William Black -- a deputy director of the Federal Savings and Loan Insurance Corporation during the "Keating Five" scandal that nearly ended McCain's political career -- says the Arizona Republican's chief errors at the time were underestimating the importance of regulation and relying too heavily on slanted advice from captains of industry.
"In the S&L crisis, he took his advice from the worst [kind of] criminal. Charles Keating is the person he went to for his policy advice," Black said. "Now, he certainly is getting advice from Phil Gramm, Carly Fiorina, Rick Davis -- the whole group of economic and top political advisers are lobbyist types. He just doesn't seem to get it, ever, that the advice is going to favor their clients. Even if they just stop being lobbyists, you can't just turn that off instantly. It's their mind state that develops. ... The biggest lesson is that, when you deregulate and de-supervise, you create an environment where control fraud emerges. You hyper-inflate bubbles; you get criminalization."
Though McCain's latest TV ads tout the senator's sporadic calls for more government regulation, Black notes with interest that McCain bragged recently that he was "<a href="http://www.huffingtonpost.com/2008/09/23/john-mccain-the-fundament_n_128496.html";>fundamentally a deregulator." Black, who is now an associate professor of law and economics at the University of Missouri-Kansas City, also said that the deregulation that McCain was until recently proud to have championed effectively took corporate cops off the beat. "Nobody calls the Houston police department and says 'I think there a problem at Enron,'" he remarked.
In 1991, McCain railed against raising the FDIC insurance limit from $40,000 to its current $100,000 level. "The perversity of Federal deposit insurance is exemplified by the taxpayer bailout of the savings and loan industry," McCain said, while omitting his own role in the scandal that actually precipitated the S&L crisis.
"I think it is generally acknowledged that the failure of the savings and loan industry, to a large degree, can be directly attributed to the unwarranted expansion of deposit insurance," McCain continued. "Basic coverage was increased from $40,000 to $100,000. No longer was deposit insurance for the small depositor. It became the safety blanket for large, sophisticated depositors and freewheeling bankers."
Now, as McCain <a href="http://blogs.abcnews.com/politicalradar/2008/09/obama-proposes.html";>echoes Barack Obama's call to raise the FDIC insurance level from $100,000 to $250,000, Black believes the idea that FDIC insurance rates ever caused the S&L crisis can finally be put to rest as being "complete bunk."
Yet, despite being a withering McCain critic, Black isn't completely sold on Obama, either. While he notes with some satisfaction that the Illinois Democrat "did at least try to do some stuff on the regulation of subprime [mortgages] a couple of years ago, he wasn't on key committees." Overall, on financial regulatory matters, Black says Obama is "really somewhat untested. I'm not sure exactly what he would do." But Black notes that the "experienced" candidate is the one most likely to be tagged with responsibility for the current mess. "McCain purports to be on the committee that dealt with everything. [Meanwhile], he did nothing on subprime mortgages for years."
It turns out Gary Tuchman's trip to Little Diomede sets him apart from Sarah Palin -- because she's never actually been there, nor has she set eyes on its neighbor in Russia.
Here's the video of Tuchman's report:
Tuchman says that only 150 people live on Little Diomede, and that the town of Diomede has no streets and no cars. The poverty rate is over 40%, there is no television, and the only practical way to reach it is by helicopter. Anchorage (near Palin's hometown) is 550 miles away.
No Alaskan governor has ever visited Little Diomede, though indicted U.S. Senator Ted Stevens has made the trip. The town's residents barely knew who Palin was, and one of them didn't know she was the VP nominee.
It's going to be fun watching McCain-land spin this one, and it's going to be even more fun watching Tina Fey parody it.
Judy Woodruff Comes To Ifill's Defense Colleagues of Gwen Ifill are coming to her defense after conservatives, including members of the McCain campaign, declared her a biased moderator for Thursday's vice presidential debate because of a book she is authoring on black politicians that includes Barack Obama's name in the headline.
"Of virtually all the reporters I know, Gwen is somebody I have no idea where she stands politically. I mean, I have no idea where she is," said Judy Woodruff, who has moderated a vice presidential debate herself and works alongside Ifill at PBS. Writing this book does not present a problem "at all," she added. "I haven't seen it because Gwen has been working on it. But Gwen Ifill is a reporter. She is not someone who delivers opinion and I know that that is not the type of book she is involved in."
A virtual political firestorm erupted on Wednesday morning after it was reported that Ifill was working on a book about "emerging young African American politicians," which Republicans - including aides to John McCain - proclaimed compromised her objectivity for the vice presidential debate.
McCain himself downplayed the revelation, perhaps rightfully so. His campaign approved of her selection and ostensibly knew about the book before hand (it had been in the news weeks prior).
"I think that Gwen Ifill is a professional and I think she will do a totally objective job," <a href="http://thinkprogress.org/2008/10/01/mccain-ifill/ ">said McCain, "because she is a highly respected professional. Does this help that if she has written a book that's favorable to Sen. Obama? Probably not. But I have confidence that Gwen Ifill will do a professional job."
Woodruff, likewise, touted Ifill's history of professionalism and objectivity, saying she'd brush off the criticism from conservatives.
"Of all the people I know who are unflappable she is not going to be influence in any way by this," said Woodruff. "The fact is in journalism today one has to have a thick skin anyway. And Gwen has a thick skin. And like all of us who work in this business you get accustomed to people telling you what they think, and they have that right, this is a free country and people can way in anyway they want to."
