McCain Has A Keating Problem

The Obama campaign just launched (like minutes ago) a 13+ minute mini-documentary highlighting McCain's involvement in the Keating Five savings and loan scandal. Many people, especially the younger among us, may not remember this scandal, which represented the biggest banking crisis since the Depression, of course, until the last couple of weeks. Obama's campaign is kind enough to bring us this reminder.

One thing should be said from the outset, since McCain's campaign will undoubtedly throw a fit over this (even though they are simultaneously trying to tie Obama to terrorists), and that is that unlike what the McCain campaign has been doing, this is not some distraction from the issues, this is not some petty smear, or a smear at all. The point of this is to highlight the historical context of the current crisis. It is about deregulation, it is about corruption, it is about putting corporations and rich people ahead of what is best for the country. And now more than ever this is all very important, and absolutely germane.

While McCain's cynical attacks (funneled through his new Palin mouthpiece) insult the intelligence of voters by trying to distract them from the real issue (economics, the future of the country, and how we got here), this latest push by Obama serves to actually deepen our discussion of the issues by providing historical context, and making sure we understand how we got into the mess we are currently in. If you can't diagnose the cause of an illness, you certainly can't cure it.

Here's the video, please watch it, and forward it everyone you know:


(Digg the video here)

Here's the summary:

The current economic crisis demands that we understand John McCain's attitudes about economic oversight and corporate influence in federal regulation. Nothing illustrates the danger of his approach more clearly than his central role in the savings and loan scandal of the late '80s and early '90s.

John McCain was accused of improperly aiding his political patron, Charles Keating, chairman of the Lincoln Savings and Loan Association. The bipartisan Senate Ethics Committee launched investigations and formally reprimanded Senator McCain for his role in the scandal -- the first such Senator to receive a major party nomination for president.

At the heart of the scandal was Keating's Lincoln Savings and Loan Association, which took advantage of deregulation in the 1980s to make risky investments with its depositors' money. McCain intervened on behalf of Charles Keating with federal regulators tasked with preventing banking fraud, and championed legislation to delay regulation of the savings and loan industry -- actions that allowed Keating to continue his fraud at an incredible cost to taxpayers.

When the savings and loan industry collapsed, Keating's failed company put taxpayers on the hook for $3.4 billion and more than 20,000 Americans lost their savings. John McCain was reprimanded by the bipartisan Senate Ethics Committee, but the ultimate cost of the crisis to American taxpayers reached more than $120 billion.

The Keating scandal is eerily similar to today's credit crisis, where a lack of regulation and cozy relationships between the financial industry and Congress has allowed banks to make risky loans and profit by bending the rules. And in both cases, John McCain's judgment and values have placed him on the wrong side of history.

Visit the website for more: http://www.keatingeconomics.com/ (Digg the site here)

Update: This is interesting, even though McCain tried to play the good boyscout and confess his sins after the scandal was all over, he apparently now believes he did nothing wrong! So much for learning his lesson and turning "Maverick". And since he apparently hasn't learned his lesson, this whole history exercise is all the more necessary. As George Santayana famously stated: "Those who cannot learn from history are doomed to repeat it."

Update #2: Oh you gotta love this: The lawyer McCain rolled out to push back against the Keating push said just last year:

"I am very sorry to see what's happened to John," Dowd said in an interview. "I don't think his campaign is being well run. It's been over-managed. He blew through $8 1/2 million. It's a difficult thing to leave a friend and go to another friend. But we lost the John McCain I knew."