Obama goes Keating

[Gooberman]

[First part of email cut due to length]....So at noon Eastern on Monday, October 6th, we're releasing a 13-minute documentary about the scandal called \"Keating Economics: John McCain and the Making of a Financial Crisis\" -- it will be available at KeatingEconomics.com, along with background information that every voter should know.

Watch a preview right now and share it with your friends.

The point of the film and the web site is that John McCain still hasn't learned his lesson.

And this time, McCain's bankrupt economic philosophy has put our economy at the brink of collapse and put millions of Americans at risk of losing their homes.

Watch the video to see why John McCain's failed philosophy and poor judgment is a recipe for deepening the crisis:

http://my.barackobama.com/keatingvideo

It's no wonder John McCain would rather spend the last month of this election smearing Barack's character instead of talking about the top priority issue for voters.

But if we work together, we can make sure the focus stays on the economy -- and how to fix it.

Please forward this email to everyone you know.

Thanks,

David

David Plouffe
Campaign Manager
Obama for America

P.S. -- The documentary will be live at noon Eastern on Monday, October 6th at www.KeatingEconomics.com.

http://my.barackobama.com/page/invite/keatingvideo

It's a bit disapointing, I don't think he had too. He's pretty far ahead. I thought if Obama just stood against the ropes the old man would wear himself out.

I assume these guys know more about winning elections then I do.

[dissent]

This is lame in the extreme. McCain was the only Republican of the so-called Keating Five, meaning that the rest of the Keating Five were Democrats.

From the result of the Senate Ethics Committee investigation here

Glenn and McCain: cleared of impropriety but criticized for poor judgment

The Senate Ethics Committee ruled that the involvement of Glenn in the scheme was minimal, and the charges against him were dropped.[44] He was only criticized by the Committee for \"poor judgment.\"[47]

The Ethics Committee ruled that the involvement of McCain in the scheme was also minimal, and he too was cleared of all charges against him.[45][44] McCain was criticized by the Committee for exercising \"poor judgment\" when he met with the federal regulators on Keating's behalf.[8] The report also said that McCain's \"actions were not improper nor attended with gross negligence and did not reach the level of requiring institutional action against him....Senator McCain has violated no law of the United States or specific Rule of the United States Senate.\"[48] On his Keating Five experience, McCain has said: \"The appearance of it was wrong. It's a wrong appearance when a group of senators appear in a meeting with a group of regulators, because it conveys the impression of undue and improper influence. And it was the wrong thing to do.\"[8]

Regardless of the level of their involvement, both senators were greatly affected by it. McCain would write in 2002 that attending the two April 1987 meetings was \"the worst mistake of my life\".[49] Glenn has described the Senate Ethics Committee investigation as the low point of his life.[9]

This video
a) gives us NO information at all about the Keating matter at all, except to point out McCain's association with it,
b) completely fails to mention anything about the overwhelming involvement of Democrats in the scandal, and
c)implies a simplistic connection between the circumstances of the S&L crisis to the current situation in the financial markets, without any evidence linking the two. I think that, once again, it's clear why they do this - because Democrats are once again hip-deep in the reasons that this current financial crisis has occurred. But they are scrambling desperately to assign all blame to the Republicans before the public has a chance to get wise.

This from the guy who was going to bring us the new politics.

HAH. Phooey.

edit: oh, and if you want to read something with a little more context on Keating, read this.

Thanks for posting this Goob. It tells me a lot more now about Obama's character.

Agent of change. ROFLMAO !

[Will Robinson]

I'm glad he did it because if a bunch of Congressmen beating up on regulators is a bad thing then surely the congressmen who beat up on the regulator who tried to warn them about the fraud taking place at Freddie Mac and Fanny Mae will be looked at as a bad thing also...won't it?

I would expect Obama won't mind if we broaden the focus on this kind of abuse of power to flash forward about 20 years to the current day and look at his democrat collegues beating up on a regulator who tried to get them, the democrats, to stop the illegal activity that is tanking the economy right now!
And let's look at Congressmen Barney Frank who is in charge of the commitee overseeing the regulation and has a boyfriend who stands to profit from the refusal of those democrats to act when the regulator warns them of the problem.

