Joe Klein: McCain knows as much about the economy as Palin knows about the Bush doctrine

grantcart

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Mon Sep-15-08 05:50 PM
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Joe Klein: McCain knows as much about the economy as Palin knows about the Bush doctrine

In a extremely hard hitting editorial Joe Klein came with both guns blazing in one of the hardest hitting editorials in the MSM

http://www.time-blog.com/swampland/2008/09/their_brand_is_collapse.html

September 15, 2008 10:36

Their Brand is Collapse

Posted by Joe Klein |

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This has been the long-standing Republican bait and switch--scaring small businesses with the threat of new regulations if the Democrats win, commiserating with larger businesses about the evils of environmental and plant safety rules, while lifting as many regulations as possible governing the financial titans whose credit should be at the heart of new economic development. But that hasn't been happening: the financial titans have been going for the quick buck rather than the sound one. Money and creativity have been redirected during the Reagan-Bush era away from substantive loans to real businesses into a Ponzi scheme of borrowing by investment bankers, so they could engage in the most irresponsible, if lucrative (for them) speculative lending imaginable...In this sense, the mortgage crisis was a perfect metaphor for Republican financial governance: Investment banks like Lehman--R.I.P.--took loans to invest money in...bad loans. In this case, the loans were bad mortgages. This is called throwing good money after bad.

Actually, John McCain has excellent experience--a ringside seat--in the vagaries of this experiment in greed and anarchy. He was a member of the Keating Five. This was the signature scandal of the Savings and Loan crisis, twenty years ago. It concerned the insider help that five Senators gave Charles Keating and his Lincoln Savings and Loan, in return for contributions and gifts. The deregulation of S&Ls--community banks dedicated to local mortgages (like George Bailey's bank in "It's A Wonderful Life")--enabled slick operators like Keating to make reckless loans in new areas where they had no expertise. The final tab to the taxpayers was $165 billion.

McCain wasn't the worst offender in the scandal. He was included in the Five to make it bipartisan (the other four were Democrats). But he knew Keating, partied with him, made inquiries on his behalf. He once told me that his role in the scandal was harder on him, in some ways, than being a prisoner of war "Because my honor was called into question."

After an experience like that, you might think Senator Honorable would have devoted himself to preventing other such crises--to making sure the Big Wall Street Casino was operating according to rules that wouldn't screw the small investors and, more to the point, the taxpayers. But he walked the anti-regulatory party line, with only occasional exceptions...and tried to lay down a smokescreen of righteousness by campaigning against small potatos like legislative earmarks--money to study the mating habits of, uh, crabs, in, uh, Alaska (proposed by Governor Honorable).

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John McCain, after his political near-death experience, could have made the responsible regulation of markets one of his great causes. He didn't. And today he said, once again, "The fundamentals of our economy are strong." I hope he's right, but it's entirely possible that he knows as much about our economy as Sarah Palin knows about The Bush Doctrine.