Baseball Crank
Covering the Front and Back Pages of the Newspaper
October 6, 2008
POLITICS: It Is Brung

McCain, after two weeks of unwisely pulling his punches while Congress worked on the bailout package and his opponent made partisan hay instead of phone calls, is now going for the jugular. Quite possibly too late, but really, when there is one overwhelming issue in an election, and you were right about it and your opponent was wrong, and he was in bed with the people who had an interest in him being wrong, it is advisable to point that out. Let's hope he pounds this theme home tomorrow night.

I'm sure the response will be the usual chorus of claims that Obama's time in the U.S. Senate was a long time ago, doesn't matter, etc., etc., etc.

Oh, and by the way: this is just hilariously off-message.

PS: What are the two biggest decisions of Obama's short Senate career? This and the surge in Iraq. He was wrong on both, and McCain was right on both.

UPDATE: Video below the fold. After all his delay, McCain is relishing this line of attack:

Posted by Baseball Crank at 2:21 PM | Politics 2008 | Comments (15) | TrackBack (0)
Comments

About.
Time.

I was already voting for only half the ticket, but it was pushing my patience to even acknowledge his presence at the top. Let's see if he truly "names names" in debates and takes it to Bambi.

Posted by: RW at October 6, 2008 3:13 PM

Hopefully, McCain will name the Freddie and Fannie execs that are funding Obama. Bring up their names and make a clear, on the spot accusation.

Obama will try to do the same; name someone who has profited in these last few years who is backing McCain.


Get it all out.

But they won't. Neither side. Each will try to pussy foot and insinuate because they both have dirt.

Posted by: Zufall at October 6, 2008 3:15 PM

RW - I do not see the downside in doing this. The sad part is that he was pulling his punches while they were voting on the bailout bill, and may have lost too much time as a result.

Zufall - Well, McCain already ran ads naming Jim Johnson and Frank Raines, two of the biggest power brokers in Democratic politics.

Posted by: Crank at October 6, 2008 3:18 PM

My question is this: who do the voters blame??
Even if McCain can successfully persuade voters as to Obama's ties to Freddie and Fannie, do the voters believe that those institutions were -primarily- responsible for the credit crisis? If the voters blame the Wall Street banks, then it won't matter.

Posted by: MVH at October 6, 2008 3:44 PM

McCain, of course, has a Rick Davis problem on this front...the lobbyist working against regulation of Fannie and Freddie...who's lobbying company is still on the payroll...people in glass houses...

This is not a winner for McCain...McCain needs to change the subject...

And is it now, then, time to play the Blame Game?

America knows unregulated practices is what got us here on credit default swaps...and the polls are showing it big time...

So keep talking about it...go ahead...

Posted by: AstrosFan at October 6, 2008 6:48 PM

AstrosFan, if you go beyond the superficial you can see the difference between what McCain did and what Obama did, on a policy basis - Obama's status as the single largest recipient of Fan/Fred cash just underlines the question of why his policy judgment was so bad. His ties to the CEOs - tabbing Johnson (and, if you believe what Raines told the WaPo, Raines himself) as advisers/veep vetters is a much bigger deal than hiring a campaign consultant who used to work as a lobbyist and whose former firm is still on the payroll. (Anyway, I don't blame anybody, even lobbyists, for drawing a paycheck from anyone in private business or the GSEs. I do blame Senators for making bad decisions, especially when it's to pander to contributors and their ideological base).

Look, I know you guys are going to celebrate the fact that the truth may be arriving too late to move the polls. But you know, the truth is always worth an argument. There's little doubt that if Congress had followed McCain instead of Obama on this one, we'd be facing a much more tractable problem now. Even the NYT can't entirely hide from that fact.

I don't buy that the CDS market is the problem. CDS, in and of themselves, are just a neutral tool for trading risk.

Posted by: Crank at October 6, 2008 7:10 PM

Well, McCain already ran ads naming Jim Johnson and Frank Raines, two of the biggest power brokers in Democratic politics.

Where?

McCain needs to use this in a face to face with Obama. Otherwise he's leaving bullets (blanks?) in the holster.

Posted by: Zufall at October 6, 2008 8:27 PM

After watching that line about Chicago, you have to wonder why he waited so long. Better late than never, but will it be too little to late?

Posted by: Tom G | ballssticksstuff.com at October 6, 2008 9:31 PM

I don't think McCain wants to talk policy on this either...deregulation of banking and finance, etc., being one of his pet issues...the Democrats' policy, which was encouraged by everyone (and pushed with lots of $ by Davis's Homeownership Alliance), was to increase home ownership and ensuring the limits were fairly implemented. Fannie/Freddie were in the business of making more loans and they pushed to let that happen, no surprise.

And McCain has more than Rick Davis's stuff to worry about, he has Aquiles Suarez, Charlie Black, Phil Gramm, Arther B. Culvahouse (who was on the VP selection committee for McCain, since that seems to be important to you), Wayne Berman, John Green...I mean, the campaign is rife with Fannie/Freddie cash guys and people who never met a deregulation bill they didn't like...

And following McCain's deregulation plan with the Republican Congress and Bush's philosophy of the so-called free (or should I say $700B) market needing no oversight does not pretend to say that if the Republican Congress (recall they were in control in 2005 during all this) had followed McCain we would be better off. The bill didn't make it out of committee in large part because neither side wanted to move control and the bill was plain bad...American Enterprise Institute was even against the bill due to its flaws...

