Posted by
Always To The Right on Wednesday, October 15, 2008 2:32:47 PM
Barack Obama has claimed that he foresaw the subprime mortgage collapse
and took steps to warn the Treasury — by writing a letter. That claim
has come in two presidential debates. Peter Wallison reminds Wall Street Journal readers of the obvious in pointing out that Obama serves as a Senator and had the power to draft legislation, not letters, to prevent the collapse. Instead, Obama voted present
I mentioned this in an earlier debate analysis. It demonstrates a
key difference between Obama and John McCain. When McCain saw the
potential for crisis, he took action by co-sponsoring Chuck Hagel’s
Fannie/Freddie reform bill that would have increased regulation on the
two GSEs. He spoke in the Senate for its passage.
What did Barack Obama do? He wrote a letter. He didn’t bother to
co-sponsor the bill that could have prevented this year’s financial
collapse, or to even allow it to come to a vote. Obama talked
(allegedly — we have yet to see this letter) while McCain took action.
Now Obama and the same Democrats who pushed Fannie and Freddie to
buy a trillion dollars in bad loans want to blame “deregulation” for
the crisis. It wasn’t deregulation, and as Wallison points out, the
industry didn’t get deregulated at all. Congress created this crisis
by pushing Fannie and Freddie into not just buying subprime paper but
into transforming it into securities that infected the entire financial
system.
Read all of Wallison’s column to see how intellectually dishonest
the “deregulation” argument truly is. That’s all Obama has left,
however, to distract people from his inaction and his support of
government distortion of the lending market to achieve artificial
social-policy goals. That’s what makes his alliance with former Fannie
Mae chief Jim Johnson such a revealing data point about Obama and the
Democrats in general.