Oh, that's right...it doesn't count because they were democrats who were doing it and they are still in power today and a few of the executives that were responsible for the illegal bookkeeping so they could receive millions of dollars from Fannie and Freddie were working for or with Obama recently.

John McCain should be in front of the camera saying 'Go ahead, make my day!' He needs to shove it in the face of the media who is trying so hard to allow the democrats to steal this election and force them to report on it.
I don't know if he has it in him to get dirty like that but the public deserves someone who wouldn't be afraid to to stand up and call bullfeces on the hypocrisy and lack of objectivity in the media.

[Spidey]

According to tc, McCain will go ballistic and try to start a war with the media, and or the Democrats.

[Tunnelcat]

He's already starting to look angry in his campaign stump speeches!

[Dakatsu]

This is lame in the extreme. McCain was the only Republican of the so-called Keating Five, meaning that the rest of the Keating Five were Democrats.

Doesn't matter that they were democrats, but that they were politicians. Just because McCain isn't a democrat doesn't mean he had nothing to do with it.

This video
a) gives us NO information at all about the Keating matter at all, except to point out McCain's association with it,

Which was the point of the video, to point out Obama's rival, John McCain, being in the mess.

b) completely fails to mention anything about the overwhelming involvement of Democrats in the scandal

Just because there were democrats in it doesn't excuse McCain, as I said above.

c)implies a simplistic connection between the circumstances of the S&L crisis to the current situation in the financial markets, without any evidence linking the two.

Actually, the link was that both were caused by a massive amount of deregulation proposed by John McCain, and that Keating (the person) influenced McCain's descisions to deregulate.

And a response to Will, once again, is that it doesn't matter that they were democrats. They might go to the same convention every four years, but just because he was a democrat and they were democrats doesn't link them together. Lincoln Chaffee may of been a republican, but it doesn't mean he was in bed with all the republcans there. Same concept with Joseph Lieberman, who wasn't friends with every democrat in congress. It's like saying because a classmate of yours cheats on tests, you must cheat as well, because you were in the same class!

[CUDA]

Just because McCain isn't a democrat doesn't mean he had nothing to do with it.

Just because there were democrats in it doesn't excuse McCain, as I said above.

McCain was acquitted. that says he had nothing to do with it.

The Ethics Committee ruled that the involvement of McCain in the scheme was also minimal, and he too was cleared of all charges against him. McCain was criticized by the Committee for exercising "poor judgment" when he met with the federal regulators on Keating's behalf. The report also said that McCain's "actions were not improper nor attended with gross negligence and did not reach the level of requiring institutional action against him....Senator McCain has violated no law of the United States or specific Rule of the United States Senate."

FACTS try learning some

[Dakatsu]

He was criticized for exerting poor judgement, an argument often brought up against Obama. A democrat was also found not guilty, but I assume he was because he was a democrat

[Will Robinson]

And a response to Will, once again, is that it doesn't matter that they were democrats. They might go to the same convention every four years, but just because he was a democrat and they were democrats doesn't link them together....

In my example the regulator warned we were about to have the current crisis that we now have! The democrats bullied and abused the regulator who was testifying...even accused him of being a racist for bringing up the subject because one of the guys he was exposing for fraud was black! that guy took his 90 million dollar bonus he got by forging reports and cooking the books and went on to advise Obama on...that's right... mortgage and finance!!! so hell yes it's relevant!!

The current media push by Obama is that McCain is for deregulation and therefore the current crisis is his fault! Even you have suggested it just now!

The truth is, there was regulation and it was blocked, ignored and ridiculed by democrats and it was being promoted by republicans! The republicans were even suggesting more regulation!! McCain was asking for more regulation!
It's all in the hearings for anyone to see so you go on and try to pass it off as something it isn't if you must but you're only fooling yourself!

Obama isn't winning this election on his merit or ability, he's winning it on affirmative action...the media is playing the part of the O.J. jury when he got away with murder.
Journalism is dead.

[Spidey]

May it rest in peace.

