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Keating Economics

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In case you hadn’t already watched this elsewhere

The current economic crisis demands that we understand John McCain’s attitudes about economic oversight and corporate influence in federal regulation. Nothing illustrates the danger of his approach more clearly than his central role in the savings and loan scandal of the late ’80s and early ’90s.

John McCain was accused of improperly aiding his political patron, Charles Keating, chairman of the Lincoln Savings and Loan Association. The bipartisan Senate Ethics Committee launched investigations and formally reprimanded Senator McCain for his role in the scandal — the first such Senator to receive a major party nomination for president.

At the heart of the scandal was Keating’s Lincoln Savings and Loan Association, which took advantage of deregulation in the 1980s to make risky investments with its depositors’ money. McCain intervened on behalf of Charles Keating with federal regulators tasked with preventing banking fraud, and championed legislation to delay regulation of the savings and loan industry — actions that allowed Keating to continue his fraud at an incredible cost to taxpayers.

When the savings and loan industry collapsed, Keating’s failed company put taxpayers on the hook for $3.4 billion and more than 20,000 Americans lost their savings. John McCain was reprimanded by the bipartisan Senate Ethics Committee, but the ultimate cost of the crisis to American taxpayers reached more than $120 billion.

The Keating scandal is eerily similar to today’s credit crisis, where a lack of regulation and cozy relationships between the financial industry and Congress has allowed banks to make risky loans and profit by bending the rules. And in both cases, John McCain’s judgment and values have placed him on the wrong side of history.

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Written by Seth Anderson

October 6th, 2008 at 2:40 pm

Posted in politics

Tagged with , , ,

3 Responses to 'Keating Economics'

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  1. […] Personally, the McCain smear is so weak to be laughable. I mean come on, Obama was 8 when Ayers was on the lam. Not every politician is Billy Pilgrim, able to look into the past of everyone they meet like the past was a Chinese New Year parade float. Now, McCain’s guilt by association trick actually works quite well on connections between McCain and Keating – actually as some wag put it, the McCain Keating connection is more of a “guilt by guilt” association. […]

  2. […] Obama mention Phil Gramm in the debate tonight? Keating is one thing, but Gramm is still closer, albeit just as […]

  3. […] Speaking of McCain’s past, check out this recent post from billmon: […]

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