Hoover 2008: McCain backed legislation decriminalizing Wall Street's reckless conduct: The Nation

"Hoover, 2008"

by Robert Scheer:

"For years, John McCain backed legislation that decriminalized Wall Street's reckless conduct. No amount of New Deal posturing in tonight's debate can hide that record."

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"Yes, McCain finally gets it: "I will not play along with the same Washington games and gimmicks that got us into this terrible mess in the first place. I am going to Washington to fight for you." I didn't check whether this performance made it into the "Moment of Zen" in The Daily Show With Jon Stewart, but it should have. "I am going to Washington" is a classic proclamation of stupidity that assumes the rest of us are unaware of where McCain has been these past three decades.

The "gimmicks that got us into this terrible mess in the first place" were made legal by the passage of radical deregulatory legislation that McCain, as much as anyone in Washington, enthusiastically supported. Those gimmicks--hybrid instruments, credit swaps and so on--were codified in laws pushed through Congress by Phil Gramm, the man McCain esteemed so highly that he chaired the then-senator's 1996 presidential campaign and then chose Gramm to co-chair his 2008 run for the White House.

No one in Washington had a clearer warning of the dangers of those games and gimmicks than McCain, who, as one of the Keating Five, ran interference for the savings-and-loan swindlers of an earlier era.

But McCain did not personally share in the financial misfortune of those who lost their life savings in the S&L meltdown; his wife, Cindy McCain, had an inside track with Charles Keating and made more than a million bucks participating in Keating's swindles before the financier was dispatched to prison.

Instead of learning the harsh lessons of the S&L debacle, McCain plunged ahead, crusading for even more extreme deregulatory measures that dismantled the financial safeguards FDR had put in place to prevent another Great Depression.

McCain, as much as anyone, is responsible for the decriminalization of the reckless conduct that he now attributes to Wall Street: "We will learn from this crisis to prevent the next one, with much stricter oversight.

No more wild over-leveraging, no more liabilities concealed from the public and from shareholders, no more bundling of assets to maximize profit by assuming insane risks. Those days are over on Wall Street.

With new rules of public disclosure and accounting, my reforms will make certain those betrayals of shareholders and the public trust are never repeated."

Why not begin with a reversal of the Commodity Futures Modernization Act, which Gramm sneaked into an omnibus bill only hours before Congress adjourned for the 2000 Christmas recess, codifying "Legal Certainty for Swap Agreements"? Or that act's Title IV, which explicitly exempted from regulation the new gimmicks (which McCain now condemns) by..."

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<http://www.thenation.com/doc/20081027/scheer>