[dissent]

Doesn't matter …

Well, I’m not a tax attorney, but my cursory research leads me to say -

FAIL !!

Let’s take these in reverse order:

Actually, the link was that both were caused by a massive amount of deregulation proposed by John McCain, and that Keating (the person) influenced McCain's descisions to deregulate.

Well, if you start from wiki …..
From Savings and loan crisis, one of the causes was the -

Causes

Tax Reform Act of 1986

By enacting 26 U.S.C. § 469 (relating to limitations on deductions for passive activity losses and limitations on passive activity credits) to remove many tax shelters, especially for real estate investments, the Tax Reform Act of 1986 significantly decreased the value of many such investments which had been held more for their tax-advantaged status than for their inherent profitability. This contributed to the end of the real estate boom of the early to mid '80s and facilitated the Savings and Loan crisis. Prior to 1986, much real estate investment was done by passive investors. It was common for syndicates of investors to pool their resources in order to invest in property, commercial or residential. They would then hire management companies to run the operation. TRA 86 reduced the value of these investments by limiting the extent to which losses associated with them could be deducted from the investor's gross income. This, in turn, encouraged the holders of loss-generating properties to try and unload them, which contributed further to the problem of sinking real estate values. This turmoil and repositioning in real estate markets was caused not by changes in market conditions.

But apparently this legislation was not a Republican sponsored bill …

The U.S. Congress passed the Tax Reform Act (TRA) of 1986, (Pub. L. 99-514, 100 Stat. 2085, enacted 1986-10-22) to simplify the income tax code, broaden the tax base and eliminate many tax shelters and other preferences. Although often referred to as the second of the two "Reagan tax cuts" (the Kemp-Roth Tax Cut of 1981 being the first), the bill was actually officially sponsored by Democrats, Richard Gephardt of Missouri in the House of Representatives and Bill Bradley of New Jersey in the Senate.

From here.

Well, the wikis don’t have a great deal of source citations, so let’s look elsewhere.
Timelines of the S&L Crisis can be found at erisk and at the fdic website.

One problem was that regulation intended to help the S&L sector in the 1960s had put a ceiling on the interest rate that S&Ls could offer to depositors. This measure succeeded for a while in dampening competition for depositor funds between banks and S&Ls. But as new money market funds began to compete fiercely during the 1970s for depositors' money by offering interest rates set by the market, S&Ls suffered significant withdrawal of deposits during periods of high interest rates - a process known as disintermediation.

The biggest problem, though, was more fundamental. When S&Ls tried to compete for funds by offering relatively high rates or - after deposit interest rate ceilings were eliminated between 1980 and 1982 - by offering interest rates in line with or above market rates, an unsustainable gap opened up between the cost of their funding liabilities (short-term interest rates) and the income generated by their assets (long-term, fixed-rate mortgage repayments).

Worse, as interest rates moved higher, the economic value of existing S&L portfolios of long-term, low interest rate residential mortgages moved sharply lower, threatening institutions with insolvency.

The trigger for the closing shut of this asset/liability trap was the shock rise in oil prices in 1979, pushing up inflation and headline interest rates around the world. By 1980, with interest rates on US government debt hitting 16%, many S&Ls had already been fatally wounded.

1980-1982 Statutory and regulatory changes give the S&L industry new powers in the hopes of their entering new areas of business and subsequently returning to profitability. For the first time, the government approves measures intended to increase S&L profits as opposed to promoting housing and homeownership.

March, 1980--Depository Institutions Deregulation and Monetary Control Act (DIDMCA) enacted. The law is a Carter Administration initiative aimed at eliminating many of the distinctions among different types of depository institutions and ultimately removing interest rate ceiling on deposit accounts. Authority for federal S&Ls to make ADC (acquisition, development, construction) loans is expanded. Deposit insurance limit raised to $100,000 from $40,000. This last provision is added without debate.

November, 1980--Federal Home Loan Bank Board reduces net worth requirement for insured S&Ls from 5 to 4 percent of total deposits. Bank Board also removes limits on the amounts of brokered deposits an S&L can hold.

