Hamilton, Madison, and Jay

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Wednesday, October 15, 2008

Obama -- Still voting present

In today's Wall Street Journal, Peter Wallison takes Obama to task over his claim that he tried to warn people of the impending Fannie/Freddie meltdown:

If Sen. Obama were truly looking for a kind of deregulation that might be responsible for the current financial crisis, he need only look back to 1998, when the Clinton administration ruled that Fannie Mae and Freddie Mac could satisfy their affordable housing obligations by purchasing subprime mortgages. This ultimately made it possible for Fannie and Freddie to add a trillion dollars in junk loans to their balance sheets. This led to their own collapse, and to the development of a market in these mortgages that is the source of the financial crisis we are wrestling with today.

Finally, on the matter of deregulation and the financial crisis, Sen. Obama should consider his own complicity in the failure of Congress to adopt legislation that might have prevented the subprime meltdown.

In the summer of 2005, a bill emerged from the Senate Banking Committee that considerably tightened regulations on Fannie and Freddie, including controls over their capital and their ability to hold portfolios of mortgages or mortgage-backed securities. All the Republicans voted for the bill in committee; all the Democrats voted against it. To get the bill to a vote in the Senate, a few Democratic votes were necessary to limit debate. This was a time for the leadership Sen. Obama says he can offer, but neither he nor any other Democrat stepped forward.

Instead, by his own account, Mr. Obama wrote a letter to the Treasury Secretary, allegedly putting himself on record that subprime loans were dangerous and had to be dealt with. This is revealing; if true, it indicates Sen. Obama knew there was a problem with subprime lending -- but was unwilling to confront his own party by pressing for legislation to control it. As a demonstration of character and leadership capacity, it bears a strong resemblance to something else in Sen. Obama's past: voting present.

When McCain saw that this collapse was imminent, he worked on a piece of legislation to help correct what was coming down the pipe. He put everything on the line, trying to work with Democrats, and failed to get it pushed through. Why? Because Democrats didn't want reform. They were enjoying the wonderful kickbacks that Freddie and Fannie were handing out to them.

Senator Obama -- and the emphasis is on his title -- could have worked with John McCain on this sort of reform, and he didn't. He pulled a UN-esque sort of response by sending a letter to the Treasury Secretary. (A letter, mind you, that the Treasury Secretary hasn't produced yet, and Obama has yet to prove he did send it.) Letters aren't going to correct the mistakes. Action does, and McCain tried it. Obama settled back with his Democrat colleagues -- he refuses to stand up to his party at all; never has and never will -- and let this all go to Hell in a handbasket. In essence, as Mr. Wallison points out, he reverted back to the Illinois mentality of simply voting "present."

Obama likes to talk a good game about his reform credentials, but when we look deeper into the details -- they do say the devil is in the details -- we see that just like his empty rhetoric, his empty record is all he has to offer.

Publius II

1 Comments:

Blogger David M said...

The Thunder Run has linked to this post in the - Web Reconnaissance for 10/17/2008 A short recon of what’s out there that might draw your attention, updated throughout the day...so check back often.

October 17, 2008 at 8:30 AM  

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