Fab Five Freddie Told Me Everybody's Fly

David Weigel | October 6, 2008

Maybe somebody convinced John McCain* that while voters are fretting about the economy, he should... actually talk about Obama's economic policies. Mark Halperin has the speech:

This crisis started in our housing market in the form of subprime loans that were pushed on people who could not afford them. Bad mortgages were being backed by Fannie Mae and Freddie Mac, and it was only a matter of time before a contagion of unsustainable debt began to spread. This corruption was encouraged by Democrats in Congress, and abetted by Senator Obama.

Senator Obama has accused me of opposing regulation to avert this crisis. I guess he believes if a lie is big enough and repeated often enough it will be believed. But the truth is I was the one who called at the time for tighter restrictions on Fannie Mae and Freddie Mac that could have helped prevent this crisis from happening in the first place.

Senator Obama was silent on the regulation of Fannie Mae and Freddie Mac, and his Democratic allies in Congress opposed every effort to rein them in. As recently as September of last year he said that subprime loans had been, quote, “a good idea.” Well, Senator Obama, that “good idea” has now plunged this country into the worst financial crisis since the Great Depression.

Up to now McCain has handled this issue terribly. He's allowed Obama to turn McCain's Fannie/Freddie-connected advisors into a liability bigger than Obama's own homeownership philosophy—one that basically excuses and agrees with the goals of the GSEs, pre-meltdown. He tried to "lead" on the issue with his campaign suspension stunt, which made his campaign take on water faster than the Lusitania.

Tonally I don't know if the attack works. As with everything McCain, the issue is framed more as a matter of honor (Obama has none! I've got tons!) than understanding of the problem. But there's some understanding here. More importantly, there's the understanding that McCain has to provide answers on the crisis or he'll get crushed in 30 days.

*Not Sarah Palin, though.

UPDATE: I just tuned into a McCain campaign press call on the speech, led by Wisconsin Rep. Paul Ryan (R), who insisted that "all roads lead back to Freddie Mac and Fannie Mae" and that McCain had wanted to regulate them while Obama proposed nothing. He also credited McCain with improving the bailout bill. "He not only gave us political support, he gave us moral support, so we were able to add taxpayer protections," Ryan said. "This bill passed after we made it substantially better."

Obama, on the other hand: "He was not doing anything until the votes were not there the first time. We're seeing some of the implications of that today" as the market crashes.