McCain vs. McCain

By now everyone is familiar with the multiple narratives that John McCain has written for himself. He’s effectively positioned himself as a no-holds-barred corruption fighter. Agree or not with the McCain-Feingold Act it’s clear that McCain’s intent was to remove some of what he considers to be the corrupting influence of money in the political process. It’s arguable that the bill sent money underground to so-called 527 groups that really aren’t accountable to anyone, but that’s really beside the point. McCain really does want to clean up politics.

The other major character trait that McCain promotes about himself is his willingness to put party interests aside and reach across the aisle to engage Democrats for the good of the country. This trait irritates many Republicans because he seems to accept many of the premises set forth by liberal Democrats such as the devout belief that humans are causing global warming. But it’s undeniable that McCain has (much more than Obama) has collaborated with members of the opposing party to sponsor legislation. The aforementioned McCain-Feingold Act along with McCain-Kennedy and McCain-Lieberman bills attest to that fact. John McCain has made it a point to reach out to Democratic voters and tell them “it’s not a party thing, it’s an America thing.”

Ideologically McCain cannot be called a conservative. His brand of politics is a personal one that blends some conservative elements, populist elements and even liberal elements. McCain has not been afraid to play the class warfare card that conservatives despise and often talks about greed in corporate America. American business has had much better friends over the years than John McCain. McCain voted against both Bush tax cuts because he said they disproportionately helped the wealthy. Don’t tell that to the wealthy though because their proportional burden has actually increased since 2002.

But what happens when McCain’s multiple narratives collide?

As we have seen in recent weeks the financial market in America is in the midst of a catastrophe. It’s a very complicated issue and not one that materialized overnight, not even in the last eight years. The seeds of this crisis were planted during the Carter administration signed the Community Reinvestment Act into law. Without getting into too much detail, because others have already reported on this much better than I could, the crisis really began to take shape when, prompted by the Clinton administration, two Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac started to grow dramatically, ultimately controlling about 50% of the U.S. mortgage market. This was a government-protected monopoly that set the pace and tone for the entire mortgage industry.

There were warning signs along the way that many ignored. Articles like this one in the New York Times (1999) and this one (2000) in City Journal attest to that. But Fannie and Freddie had become a major lobby in Washington. A weak regulator was not able to rein them in and when he tried to ask congress for help, some members of the committee responsible for overseeing them browbeat him.

John McCain himself proposed increased regulation on Fannie and Freddie and it was blocked.

In last Friday’s presidential debate, Barack Obama blamed the crisis on conservative ideology of deregulation and eight years of the Bush administration pushing that agenda. There’s only one problem with that point of view. It’s totally backward. As quasi-public institutions conservatives were screaming for more regulation of Fannie and Freddie. This crisis is not a failure of a market economy running wild; it’s a failure of government intervention in what had previously been mainly a private market, combined with too little oversight. While Barack Obama was playing the partisan blame game and getting it wrong, McCain stood there and took the punch and didn’t swing back. The question for many observers was: why?

Fannie and Freddie are probably the most graphic examples of the type of government corruption that John McCain detests. These two GSEs spent fortunes on lobbying and were protected by members of the House and Senate that were supposed to be their watchdogs. The problem for John McCain is that the guilty were almost all Democrats. Democrats like Barney Frank and Senate colleagues of McCain’s like Chris Dodd. Remember McCain is supposed to be the guy who doesn’t take cheap shots at his congressional pals.

John McCain’s narratives that once seemed to peacefully coexist suddenly came into conflict. Would McCain the corruption fighter come out and give Americans some straight talk? Would he explain that Democrats (with the aid of some Republicans) were influenced by big dollar contributions from Freddie and Fannie where executives made multimillion-dollar fortunes as they quietly destroyed the American economy? Would he explain that it was well intended liberal ideology that led to inevitable unintended consequences? Would he explain that conservatives want less regulation in private business but tons of accountability and oversight in the public sector, which is where Fannie and Freddie really resided despite protestations to the contrary? Or would the non-ideological bipartisan McCain win the internal struggle and allow this golden opportunity to set the record straight pass?

Until now it's been the collegial McCain that we've seen and no straight talk about the depth of corruption that exacerbated the crisis.

One blogger suspects that McCain has been holding back while waiting for passage of the bailout bill out of fear of derailing it and that now that’s is been passed that he will finally take Obama to the mat. After all, Franklin Raines, one of Obama’s economic advisers cashed in to the tune of $90 million for his time as Fannie Mae’s CEO.

McCain’s campaign has released one new TV commercial that begins to tackle the issue of placing blame where it rightfully belongs, but to date the candidate has been silent. Sarah Palin has done her part reassuring America of her aptitude and energized the conservative base of the Republican Party. Now it’s McCain’s turn to tell the moderate Americans who are undecided what the true differences would be between a McCain administration and an Obama administration. If McCain the corruption fighter doesn’t start making the corrupt Democrats such as Barney Frank, who aided in the creation of this mess, famous (as he's promised to do with earmark spenders) then the election is lost, and those responsible for this crisis will never be held accountable because nobody will be there to hold their feet to the fire.