Editore"s Note
Tilting at Windmills

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September 20, 2008

STILL MORE HOUSING POLICY CONFUSION.... About two weeks ago, at a campaign event in Colorado, Sarah Palin claimed that Fannie Mae and Freddie Mac had become "too expensive to the taxpayers." The criticism didn't make any sense -- the lending companies have operated as private companies without taxpayer funds. In the midst of a housing crisis, it's the kind of detail a candidate for national office ought to know, especially before talking about the issue.

McCain broached the subject in a similar way yesterday.

McCain has aired and prepared, respectively, two ads that link Obama to former Freddie Mac and Fannie Mae chief executives Jim Johnson and Franklin D. Raines. McCain told a large, loud audience in Blaine, Minn., that Johnson had walked away from the mortgage giants with $21 million "of your money" in severance pay, while Raines received $25 million.

"Let's tell them to give it back," McCain said, and the crowd obliged, chanting "Give it back. Give it back."

First, if we're going to start talking about executives with excessive golden parachutes, perhaps McCain might consider addressing Carly Fiorina's $42 million going-away package.

Second, and more to the point, Freddie Mac and Fannie Mae execs were not given taxpayer-financed severance packages. Again, we're talking about private companies, not taxpayer-financed agencies. As the Washington Post reported today, "[T]he severance packages were paid by company shareholders, not taxpayers."

So, here's the question. Is John McCain still confused, even now, about how Freddie Mac and Fannie Mae operated, or was he just trying to energize voters with talking points he knew to be false?

Oddly enough, given the last several months, it's genuinely hard to tell when McCain is being dishonest and when he's being incompetent.

Steve Benen 10:48 AM Permalink | Trackbacks | Comments (17)

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But it's also hard to argue that we shouldn't demand the heads of companies that are hired to promote stock prices or create false company profits through what is essentially fraud. I just think it is ironic that McCain would make the argument after being one of their biggest enablers.

Posted by: Danp on September 20, 2008 at 10:58 AM | PERMALINK

Can you imagine what Sarah Palin's thinking these days...?

1) How did I get into this mess?

2) Why didn't someone warn me how incompetent John McCain and his team are?

3) I'm a rising star -- but look at how [the press, the Republicans, McCain, his staff, the Democrats] are treating me!

4) Why won't X return my phone calls? We were best friends three days ago!

5) I have to debate Joe Biden on national television! If I can't get him to say something sexist, I'm so screwed!

Posted by: The Phantom on September 20, 2008 at 11:00 AM | PERMALINK

$200 billion in expenses the Fannies will cost the tax payer.

Add to that the $100 billion we have already shelled out for the Bear-Sterns, and the future $500 billion we will pay for the AIG guarantees.

Wadya get?

A trillion.

Posted by: Matt on September 20, 2008 at 11:01 AM | PERMALINK

" it's genuinely hard to tell when McCain is being dishonest and when he's being incompetent."

Really doesn't matter a bit of the electorate is unwilling or unable to figure it out.

Dunno how the nation will survive 4 more years of repubism.

Posted by: Buford on September 20, 2008 at 11:08 AM | PERMALINK

Can you imagine what Sarah Palin's thinking these days...?
She's thinking it's all wonderful. If McCain loses this time she's on a path for 2012.

Posted by: msw on September 20, 2008 at 11:11 AM | PERMALINK

Dishonest or incompetent?
Bush? Cheney? McCain? Palin?
Eeny Meeny Miny Moe.

This sounds so familiar.

Posted by: rjh on September 20, 2008 at 11:24 AM | PERMALINK

st. john lies if he knows the truth and is incompetent to know the truth, so it's a catch-22 type thing. It is so discouraging to me that the more bad things that happen due to repug "leadership" or external events, the better mccain's numbers get. Apparently, according to an AP/Yahoo poll, there are dems that will vote against Obama because he won't be able to bring all of the change that he is promising. So this group is saying that it is better to continue to destroy the country completely than to try to save it. This whole Presidential election leaves me breathless at the rampant stupidity.

Posted by: Michael on September 20, 2008 at 11:24 AM | PERMALINK

Obama's far better than McCain, but this attack on McCain is inappropriate. Fannie and Freddie have privatized the profit and socialized the loss, and the $46m these guys got paid for their incompetence is part of the sum that taxpayers will ultimately be on the hook for.

Yes the money didn't originally come from taxpayers, but it's coming from us now.

There are so many legit reasons to fault McCain that this one isn't necessary.

Posted by: Brian Schmidt on September 20, 2008 at 11:50 AM | PERMALINK

"[I]t's genuinely hard to tell when McCain is being dishonest and when he's being incompetent."

