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Thursday, August 21, 2008

McCain’s Corruption Already Cost You Over 200 Billion Dollars, Taxpayer

posted by on August 21 at 17:00 PM

Here are the minimal facts you should know about McCain’s shady history with the financial services:

1. As early as 1985 the Federal Home Loan Lending Board (FHLLB) became concerned that shoddy lending practices at private Saving & Loans were putting the governmental insurance funds (like FDIC), and in turn the US taxpayers, at tremendous financial risk.

2. Edwin Gray, the head of the FHLLB, tried to curtail this reckless lending by putting in very modest restrictions.

3. The Lincoln Savings and Loan Association was under investigation in 1986 for being one of most reckless federally insured lenders, blatantly ignoring the new restrictions and hiding the loss of hundreds of millions of federally insured dollars.

4. Charles Keating, the head of the Lincoln Savings and Loan Association, began to use campaign donations to derail the investigation of his failing lending institution, and prevent its takeover by the government for insolvency and reckless use of federally insured funds.

5. The campaign contributions started to work. Five bought-and-paid-for Senators, including Senator McCain, met with Edwin Gray in 1987 to pressure him to leave the Lincoln Saving and Loan Association alone. During this meeting, when it became clear that some of the other Senators were willing to be explicit about the goal of the meeting (“To be blunt, you should charge them or get off their backs,”) rather than circumspect, McCain stormed off to maintain the patina of ethical conduct.

6. When Edwin Gray refused to play along, and proceeded with the investigation and process to seize the remaining assets Lincoln Savings and Loan Association, he was replaced by a new head of the FHLLB—M. Danny Wall. Wall immediately dropped this investigation, and many others.

7. Lincoln Savings and Loans stayed in business, and even grew the value of the assets under its control, until 1989 when it promptly imploded, requiring a FDIC bailout to its depositors. Before the FDIC bailout, thousands of people lost their entire life savings.

Under Wall’s lax oversight, many other similar Savings and Loans also went uninvestigated, unregulated and resultant also imploded. About sixteen hundred lending institutions failed, thanks to this lax regulatory environment.

8. The General Accounting Office (GAO) calculated this crisis cost the US taxpayer $124.6 billion from 1986 to 1996 in support to the FDIC, to keep it solvent during all these payouts to failing institutions. That’s over $200 billion in current-day dollars.

So, I don’t sweat Obama’s million dollar house, for which he might have received some assistance from Rezko.

McCain is far deeper in the pit of taxpayer-fuel orgies of private financial irresponsibility.

RSS icon Comments


"(“To be blunt, you should charge them or get off their backs,”) rather [more] circumspect, McCain stormed off to maintain the patina of ethical conduct.

And i thought liberals were big on habeas corpus.
I know, there real message was "get off their backs" and I bolded the wrong part just to be a smart ass, but that is the sort of things smart asses do!

Wasn't that roughly about the time Obama joined the Trinity United Church of Christ to maintain the patina of non-Muslimness?

Posted by I know you are, but what am I? | August 21, 2008 5:39 PM

According to Bob Bennett, who investigated the Keating Five scandal and was later Bill Clinton's counsel during the tawdry Lewinski affair, John McCain was only guilty of at the most poor judgement in that savings and loan scandal.

Posted by raindrop | August 21, 2008 6:01 PM

@1 since nobody was under arrest there was no corpus to habere (sorry for the ugly pleonastic *to* there) - it takes quite a bit of work to make white collar cases, so the pressure was entirely transparent, except of course to @1

Posted by kinaidos | August 21, 2008 6:04 PM

I think you have the story backwards.

SL&As were in general insulated not from government intervention -- but from the marketplace!

In a time where interest rates were surging, where the biggest business revolution since the Industrial Revolution was occuring -- the shift from Factories to Services and Computing, when demand for capital was great to fund the Microsofts, the Visicalcs, The Lotuses and the IT departments of tomorrow, SLAs thought they could do business like it was "It's a Wonderful Life".

In a sense McCain was pioneering a commercial bank approach while DemoLibs were footdragging (as usual). But then, I think Enron was actually an innovator and good thing -- which is why they hung it out to dry!

Posted by John Bailo | August 21, 2008 6:10 PM

Approximately 73 years ago, the best part of John McCain ran down the inside of his mother's thigh, pooled on the cold linoleum of the bathroom floor, and became a pale, yellow stain.

Posted by samdinista | August 21, 2008 6:20 PM

So why isn't this a campaign commercial yet?

Posted by F | August 21, 2008 6:24 PM

Since the nation is in the midst of John McCain's 'housing crisis', in which he tries to remember how many houses he owns, and we're all still trying to figure out why McCain thinks an income of $5,000,000/year is needed to be considered rich, it's worth revisiting McCain's opinion about the value of wages. In 2006 at an AFL-CIO convention, when asked about the effect of immigration in depressing wages, McCain declared that no Americans would be willing to do agricultural work for as little as $50/hour. At that rate, a worker would make as much in 6 months as the average annual household income in the US.

McCain responded by saying immigrants were taking jobs nobody else wanted. He offered anybody in the crowd $50 an hour to pick lettuce in Arizona.

Shouts of protest rose from the crowd, with some accepting McCain’s job offer.

“I’ll take it!” one man shouted.

McCain insisted none of them would do such menial labor for a complete season. “You can’t do it, my friends.”

Some in the crowd said they didn’t appreciate McCain questioning their work ethic.

A fake jobs program - the only kind Republicans favor. That's more than arrogant. McCain is totally out of touch with the realities of working Americans.

I'd love for voters to ask McCain at townhalls this summer and fall whether he still thinks nobody's willing to work for as little as $50/hour.

Posted by mrgrandefromage | August 21, 2008 6:33 PM

Nice article but long and very very wonky.

Take $200 billion, divide by adult population, that's 200 million roughly, so that 1000 per adult or $2000 for a family with two adults. So say it in ten words or less:

John McCain cost your family $2000 already -- imagine what he'll cost you if he's president" (ka-ching ka-ching noises, dollars signs scrolling by faster and faster as Mr. and Mrs. Bubba of Racoon Township Pa look on, distrautht).

Ten words or less. boil it down. Ok, 15 words, but you know what I mean.

Posted by PC | August 21, 2008 8:31 PM

John McCain is propping up the homeowner by holding on to so many depreciating assets.

Should he sell, it's be another 20% downturn in condos. Now you Belltown 1-bdrm types wouldn't like that...would you?

Posted by John Bailo | August 21, 2008 9:57 PM

Don't forget all the bailouts to cover the thefts by his son - which one his dad is in power, will ACCELERATE.

With McCain, it's Bush Tripled.

Triple the National Debt.

Triple the Trade Deficit.

And triple the Fraud.

Posted by Will in Seattle | August 21, 2008 11:01 PM

Preaching to the choir. Waste of time. Too complicated for Joe Bigbelly.

Posted by Vince | August 22, 2008 6:35 AM

this is a hack piece

take a party slary and get it over with

Posted by C | August 22, 2008 7:43 AM

this is a hack piece

take a party salary and get it over with

Posted by C | August 22, 2008 7:44 AM

Obama will fire this broadside AFTER the GOP convention/wake.

Posted by max solomon | August 22, 2008 9:22 AM

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