 2008 on Paulson's Bailout Plan:


Barack Obama on the Economy:

Maybe Sarah Palin can help John McCain out here?

(about the 4:50 mark)
COURIC: But he's been in Congress for 26 years. He's been chairman of the powerful Commerce Committee. And he has almost always sided with less regulation, not more.

PALIN: He's also known as the maverick, though. Taking shots from his own party, and certainly taking shots from the other party. Trying to get people to understand what he's been talking about — the need to reform government.

COURIC: I'm just going to ask you one more time, not to belabor the point. Specific examples in his 26 years of pushing for more regulation?

PALIN: I'll try to find you some, and I'll bring them to you.

Draw your own conclusions.

Labels: economy