Who says he can't be BOTH?

Posted by: cash on September 20, 2008 at 11:55 AM | PERMALINK

I'm not one to stand up for McCain, but in his defense here, it is true that Fannie and Freddie have always been sustained by the unofficial, but nevertheless real assumption on the part of most market players that they were quasi-Federal and that the government would, in fact, bail them out if they ever got into deep do-do. Hence, their "success" in the days of these two guys was due in large part to their being backed implicitly by the taxpayers. Hence, it's hard to say that taxpayer money didn't have something to do with the golden parachutes.

Still, given the number of Fannie/Freddie related lobbyists working on the McCain campaign, the charges leveled against Obama are absurd, particularly when one of the two people complained about had nothing to do with the Obama campaign.

Posted by: walldon on September 20, 2008 at 11:55 AM | PERMALINK

"Oddly enough, given the last several months, it's genuinely hard to tell when McCain is being dishonest and when he's being incompetent." - SB

Dang. I thought I had seen a sliver of light peeking between Shruby and McBush but nope, you just took care of that. They are one and the same. Never mind.

0 = Dishonest
1 = Incompetent

It's a simple system. Those two things can be combined to answer any question concerning Shruby, McBush or "conservatism" in general.

Posted by: burro on September 20, 2008 at 12:50 PM | PERMALINK

Your "it's genuinely hard to tell when McCain is being dishonest and when he's being incompetent."
is easily the best line of the day.

Posted by: Prup (aka Jim Benton) on September 20, 2008 at 1:41 PM | PERMALINK

I'm with cash. My thought exactly.

"Is John McCain still confused, even now, about how Freddie Mac and Fannie Mae operated, or was he just trying to energize voters with talking points he knew to be false?"

He doesn't know and he doesn't care.

Posted by: And a pit bull would make a better Vice President, too. That's TWO things. on September 20, 2008 at 1:50 PM | PERMALINK

"it's genuinely hard to tell when McCain is being dishonest and when he's being incompetent."

Oh, Jeez, after two terms of Bush, do we really want to play another round of "Evil or Stupid?"?

P.S.: The answer is often "both."

Posted by: gradysu on September 20, 2008 at 3:33 PM | PERMALINK

Re: .... given the last several months, it's genuinely hard to tell when McCain is being dishonest and when he's being incompetent.

Or when he's just reading the script handed to him by incompetents because he's somebody's puppet?

Posted by: SF on September 20, 2008 at 5:43 PM | PERMALINK

Thirdly, didn't I read somewhere today that they weren't getting the big severance packages? Seems like they got "only" retirement packages worth, respectively, $4 million and $5 million.

Posted by: Terry on September 20, 2008 at 10:16 PM | PERMALINK

"it's genuinely hard to tell when McCain is being dishonest and when he's being incompetent."
—Steve Benen 10:48 AM

As has been pointed out above, this really is no different from what we've had to deal with lo these past 8 years, with the entire administration, with most of Congress, and with almost all of the punditocracy.
Evil or stupid (and you left out crazy)?
It's a classic "False Choice," as we point out in our logic classes, because the right answer is, of course, "all of the above."

However, the real question is, why is anyone worrying about the players from Freddie and Fannie, when the Big Fish Hisself is still very much in evidence on the McCain bus? If there's one single individual who should be the face of the financial catastrophe -- which at this point looks well to leaving every single one of us* the poorer for at least the next decade or two, if not the rest of our lives -- it's Phil Gramm. Though there were, of course, many hands wielding weapons, his were the ones most blatantly attached to the smoking gun of the disregulation of mortgage-backed securities, which (along with the repeal of Glass-Steagall -- which was also brought to us by Gramm, in 1999) is pretty much the enabling act for the entire CDO debacle, the creation of what everyone [now] recognizes to be "toxic" securities.
(The parallels with Iraq are very strong. Everyone with a 3-digit IQ, who wasn't an owned-and-operated spokesperson for the entities involved, knew at the outset that a catastrophe was in the making, and said so at the time. But of course, the people who were most completely wrong at the time are still the ones with their hands on the wheel, and their faces and voices on the teevee and on the op-ed pages, while the ones who were right all along are still unheard from in the media, and in the halls of power. Funny how that works.)

*By "us," I mean everyone who hasn't had an 8- or 9-figure bonus from Wall Street. This also means pretty much everyone else in the whole world, as the suckout of otherwise productive capital will lower gdp measurably for most affected countries.

Posted by: smartalek on September 21, 2008 at 4:15 AM | PERMALINK




 

 

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