What McCain should say on Fixing Financial System

“You know that there’s been tremendous turmoil in our financial markets and Wall St. And it is—people are frightened by these events. Our economy, I think still—the fundamentals of our economy are strong. But these are very, very difficult times.” - John Mccain, September 15, 2008

This is what McCain needs to say: Obama saw the Iraq problems as a political opportunity, blamed Bush and then proposed the wrong answer and made the wrong predictions. Now Obama sees the economic problems we face as a political opportunity. He again blames Bush and then proposes the wrong answers and makes the wrong predictions.

McCain Tried to introduce regulation over Fannie/Freddie back in 2006

FEDERAL HOUSING ENTERPRISE REGULATORY REFORM ACT OF 2005

The United States Senate

May 25, 2006 Section 16

McCain is qouted: "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.

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole."

This strikes me as a pretty big deal. Obama is ridiculing the idea of Mc regulating this mess, and in fact Mc saw the problem in 2006 (maybe earlier).

Meanwhile, O has 2 former CEO of Fannie/Freddie as economic advisors, and is a major recipient of campaign contributions.

What were the Democrats saying?

"These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,’’ said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

McCain needs to get back to COUNTRY FIRST and announce that he intends to put COUNTRY FIRST by having a commission look into this and report within the first 100 days in office. The goal should not be new and more regulations, the goal should be reform and fixing what we have. The fact is that markets go 'too far' sometimes, and often when they do an underlying government incitement is behind it.

If McCain goes for REFORM of Government oversight and not mere 'more, more, more' Govt regulation, we might be better off.

Yes, there was a social contract broken. When fannie mae gives ex-Clinton appointees like Gorelick $50 million and dispenses money to Democrats in Congress and the end result is lack of fannie mae oversight *AND* the taxpayers are stuck with the bill - that is a good case for reform. Remember: Obama brought Fannie Mae ex-CEO Johnson to be his VP vetter. Johnson and the other 'insiders' have been at the Fannie Mae trough.

A commission is a GREAT idea. Why? Because it stops the usual Congressional practice of passing bad laws right away or doing a quick fix ('hey, lets write a check to everyone').

If the Democrats have their way, the guilty parties will be on the commission and will end up indicted the innocent and shooting the wounded. Instead, I suggest some people outside it all. Romney maybe. Or Maybe Mayor Bloomberg of NY. Or Lawrence Lindsay, former Fed member. Someone not part of the mess but who wont be cowed or awed by the financial wizards and who knows enough about the business so they can cut through the cr8p and get to the heart of the problems. There will never be a risk free market and to try to create one may be a cure worse than the disease, otoh, systemic risks should be mitigated.