Printer Friendly

September 30, 2008
The Financial Crisis
by Victor Davis Hanson
NRO The Corner

Fire with fire...

McCain's decision to return to his DC day-job, and criticisms of earmarks and excessive spending are noble — but nevertheless killing him as blah, blah distractions during the current meltdown as Obama hits the airwaves hard with boilerplate populism, lambasting Wall-Street greed (fair enough) and the administration laxity in allowing these pirates to rob freely (incumbents are always held accountable for economic malaise).

In "Give 'em Hell, Harry" style McCain must counter that by damning Wall Street greed, but also the corruption of in-the-tank House and Senate Democrats who kept regulators from shutting down Fannie Mae and Freddie Mac corruption. (watching clips of Raines, Frank and Walters from the 2004 hearings is almost surreal.)

Opposing the bailout may sound populist and make sense, but politically it is short-sighted since prolonged uncertain markets only hurt McCain; and once the outraged population sees how their 401(k)s tank, they will reconsider opposing governmental intervention. Given the large Democratic majority in the House, the proper guarantees and reforms won't happen, and salvaging what one can to restore financial trust is about the only sane alternative.

McCain must expose the sudden Obama middle class populism as disingenuous, inasmuch as he attended a church for 20 years whose popular ethos was smug ridicule for the values of "middle-classness." Community organizing, often with Acorn, to redistribute wealth is not middle class anything. Nor is Obama's notion of raising taxes in a meltdown.

Palin should mock the gotcha-media games of her interviewers, and get back to her populist cultural message and can-do attitude. What gave McCain-Palin the September surge was weariness with the vero possumus Obama elitism, and anger at the media tsking tsking of the empathetic moose-hunting mom. The Wall Street meltdown — coupled with Palin's freezing up before the glasses-on-the-nose-Gibson and sourpuss look of Katie Couric — derailed that.

So zen-like they have to turn populism to their own advantage. The two most unpopular groups in America right now are Wall-Street pirates who misled for their own bonuses, and those in Congress who cloaked Enron-like corruption at Freddie Mac and Fannie Mae in political-correctness. Franklin Raines and Jim Johnson are the Ken Lays of the 21st-century and the public should hear that — often.

Laugh or cry at Reid/Dodd?

Watching the politicians fight over the "plan" is like watching a lifetime smoker with cancer in his 11th hour questioning the value of his toxic chemotherapy.

Then there is the classical demagoguery — really, one of the most shameful spectacles in recent memory — of the Reid/Dodd press conference (September 26):

After tsk-tsking that presidential politics have not been helpful and should have no role in the loan guarantees, Sen. Reid warms up and immediately in front of the clicking cameras then stoops to, of course, blasting McCain.

Then he rails that neither candidate is a member of the Senate Banking Committee — though in July Obama I think claimed ("my committee") he was. All this is worthy of a Huey Long.

Then Sen. Dodd takes over, waves a paper as his eyes flash and he rails at the Wall Street greed that brought us this mess. He never offers a word that as the Chairman of the Senate Banking Committee, he took $165,000 in contributions from the failing Fannie Mae/Freddie Mac octopus as payback for his long-standing opposition to regulating these out-of-control institutions that triggered the entire mess, or that he took VIP insider discounted loans from the now long gone Countrywide Financial that did its part to get us to where we are. Pretty shameful. Who will police the police?

This was all predictable

That astounding tape of the past 2004 House hearings on Fannie Mae and Freddie Mac shows Reps. Walters, Meeks, Davis, Clay, and Frank (who really should recuse himself from the present discussions given his culpability for the original mess) essentially bully and all but call the honest worried bank regulators liars and quasi-racists after hearing their prescient warnings that these institutions were suspect, violating accounting laws in Enron-like fashion, verging on insolvency, and being used as cash cows for their dishonest administrators.

The shouting, accusations, grandstanding, praise of 100% financing, and kudos to Franklin Raines (whose creative accounting allowed himself and his cronies multimillion dollar bonuses) are surreal. And to watch these exchanges is chilling since it is a scary example of demagoguery in which statistics and audits, in postmodern fashion, are attacked as biased.

P.S. As I recall Raines was the one who, following the Enron scandals, gave public lectures about corporate responsibility and CEO honesty. And as one begins to read about Raines, James Johnson, Jamie Gorelick, and Leland Brendsel at Freddie Mac, one begins to understand their modus operandi. Freddie and Fannie were landing pads for former Democratic insiders, who milked the agencies for millions in bonuses as they covered their tracks by donations to Congressional candidates and pseudo-racial-populism of helping minorities buy homes with little down. Their careers are every bit as nauseating as anything at Enron — and yet the press strangely does not go after them in the manner we learned of Ken Lay's deceit. God help us all.