August, 1981--Tax Reform Act of 1981 enacted. Provides powerful tax incentives for real-estate investment by individuals. This legislation helps create a "boom" in real estate and contributes to over-building.

September, 1981--Federal Home Loan Bank Board permits troubled S&Ls to issue "income capital certificates" that are purchased by FSLIC and included as capital. Rather than showing that an institution is insolvent, the certificates make it appear solvent.

…

July, 1985--Chairman Gray begins transfer of federal examiners to the twelve regional Federal Home Loan Banks so that they are no longer overseen by OMB and their salaries are paid directly by the Bank Board system.

August, 1985--Only $4.6 billion in FSLIC insurance fund. Chairman Gray tries to gain support for recapitalizing FSLIC on Capitol Hill. In 1986, GAO estimates the loss to the insurance fund to be around $20 billion.

…

1989--President Bush unveils S&L bailout plan in February. In August, Financial Institutions Reform Recovery and Enforcement Act (FIRREA). FIRREA abolishes the Federal Home Loan Bank Board and FSLIC, switches S&L regulation to newly created Office of Thrift Supervision. Deposit insurance function shifted to the FDIC. A new entity, the Resolution Trust Corporation is created to resolve the insolvent S&Ls.

Other major provisions of FIRREA include: $50 billion of new borrowing authority, with most financed from general revenues and the industry; meaningful net worth requirements and regulation by the OTS and FDIC; allocation funds to the Justice Department to help finance prosecution of S&L crimes. Additional bank crime legislation the next year (i.e., the Crime Control Act of 1990) mandates a study by the National Commission on Financial Institution Reform, Recovery and Enforcement to uncover the causes of the S&L crisis, and come up with recommendations to prevent future debacles.

It pretty obvious that the S&L situation was a lot more complicated than just deregulation, as there were plenty of other regulations still on the books.

OK, Dak, now that I’ve pointed you to some actual sources, please tell me where you found the information that " both were caused by a massive amount of deregulation proposed by John McCain". I’m sure this would be news to just about everybody..


Next –

Just because there were democrats in it doesn't excuse McCain ...

Apparently you did not take the time to read and understand the last link from my earlier post (the one from azcentral.com). Please go back and read it again. McCain involvement was found to be peripheral to the much more substantial involvement of the Democratic senators (excepting Glenn), especially DeConcini and Cranston. If you’d like another source from a few years back, try this one -

From a 2000 Slate article -

In February 1991, the Senate Ethics Committee found McCain and Glenn to be the least blameworthy of the five senators. (McCain and Glenn attended the meetings but did nothing else to influence the regulators.) McCain was guilty of nothing more than "poor judgment," the committee said, and declared his actions were not "improper nor attended with gross negligence." McCain considered the committee's judgment to be "full exoneration," and he contributed $112,000 (the amount raised for him by Keating) to the U.S. Treasury.

(emphasis mine)


Furthermore, it’s more than a little naïve of you to exclude to party affiliation from this discussion. Perhaps you should share your wisdom with Senator Obama, since it has been a touchstone of Obama’s strategy throughout the campaign to try to link McCain hand-in-glove with "the failed policies of George W. Bush and the Republicans". The Democrats are clearly trying to paint the Republicans as corrupt in general, and that all the electorate needs to do is sweep the Democrats into power in order to initiate a Golden Age of wisdom and prosperity, sweet flowers and pretty butterflies.

Of course, this completely ignores the fact that Democrats are as responsible for this mess as Republicans.

[Spidey]

Heh, you guys really do your homework, all I have on this one is my opinion.

I don’t see the wisdom of bringing up a situation where 5 people are accused of Wall Street manipulation (for lack of a more precise term), 4 of them being Democrats, when at the same time you are trying to blame the entire thing on Republicans. Especially if the guy you are trying to smear was acquitted. It doesn’t make sense to me, but then I’m not the average dumb voter either.

[Gooberman]

Heh, you guys really do your homework....

No kidding.

.....but then I’m not the average dumb voter either.