Posted by: AstrosFan at October 6, 2008 10:12 PM

Ho hum. big surprise.
Since conservative ideology is dead in practice, this is all McCain has left in the holster.
What else is he going to do, run on more deregulation of the financial markets?

Conservatism is dead. Let's burn the body so it can NEVER rear it's ugly head again.

When we're done with the Conservatives and GOP, we'll move on to burying the Democrats too (because they sat on their hands and let it happen).

Posted by: Berto at October 6, 2008 10:21 PM

Just curious, were you as happy as everyone in the crowd was at someone yelling out that Senator Obama is a terrorist? McCain sure was.

Surely, this language (and encouragement) won't cause problems down the road. I'm sure the person at the Palin rally yelling "Kill Him!" was just kidding around.

"Obama's status as the single largest recipient of Fan/Fred cash"
He wasn't. McCain was between the 2, as long as you count lobbyist+director donations. The numbers you have exclude them, as they have several jobs. And that's without going through 20 years of records.
Now, if you want to include attorney, software developer, secretary and business analyst, sure. But why separate out working people in the middle and bottom of the company?
That would mean applying logic and we can't have that.

"I don't buy that the CDS market is the problem. CDS, in and of themselves, are just a neutral tool for trading risk."
Ummm, no. They can be only that, but evolved far past that, both when used for hedging and outright speculation. It became gambling more than managing default risk.
Now we have the Fed looking into joining that, and the Commercial Paper market.
http://www.ft.com/cms/s/0/7a268486-93cd-11dd-9a63-0000779fd18c.html?nclick_check=1

To say that this isn't a problem when it's obviously a cause of part of the reason commercial paper is crashing? Nothing going beyond 81 days, AA and A2/P2 shutting down.

Fun days ahead.

Posted by: Dave at October 7, 2008 5:06 AM

Ack! Forgot to add MM to my comment about the commercial paper market shutting down. Meh.

Posted by: Dave at October 7, 2008 5:09 AM

Dave - Mixing lobbyist and company donations is apples and oranges, especially if you count every donation by every employee of every lobbying firm (including large law firms) retained by Fan/Fred. I work for a huge law firm, and a $100 donation by me to a candidate is not equal to a $100 donation by each of my firm's scores of clients. Especially in the case of Fannie, which was known for hiring every major lobbyist in town, in some cases not to do anything but not lobby against them.

I hate to break this to you, but "trading risk" and "hedging and outright speculation" are just two ways of saying the same thing: the CDS seller assumes the risk of a certain kind of default from the CDS buyer. If there's an issue with the CDS market, it's whether the state insurance regulators should have let a major insurance company load up with such a significant volume of CDS tied to a single asset class (mind you, I have no real problem with regulation of insurance companies' asset bases, given the nature of insurance companies and the explicit state guarantee that often stands behind them).

The commercial paper market has almost no inherent risks at all. When you see trouble in the commercial paper market, as we have had recently, it's only because you've had a cascade from riskier markets. It's not a reason to regulate that market because by the time the crap hits the fan in the commercial paper market, it's too late.

Posted by: Crank at October 7, 2008 9:57 AM

"Dave - Mixing lobbyist and company donations is apples and oranges, especially if you count every donation by every employee of every lobbying firm (including large law firms) retained by Fan/Fred"
No, but is a $76k donation the same? It's a fine line between 'employees of GSE' and 'people who receive direct cash payment from GSE'. And that's discounting lobbyists who pony up at $500/plate dinner, and bring their spouses, who don't put down their occupation.

"I hate to break this to you, but "trading risk" and "hedging and outright speculation" are just two ways of saying the same thing:"
I worked around credit default in 2000. I know what it is. Hedging a loss is different from agreeing to pay out $100m, and having someone agree to pay you $120m, both in the case of the same event. This is not managing risk, this is gambling. Reinsurance, bond insurance, spread options are managing risk. Which is what these were originally going to be.
Speculation isn't trading risk at all, it's seeking to make a profit with better knowledge than others.

The last person I know to stop being involved was in 2005. The stories he told made me quite aware these had changed.

"If there's an issue with the CDS market, it's whether the state insurance regulators should have let a major insurance company "
More fundamentally, it's if (or when now) we should have a federal exchange as well as some sort of reserve rate monitored by regulator - 10-20% of promised payout in near liquid, for example, and some sort of sunshine. Now NY is moving towards treating them as insurance, I believe. I can't remember any insurance statutory limits off the top of my head.

As far as state regulators, I'd hazard a guess that AIG got away with a subsidiary. You get to look at subcompany A, but not subcompany B. Who knows. *cough* lawyers *cough* Ooo! Lobbyists too!

I do notice that you left out the possibility of federal authorities recognizing risk, and recommending something in the past 8 years.
Don't worry, I don't think they could have recognized risk either.

"The commercial paper market has almost no inherent risks at all."
Apologies, I wasn't saying paper was risky, though it's not looking all that healthy, and I agree with you there. I was saying that the near universal free market choice (because of lack of regulation) of most CDSs to carry no reserve requirement against promised payouts has caused institutions to hoard and distrust more than they would necessarily have to in a more transparent system, in turn punishing a market that is remote from them and normally a breeze. Or really, causing the crap to hit the fan.

This is why I think CDS is at least part of the problem, even discounting the Q losses they are creating.

Posted by: Dave at October 7, 2008 10:47 PM

He still won't admit he is wrong, and that itself is very wrong. Not only will the Ivy-League illuminati not admit he's wrong, he wanted to cut off funding for the issues he was wrong about. Says alot about the liberal mantra.

Posted by: Ms. Know at October 25, 2008 1:17 AM
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