Sunday, September 21, 2008

McCain: I’m glad I deregulated Wall Street.

In the wake of last week’s financial meltdown, Sen. John McCain (R-AZ) has been calling for more regulation and criticizing lax oversight of Wall Street, despite the fact that he and former senator Phil Gramm passed much of the deregulatory reforms that led to the current crisis. Interviewed on CBS today, however, McCain said he does not “regret” championing the deregulation of Wall Street:

Q: In 1999, you were one of the senators who helped pass deregulation of Wall Street. Do you regret that now?

McCAIN: No. I think the deregulation was probably helpful to the growth of our economy.

McCain said awhile ago he didn't understand the economy, but this points to early dimentia, don't you think? Reckless deregulation is officially a disaster:

Savings and Loan industry - Keating Five, Lincoln Savings and Loan

Energy industy - Enron

Financial industry - Bear Stearns, Lehman Bros. Fannie & Freddie, Indy Mac

As Josh Marshall over at TPM connects the dots, it appears that McStain’s BFF Phil Gramm successfully lobbied for his client USB to get their bad debts covered by the US taxpayers, too. And this would be McStain’s Secretary of the Treasury?

The White House's bailout plan for Wall St: The government would buy up $700 billion worth of bad loans and raise the national debt ceiling -- with little to no penalties or oversight for the firms who made the loans in the first place.

What seems unfair that there are absolutely no provisions for homeowners. Moreover, this morning on Stephanopulous I saw Hank Paulson talking about homeowners taking out mortgages that were higher than they could afford and about them needing to live up to their obligations.

I find it incredible that he would use language like that while asking taxpayers to send a trillion dollars to Wall Street because investment banks made irresponsible investments and aren't able to live up to their obligations.

In any loan transaction there are at least two parties. If I give my unemployed and uneducated brother-in-law a half a million dollar loan wouldn't I be just as irresponsible giving it as he is taking it? Moreover, a large majority of borrowers did not have financial training to be able to understand complex mortgage terms and risks of the underlying investments. Investment banks have armies of Ph Ds working for them that helps them analyze market risks and credit exposure. They got it wrong too! It strikes me as strange that unsophisticated borrowers are being held to much higher standard than ultra-sophisticated bankers.

This is not going away any time soon, and McStain will be outed as one of the key government facilitators of the greatest theft of US citizen’s money of all time.

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