Let me just re-iterate that I thought this was Obama overplaying his economy-crisis hand. That being said, and I mean no disrespect, but if conservatives need the general electorate to educate themselves on portions of the "Tax Reform Act of 1986" in order to defend their cause.....well.....good luck with that!!

[Spidey]

Actually Goob, according to The News Hour, that 13 min. ad is a direct response to Palin’s guilt by association attacks, therefore being an attempt to smear McCain’s character, and not a crisis ad. But the net effect is to remind people that Democrats are hip deep in all the BS that goes on in Washington, an undesirable side effect.

But I will concede the “Dakatsu affect”.

[Dakatsu]

I will read some of the articles posted and reply later (in fact, yell at me later if I don't), but I would like to say from the beginning I knew McCain was only cited for poor judgement, and although I believe the three convicted for sure are corrupt bastards, I think McCain's poor judgement is not needed in this country, and I think it is less than the claims the McCain camp pulls out to show that it is Obama with poor judgement. Skimming, deregulation was not the sole cause of this, but one of the many causes, and McCain's want for it doesn't allow me to trust him on the economy.

Remember, you can PM me, or even post a topic, so if I don't read and reply to those say... in two days or less, tell me out for being a coward

But I will concede the “Dakatsu affect”.

...what would that be?

[TechPro]

I remember those Reagan years when those guys were working on \"Tax Code Reform\" (now usually referred to as de-regulation even though the tax code reform was only a part of it) and at the time there was a LOT concern and distaste in the public for the the tax codes of the time. Those two guys who sponsered that tax code reform act of 1986 were heralded almost as heros (at the time) because they'd had the guts to stand up to the politicians and try to make substantive improvements (and slimming) of the tax codes and actually got some good work done.

What many people didn't expect was what some of the \"side effects\" would be. Now those guys are nearly despised as having made a real mess of things. Maybe they did, maybe they didn't. I don't know (no tax code authoritive knowledge in this head).

Two things came about from the tax code reforms and the de-regulation: 1) Improved opportunity for prosperity which ALL of us currently enjoy at least a little and 2) more financial risk in the money markets.

So what REALLY caused the problem? Poor to non-existent oversight that should have been there but wasn't. That's where the REAL crime is and that's where we should be pointing the blame.

[Dakatsu]

OK, Dak, now that I’ve pointed you to some actual sources, please tell me where you found the information that " both were caused by a massive amount of deregulation proposed by John McCain". I’m sure this would be news to just about everybody..

I concede that the Keating issue wasn't caused by deregulation (just corruption), but a major cause for today's market problems is lack of regulation and oversight. McCain picked up these views from talking with Keating, and since has promoted it (he may not of sponsored a bill, but he speaks for deregulation in general).

[dissent]

I concede that the Keating issue wasn't caused by deregulation (just corruption), but a major cause for today's market problems is lack of regulation and oversight. McCain picked up these views from talking with Keating, and since has promoted it (he may not of sponsored a bill, but he speaks for deregulation in general).

Still FAIL !!. Keating was trying to trade on his influence with lawmakers. Keating's issue wasn't to deregulate, but to have the regulators leave him alone. McCain only became involved because both he and DeConcini were the Senators from Arizona. If you have anything at all that says McCain "picked up" deregulation views from Charles Keating, then please post it.

Furthermore, I suggest you visit the Banking crisis thread and read over the numerous posts there. We all agree that lack of regulation was a problem with the current financial crisis. But McCain wasn't guilty of leading the charge for deregulation there. McCain was sponsor of a 2005 bill that would have increased regulation of Fannie Mae and Freddie Mac
http://www.govtrack.us/congress/record. ... l=s109-190

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.

(emphasis mine)

However, this legislation went nowhere fast, and it got there because Democrats stonewalled it. See Will's and my posts (and probably others). They stonewalled it because the whole Fannie/Freddie mess had become a huge piggy bank of contributions for a lot of Democrats. The Dems made sure that Fannie and Freddie kept growing and expanding, thereby ensuring Fannie and Freddie jobs and bonuses, and the Fannie and Freddie folks kept the money flowing into the political coffers.

Neat trick; until the fat lady sang.

Read this from the WSJ