Pretense: McCain flops at flip-flopping on financial regulation

Pretense: a claim made or implied ; especially : one not supported by fact

Now that the financial markets are collapsing around everyone’s ankles, (and McCain’s pants around his own – now where is Spain?), he’s trying to erase our memories of his longtime record as a firm opponent of regulating the financial industry (or any other).  In truth, he has been a proponent of GOP deregulation ideology going back for decades.

But finally some are calling him on his bullshit. NYTimes yesterday:

The crisis on Wall Street is fundamentally a failure to do the things that temper, detect and punish corruption and greed. It was a failure to police the markets, to enforce rules, to heed and sound warnings and expose questionable products and practices.

The regulatory failure is rooted in a markets-are-good-government-is-bad ideology that has been ascendant as long as Mr. McCain has been in Washington and championed by his own party.

Not only does McCain not have a record of supporting regulation: he has a record of unethically pressuring regulators. The matter of the “Keating Five” is re-surfacing for us to have another look-see.  Back in 1987, he used the power of his office to get regulators to back off the troubled Lincoln Savings and Loan, which just happened to be run by a major McCain campaign contributor, Charles Keating.

As the Boston Globe reported: it was a fiction that McCain was somehow less guilty than the other members of the Keating Five:

Dennis DeConcini, a former Democratic senator from Arizona and another of the Keating Five who hosted the key meeting in his office, said in an interview that McCain has gotten a relatively “free ride” even though DeConcini insists that McCain was the “most culpable” of the senators because he had the closest relationship with Keating

McCain met Keating in 1982, during McCain’s successful run for Congress, and soon began accepting offers from Keating to fly McCain’s family on a corporate plane to Keating’s house in the Bahamas. McCain did not pay for most of the trips until years later, when the matter became public.

The Globe quotes a federal regulator who attended the meeting where McCain sought to protect his contributor from oversight:

“This was an institution that is probably the worst institution in America,” Black said, referring to Lincoln. Instead of trying to help “bring it under control, five US Senators were pushing us in the opposite direction.”

Lincoln’s bankruptcy ended up costing taxpayers 3 billion dollars.

Then there’s the small matter of supporting the The Gramm-Leach-Bliley Act, or GLBA for short. In 1999, this was the very legislation that “got government off the backs” (favorite Republican line) of the financial industry.  GLBA essentially eliminated the barriers between commercial and investment banks to consolidate and merge, so that you could have hedge funds, regular banking, lenders, brokerage services and insurance companies all under one roof.  Plus – GLBA repealed key parts of the Glass-Steagall Act, enacted in 1933 in response to the Great Depression to enact stricter controls, and yes, regulation over the banking industry where speculation had run amok.

GLBA was authored by McCain’s favorite economic advisor to his campaign, former Senator Phil Gramm – the same guy who called us a “nation of whiners”.

Of course, when McCain is trying to win the Presidency and be everything to everyone, it’s easy to see why he’d be against regulation before he was for it. Here is a look at McCain’s back-and-forth on regulation during the last 24 hours:

– Deregulation: McCain issued a statement Monday morning saying that “we cannot tolerate a system that handicaps our markets and our banks.”

– Regulation: McCain’s campaign then put out an ad calling for “tougher rules on Wall Street.”

– Deregulation: This morning, on NBC’s Today Show, McCain said, “Of course, I don’t like excessive and unnecessary government regulation.”

– Regulation: Then, on CBS’s The Early Show, McCain said, “Do I believe in excess government regulation? Yes.”

– Both: On CNBC’s Squawk Box, McCain said, “We don’t want to burden average citizens with over-regulation and government bureaucracy…And I’m proud to be a Teddy Roosevelt Republican, who said, ‘unfettered capitalism leads to corruption,’ and we’ve got to fix this.”

No amount of “straight talk” is going to be able to cover up the total failure of the Republican “free market” ideology.

2 responses to “Pretense: McCain flops at flip-flopping on financial regulation

  1. Pingback: Postscript: More on McCain and the Keating Five « 365 Words Beginning with P

  2. How many people will look at what the House voted down in terms of tougher rules…due to pressure or “sky is falling warnings” from the banking lobby. It makes the “tougher rules” a bit like gilding the lilly (esp. relative to the bank bonus 50% windfall tax in Britain and France in the EU).