- The Washington Times - Thursday, October 2, 2008

COMMENTARY:

I believe John McCain won the foreign policy debate hands down, but he was unimpressive on economic issues, which, in fairness, were not supposed to be the subject of the first debate. But he can redeem himself in the next debate. Thankfully, Barack Obama is exceedingly vulnerable here, even more so than on foreign policy, which is a mouthful.

Mr. McCain must attack Mr. Obama’s class-warfare assertion that every economic problem we face, including, preposterously, the financial crisis, is a result of the Bush tax cuts. If Mr. McCain’s going to be a supply-sider, he must begin talking like one. He must also steer far away from the silly populist line that the free market is somehow to blame for the crisis. Leave such blasphemy to the Obama Democrats.

But Mr. McCain’s first order of business must be to address the financial crisis head-on - instead of in generalities, as both he and Mr. Obama did in Round 1.


Mr. McCain should not consider this a problem but a softball served up by recent history and the comparative behavior of the two political parties and the two presidential candidates - a softball he must knock out of the park. If Mr. McCain is willing to hit Mr. Obama in the gut with the full truth about the genesis of the crisis, he could emerge from the next debate as the clear favorite.

Mr. McCain’s opportunity here is even richer when you consider that on this matter, despite his scant political record, Mr. Obama has very dirty hands. He cannot be allowed to pretend to have been a bystander when it’s incontrovertible that the policies leading to this crisis were vintage Barack Obama. Those who caused it are Mr. Obama’s political allies and close friends.

Mr. McCain cannot sit idly by as Mr. Obama attempts to shift blame onto corporate America, capitalism itself, Republicans and the Bush administration. He can’t allow the mindless mantra of moral equivalence (“each party shares equal responsibility”) to stand: - not that Mr. Obama would even consider that much of a concession. Mr. McCain must take the gloves off - as he did after Mr. Obama made the mistake of showing his nasty, haughty and condescending side in the first debate - and place the blame for this mess squarely at the Democrats’ and Mr. Obama’s door.

As you’ve surely heard by now, much of the ammunition he needs is contained in a well-done YouTube video showing the congressional Republicans’ efforts in 2004 to rein in Freddie and Fannie and the Democrats thwarting those efforts.

The Office of Federal Housing Enterprise Oversight determined in 2004 that Fannie Mae’s management engaged in a pervasive misapplication of its accounting rules. In 1998, Fannie deferred $200 million of estimated expenses to create the illusion of profit to justify enormous bonuses to management. The regulators cited Fannie’s management for smoothing out swings in its earnings, presumably to deceive investors into believing Fannie was a low-risk company. Regulators also condemned “a culture and environment that made these problems possible.” Fannie CEO Franklin Raines, a bosom buddy of Mr. Obama’s whose dirty hands were all over this scandal, was forced to return millions of dollars for his “alleged” responsibility for the improper accounting practices.

Both Federal Reserve Chairman Alan Greenspan and Treasury Secretary John Snow called for tougher oversight of Fannie and Freddie as early as 2004 because the magnitude of Fannie’s operations coupled with their serious financial difficulties could put the nation’s financial system at risk.

Republicans in Congress pushed for remedial action based on those warnings, but the very Democrats pointing fingers today at President Bush, Republicans and capitalism openly, vehemently and nastily opposed their noble efforts.

The always-sanctimonious Barney Frank said: “These two entities - Fannie Mae and Freddie Mac - are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies the less we will see in terms of affordable housing.”

Watch the YouTube video and see Mr. Frank, Maxine Waters, Gregory Meeks, Lacy Clay and Franklin Raines himself denying there was a problem and bludgeoning Republicans and regulators for trying to solve it. In exchange, the Democrats’ corrupt gravy train - political contributions in exchange for CEO bonuses - continued unabated.

After highlighting all this and pinning the financial-crisis tail squarely on the “donkey,” Mr. McCain must then proceed, unabashedly, to tie Mr. Obama to the Association of Community Organizations for Reform Now, Mr. Obama’s socialist community organization of choice. Mr. McCain must detail ACORN’s complicity in creating this crisis when it forced an epidemic of politically correct, but woefully uncreditworthy loans. And he must show how until the very end, unrepentant and unaccountable Democrats tried to funnel 20 percent of the originally proposed $700 billion of “bailout” money to ACORN and its cousins.

Time for some straight talk, senator. And please, don’t hold back.

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