Wednesday, September 24, 2008

Bail Out Deregulation Trainwreck Expressed

Americans Blame Financial Crisis On ‘Lack Of Regulation,’ While McCain Says People ‘Don’t Want Regulation’:

In an interview on Tuesday with WCAU in Philadelphia, Sen. John McCain (R-AZ) backed away from his Sept. 16 claim that he believes in “excess government regulation,” saying that Americans actually want deregulation:

WELKER: It sounds like you’re calling for more regulation. Yet throughout your career you’ve advocated deregulation. Do you now see that as a failed economic policy — deregulation?

MCCAIN: Oh no. People don’t want regulation. They want to live as freely as they can. It’s smart regulation. Look, I’ve called for fixing Fannie and Freddie a long time ago.

A new LA Times/Bloomberg poll doesn’t bear McCain’s claims out, however. It finds that Americans are actually blaming the financial crisis on a lack of government regulation...

McCain’s Embrace Of Wall Street Regulation Exposes Health Care Hypocrisy

McCain Banks On Deregulation:

In the latest edition of American Academy of Actuaries, Sen. John McCain (R-AZ) makes his case for “deregulating the health insurance industry by extolling the benefits of the last decade of deregulation in the banking sector:

[Individuals] need to be in charge of their health care dollars… I would also allow individuals to choose to purchase health insurance across state lines…Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.

In fact, deregulation of the banking industry “offers a cautionary tale about a little-understood provision at the center of John McCain’s health care plan.”

Following a pair of Supreme Court decisions which deregulated the banking industry, credit card companies relocated to states with no interest rate caps and charged “what they wanted” to borrowers in states with interest rate limits. This deregulated environment allows credit card companies to “use pricing practices, like teaser rates, to attract cash-strapped families and then… double or triple those rates without notice.”

SEC Chairman Christopher Cox Finally Realizes The Problem With Deregulation:

Yesterday, the Senate Banking Committee held a hearing on the Bush administration’s proposed $700 billion bailout plan. During the hearing, Christopher Cox, Chairman of the Securities and Exchange Commission (SEC), testified that deregulation was a cause of the current financial crisis, including a “regulatory hole” in the credit swap market:

There is another similar regulatory hole that must be immediately addressed to avoid similar consequences. The $58 trillion national market in credit default swaps — double the amount outstanding in 2006 — is regulated by no one. Neither the SEC nor any regulator has authority over the CDS market, even to require minimal disclosure to the market.

It’s rather ironic that Cox is now calling for regulation of the credit swap market. After all, trading in the credit swap market was what sunk insurance giant AIG. Once AIG had “sold large quantities of credit-default swaps to financial institutions around the world,” it required an $85 billion federal bailout to keep its failure from affecting the wider financial system.

But its not just on credit swaps that Cox has come around. He also blamed the the Gramm-Leach-Bliley Act - which was constructed by former Sen. Phil Gramm (R-TX) in 1999 and deregulated the banking industry - for contributing to the financial meltdown. He said that “the failure of the Gramm-Leach-Bliley Act to give regulatory authority over investment bank holding companies to any agency of government was, based on the experience of the last several months, a costly mistake.”

Just six months ago the Bush administration found the credit crisis so manageable that it “unveiled a widely discussed blueprint for U.S. financial regulatory reform that called for less supervision of Wall Street by the Securities and Exchange Commission.”

FLASHBACK: Six Months Ago, Paulson Said ‘Our Banks And Investment Banks Are Strong’

h/t: This Modern World


McCain is suspending campaign (whatever that means) and going to Washington so he can have pictures taken of him looking like he's doing something. Asks that Obama do the same, and wants Friday's debate to be postponed, because he can't possibly do 2 things at once.

Reaction to McCain's political stunt:
So apparently, McCain no longer thinks the fundamentals of our economy are strong. So now he's "suspending his campaign". What are people saying about this desperation stunt?

Reid Tells McCain to Stay Away:

Senate Majority Leader Harry Reid thinks John McCain should keep campaigning and show up for the scheduled debate Friday instead of offering his financial expertise - honed in the Keating 5 scandal - to the Senate he has so assiduously avoided the past six months:

...I understand that the candidates are putting together a joint statement at Senator Obama’s suggestion. But it would not be helpful at this time to have them come back during these negotiations and risk injecting presidential politics into this process or distract important talks about the future of our nation’s economy. If that changes, we will call upon them. We need leadership; not a campaign photo op.

If there were ever a time for both candidates to hold a debate before the American people about this serious challenge, it is now.

McCain Comments On Involvement In Keating Five: ‘It Was A Very Unhappy Period In My Life’

Welcome Back, John McCain!

The prodigal son returns. John McCain has announced that America is finally confronting a crisis that he doesn't feel he can be absent for.

Some fun facts about John McCain: Of all Senators, John McCain has been the most absent. There have been 643 votes taken in the current Senate session: McCain has missed 412 of them.

McCain has not voted in the Senate since April 8th. Since March, he has missed 109 of the last 110 votes.

He missed votes on the GI Bill, energy policy, and in 2007 he missed "all 15 critical environmental votes in the Senate" -- giving him a 2007 rating of 0% from the League of Conservation Voters.

A Bush In the Rose Garden, August 31, 2007

The recent disturbances in the sub-prime mortgage industry are modest -- they're modest in relation to the size of our economy. But if you're a family -- if your family is one of those having trouble making the monthly payments, this problem doesn't seem modest at all. I understand these concerns, and therefore, I've made this a top priority to help our homeowners navigate these financial challenges, so that many families as possible can stay in their homes. That's what we've been working on, a plan to help homeowners.

We've got a role, the government has got a role to play -- but it is limited. A federal bailout of lenders would only encourage a recurrence of the problem. It's not the government's job to bail out speculators, or those who made the decision to buy a home they knew they could never afford. Yet there are many American homeowners who could get through this difficult time with a little flexibility from their lenders, or a little help from their government. So I strongly urge lenders to work with homeowners to adjust their mortgages. I believe lenders have a responsibility to help these good people to renegotiate so they can stay in their home. And today I'm going to outline a variety of steps at the federal level to help American families keep their homes.

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