COMMENTS: Who Regulates the Regulators?

Next, the campaign spin on the money worries. NBC's financial Where They Stand was filed by John Yang Monday, so ABC's issues feature by David Wright and CBS' by Ben Tracy trod some of the same ground a day later. Tracy was in Las Vegas, a city with 22,000 homes facing foreclosure, to outline the two candidates' proposals in the aftermath of the bursting of the real estate bubble. Tracy found no difference between Barack Obama and John McCain in their support for the nationalization of FannieMae and FreddieMac and no difference in their support for a program to convert adjustable rate loans into 30-year fixed-rate mortgages. The distinction Tracy found lies in their proposals for what happens next--one wants a smaller federal role, the other a larger one. No prizes for working out which is which. McCain would downsize FannieMae and FreddieMac and then privatize them. Obama would set up a $10bn federal fund to prevent foreclosures, to offer mortgage relief under bankruptcy, and to subsidize low-income homeowners.

ABC had Wright use its What's the Difference? format to summarize the day's debate from the campaign trail. Financial regulations? Obama has a package of six specific reforms; McCain proposes a bipartisan commission to draft a package. Fiscal policy? Obama wants to raise taxes on wealth and reduce them for the majority of households; McCain wants to extend tax cuts for the wealthy and grant new tax cuts for corporations and increase exemptions for dependents. Real estate? Wright saw a clearer distinction than Tracy did. He reported that only McCain supports fixed-rate refinancing; Obama's policy was the federal fund and the low-income support.

Obama listed the highlights of his financial reform package in his sitdown with CBS anchor Katie Couric, for which she claimed an Exclusive. NBC brought us the news from the two campaigns in tandem: first Lee Cowan with Obama in Colorado and then Kelly O'Donnell (at the tail of the same videostream) with McCain in Ohio. As McCain was calling for a commission to propose new financial regulations, O'Donnell reminded us that the candidate declared to The Wall Street Journal in March: "I am always for less regulation." Cowan noted that Obama's package of reforms had already been prepared six months ago, before the current financial crisis. Obama "blamed the mortgage meltdown--just like the collapse of the Savings & Loan industry--on government regulators being asleep at the switch." Presumably that was a reference to McCain's membership of the Keating Five, the group of senators accused of improperly lobbying regulators on behalf of a bankrupt S&L.

If so, Cowan should have connected those dots, pointing out that McCain was but a minor player in that quintet.


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