Tags: fannie | freddie | obama

Fannie, Freddie Subsidized Obama Campaign

Wednesday, 01 Oct 2008 08:32 AM

By Scott Wheeler

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Most political analysts agree that McCain lost the economic portion of last Friday’s debate.

That is because Republicans are rarely effective in getting their side of the story out. Democrats, with lots of help from their liberal friends in the mainstream media, have always been able to drive the debate over government corruption scandals and park it on the Republican side of the aisle regardless of the facts.

When it's a bipartisan scandal, Republicans get 90 percent of the blame, and when it's a Democratic scandal it ends with an argument framed that both sides are guilty.

Take, for example, People's Republic of China and the Democratic National Committee fundraising scandal of the 1990s: President Clinton and the Democrats were caught taking millions of dollars in campaign donations from communist China at the same time the Clinton administration was helping China get access to key technology that in turn has helped them fast-forward several generations on their weapons of mass destruction systems that now threaten China's neighbors and the United States.

The Democrats and the media repeated the irrelevant argument that the problem was in the way political campaigns were financed. We were told over and over that the problem with the campaign finance law is not what's illegal. It's what's legal.

That argument led to campaign finance reform laws known as McCain/Feingold. What the Democrats did in the 1990s had nothing to do with the need for reform because taking laundered donations from foreign countries was illegal then, just as it is illegal under the new campaign finance standards. But by changing the debate from what Clinton did to what is wrong with the way campaigns are financed, the public’s attention was redirected — and so too their outrage — from what could have been a criminal investigation of the Clinton administration for bribery (or worse) to one of bipartisan campaign finance reform.

It is this template that we are now seeing with regard to the bailout of the banking industry brought on by the failures of Fannie Mae and Freddie Mac.

Journalists and Democrats are engaged in a full attack on the concept of a free-market economy. Of course they say it's the capitalists who are to blame for attempting to make a profit in the home mortgage industry and that is how Democrats are framing this scandal and anchoring it to the pro-free market Republicans. But what the failure of Fannie Mae and Freddie Mac really represent is a failure of fascism.

Those failures are a clear example of the federal government having one hand in the legislation and regulation of the lending industry and the other hand in the cookie jar.

During the previous six years, the Bush administration, as well as Sen. McCain and others, warned of a potential financial crisis if Fannie Mae and Freddie Mac weren't reigned in from their very liberal lending policies. But those warnings were met with visceral attacks from leading Democrats such as Barney Frank, who suggested that managing Fannie and Freddie responsibly amounted to being against poor people.

It’s no wonder they defended government involvement in the private mortgage business so vociferously: Fannie and Freddie were heavily subsidizing the re-election campaigns of Rep. Frank and Sens Christopher Dodd and Barack Obama and others. But even worse, since the scandal broke it has been revealed that former Clinton administration officials such as Franklin Raines and Jamie Gorelick were paid tens of millions of dollars for holding executive positions at Fannie and Freddie.

So in addition to providing a campaign war chest for House and Senate Democrats, it also was used as a personal piggy bank for former Clinton administration officials needing a soft landing.

This is business as usual in fascist totalitarian governments around the world. Cronies of the government's leadership get rich off the nation’s treasury while its citizens share what is left. And in those corrupt nations, just as it was in the case of Fannie and Freddie, it’s all done in the name of helping the poor.

McCain's failure to push back against Obama in last Friday night’s debate is where he lost major points.

Obama's opening statement included this vicious and erroneous attack: "Now, we also have to recognize that this is a final verdict on eight years of failed economic policies promoted by George Bush, supported by Senator McCain, a theory that basically says that we can shred regulations and consumer protections and give more and more to the most, and somehow prosperity will trickle down.

"It hasn't worked. And I think that the fundamentals of the economy have to be measured by whether or not the middle class is getting a fair shake. That's why I'm running for president, and that's what I hope we're going to be talking about tonight."

If McCain had responded with a direct confrontation of Obama such as, "Senator, the American people know that I have forcefully criticized President Bush when I felt it was necessary, but this is not Bush's fault. The public record is replete with their warnings and mine, for Congress to take action. Neither is it a failure of the free market economics.

"This was a failure brought on by a government-backed institution that was abused by members of your party for personal gain to the tune of hundreds of millions of dollars. And Senator, instead of heeding the president’s and my warning you chose not to stand up for what was right. Instead you chose to take hundreds of thousands of dollars from Fannie Mae and Freddie Mac for your own campaign and looked the other way on corruption."

If McCain had gone on offense over the economy, the public perception of who won the debate may have been much different.

Scott Wheeler is the executive director of the National Republican Trust PAC.

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