On MSNBC this week, Newsweek's Jonathan Alter tried to connect
John McCain to the current financial disaster, saying: "If you
remember the Keating Five scandal that (McCain) was a part of.
... He's really getting a free ride on the fact that he was in
the middle of the last great financial scandal in our
country."
McCain was "in the middle of" the Keating Five case in the
sense that he was "exonerated." The lawyer for the Senate Ethics
Committee wanted McCain removed from the investigation
altogether, but, as The New York Times reported: "Sen. McCain was
the only Republican embroiled in the affair, and Democrats on the
panel would not release him."
So John McCain has been held hostage by both the Viet Cong and
the Democrats.
Alter couldn't be expected to know that: As usual, he was
lifting material directly from Kausfiles. What is unusual was
that he was stealing a random thought sent in by Kausfiles'
mother, who, the day before, had e-mailed: "It's time to bring up
the Keating Five. Let McCain explain that scandal away."
The Senate Ethics Committee lawyer who investigated McCain
already had explained that scandal away -- repeatedly. It was
celebrated lawyer Robert Bennett, most famous for defending a
certain horny hick president a few years ago.
In February this year, on Fox News' "Hannity and Colmes,"
Bennett said, for the eight billionth time:
"First, I should tell your listeners I'm a registered
Democrat, so I'm not on (McCain's) side of a lot of issues. But I
investigated John McCain for a year and a half, at least, when I
was special counsel to the Senate Ethics Committee in the Keating
Five. ... And if there is one thing I am absolutely confident of,
it is John McCain is an honest man. I recommended to the Senate
Ethics Committee that he be cut out of the case, that there was
no evidence against him."
It's bad enough for Alter to be constantly ripping off
Kausfiles. Now he's so devoid of his own ideas, he's ripping off
the idle musings of Kausfiles' mother.
Even if McCain had been implicated in the Keating Five scandal
-- and he wasn't -- that would still have absolutely nothing to
do with the subprime mortgage crisis currently roiling the
financial markets. This crisis was caused by political
correctness being forced on the mortgage lending industry in the
Clinton era.
Before the Democrats' affirmative action lending policies
became an embarrassment, the Los Angeles Times reported that,
starting in 1992, a majority-Democratic Congress "mandated that
Fannie and Freddie increase their purchases of mortgages for
low-income and medium-income borrowers. Operating under that
requirement, Fannie Mae, in particular, has been aggressive and
creative in stimulating minority gains."
Under Clinton, the entire federal government put massive
pressure on banks to grant more mortgages to the poor and
minorities. Clinton's secretary of Housing and Urban Development,
Andrew Cuomo, investigated Fannie Mae for racial discrimination
and proposed that 50 percent of Fannie Mae's and Freddie Mac's
portfolio be made up of loans to low- to moderate-income
borrowers by the year 2001.
Instead of looking at "outdated criteria," such as the
mortgage applicant's credit history and ability to make a down
payment, banks were encouraged to consider nontraditional
measures of credit-worthiness, such as having a good jump shot or
having a missing child named "Caylee."
Threatening lawsuits, Clinton's Federal Reserve demanded that
banks treat welfare payments and unemployment benefits as valid
income sources to qualify for a mortgage. That isn't a joke --
it's a fact.
When Democrats controlled both the executive and legislative
branches, political correctness was given a veto over sound
business practices.
In 1999, liberals were bragging about extending affirmative
action to the financial sector. Los Angeles Times reporter Ron
Brownstein hailed the Clinton administration's affirmative action
lending policies as one of the "hidden success stories" of the
Clinton administration, saying that "black and Latino
homeownership has surged to the highest level ever recorded."
Meanwhile, economists were screaming from the rooftops that
the Democrats were forcing mortgage lenders to issue loans that
would fail the moment the housing market slowed and deadbeat
borrowers couldn't get out of their loans by selling their
houses.
A decade later, the housing bubble burst and, as predicted,
food-stamp-backed mortgages collapsed. Democrats set an
affirmative action time-bomb and now it's gone off.
In Bush's first year in office, the White House chief
economist, N. Gregory Mankiw, warned that the government's
"implicit subsidy" of Fannie Mae and Freddie Mac, combined with
loans to unqualified borrowers, was creating a huge risk for the
entire financial system.
Rep. Barney Frank denounced Mankiw, saying he had no "concern
about housing." How dare you oppose suicidal loans to people who
can't repay them! The New York Times reported that Fannie Mae and
Freddie Mac were "under heavy assault by the Republicans," but
these entities still had "important political allies" in the
Democrats.
Now, at a cost of hundreds of billions of dollars,
middle-class taxpayers are going to be forced to bail out the
Democrats' two most important constituent groups: rich Wall
Street bankers and welfare recipients.
Political correctness had already ruined education, sports,
science and entertainment. But it took a Democratic president
with a Democratic congress for political correctness to wreck the
financial industry.