National Commentary

Nicholas F. Benton: Why McCain Has Nothing to Say




The McCain campaign descended in the last week from nastiness toward an almost cartoon-like caricature of reality, in the face of massive social and economic dissembling caused by its political and Wall Street friends simply too big for it to handle.

Yesterday, the latest glimpse into the real horror show of Wall Street occurred in a Congressional hearing, finding credit ratings agencies as culpable as the greed-obsessed investment bankers and their Republican cronies for bringing the global economy to its knees, and the nation to the brink of another great depression.

With no transparency or accountability, these insatiable ghouls of Lower Manhattan fed on the very flesh and bones of the U.S.’s working economy in an orgy of leveraging that reached levels that, well, that’s the problem. No one really knows.

Securities and Exchange Commission Chief Christopher Cox alluded to $55 trillion in credit default swaps recently, at least a tip off that the problem is far greater than any $700 billion bank bailout can begin to fix.

There remains no transparency regarding how the nine banks that were partially nationalized by the U.S. Treasury last week are using those hundreds of billions of taxpayer dollars. Are they using the money to ease credit and get capital-starved American businesses going again, or are they using it to cover their insolvent leveraged obligations, instead. Who knows?

One thing is for sure, Sen. McCain has nothing to say. He’s degenerated into a Deputy Dawg-style cartoon character, ignoring the crisis altogether and instead spending his time accusing Sen. Obama of being a “socialist!”

First of all, the term, “socialist” is hardly lethal. It’s an old person’s bugaboo, at best. Most under 45 have no opinion of its merits or otherwise, since it’s had nothing to do with their lives.

But for McCain to try to characterize Obama’s tax policy as “socialist” because it proposes a different tax treatment for the rich than for the poor is truly laughable, were it not so pathetic. Of course, as everyone knows, our existing tax system is based on just that same distinction.

McCain is really complaining that Obama will not coddle the GOP’s rich cronies the way that Bush has for eight years, and he intends to.

McCain’s deafening silence on the true magnitude and consequences of the current meltdown, in favor of nasty and lame attacks on his opponent, is defining with ever greater clarity to the American public his mean-spirited irrelevance, at best, and that of his and his party’s Johnny-one-note mantra on taxes. No wonder he and his GOP colleagues continue to sink in the polls.

To deflect culpability from themselves, some Republicans are trying to pin the current mess on Democrats, but it can’t stick. This all was set up on the watch of the current White House and a Republican-controlled Congress, mostly from 2000 to 2006, working with the radical free-market Fed Chief Allen Greenspan and the investment banking czars of Wall Street, including the present Treasury Secretary Henry Paulson, who was chief of Goldman Sachs most of that time.

In fact, Paulson, appointed by the Bush administration to his current post, was himself a big part of the very mess he’s now supposedly working to clean up.

Dylan Ratigan of CNBC-TV pulled up the testimony of Paulson from a Feb. 29, 2000 Congressional hearing, when the then-Goldman chief urged Congress to enact legislation permitting greater speculative leveraging to occur, including in opaque credit default markets and off-balance-sheet transactions. Leverage limits were eventually raised from 12-to-1 to as high as 40-to-1 in response to his and others’ wishes.

Then, on the subprime mortgage side of the problem, Mark Zandi of Moody’s Economy.com, in his new book, Financial Shock: A 360 Degree Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis, writes that it was the Bush administration, and its “ownership society” obsession, and not Democrats, that “put substantial pressure on Fannie Mae and Freddie Mac to increase their funding of mortgage loans to lower-income groups.”

He documents Democrats’ worries about increased evidence of predatory lending at the same time, and how Bush and most Republicans in Congress opposed legislative efforts to curtail it.

With McCain having been in bed with all this Republican chicanery, himself, is it any wonder that he simply has nothing to say now?

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